Challenges Faced by eCommerce Merchants in 2022

The e-commerce market has steadily grown year-on-year. However, in a crowded marketplace, what can merchants do to stand out from the crowd?

With internet penetration and globalization on the rise, there's no better time than now to become an eCommerce merchant. Analysts predict that the e-commerce market will be worth $1.023 trillion by the time 2023 comes by. For context, that's the equivalent of Indonesia's GDP.

However, tapping into the eCommerce market is not easy. Businesses must adapt to changing demands and cater to the needs of an ever-expanding, diverse customer base. Besides that, the eCommerce industry is highly competitive with low barriers to entry.

This is why converting visitors into paying customers is one of the biggest challenges eCommerce merchants face, i.e., customer friction. It refers to events that cause customers to change their minds before the transaction is completed.

But, before we deal with the problem, we first need to know:

What Are The Symptoms Of Customer Friction?

1. High cart abandonment

High cart abandonment rates indicate that many customers are adding items to their cart but not completing the transaction. It indicates a stumbling block during the final stage of your sales funnel.

Some of the most common reasons for cart abandonment include:

• Cheaper alternatives
• Customers were only shopping around
• High additional costs i.e., shipping, taxes, etc
• Need to create a new account
• Limited payment options
• Security concerns
• Poor checkout experience

Studies have found that the average cart abandonment rate across all industries stands at 69.6%, and this number goes up to 85.7% when it comes to mobile users.

Fortunately, there are several ways for merchants to reduce cart abandonment, which translates into higher revenues, better sales margins, and improved conversion rates.

2. High traffic, low sales

If your site attracts many visitors, but sales numbers still remain constant or are falling, you're probably attracting low-quality or irrelevant traffic. This is known as a high bounceback rate. It also indicates that you're failing to convert visitors into paying customers.

Frequently, high bounceback rates can be attributed to the following:

• Poor UX/UI
• Unoptimized website design
• Limited support for payment methods
• Difficult checkout process
• Low-quality copywriting
• Long conversion funnel

Merchants also need to understand where their traffic is coming from. Use tools like Shopify, WooCommerce, or Google Analytics to track visitors and optimize your online store accordingly.

3. Poor customer feedback

One of the clearest signs of customer friction is poor feedback or reviews. Unhappy customers will make their displeasure known, which results in a loss of sales and reputation. While it's difficult to accept criticism, merchants have to take it in their stride and work to overcome these challenges.

In some situations, poor feedback can be caused by factors outside the merchant's control. Consider taking the initiative and engaging with the dissatisfied customer to rectify the situation when that happens. Doing so opens up the possibility of changing a negative experience into a positive one.

Addressing Customer Friction

Removing customer friction allows eCommerce merchants to attract new customers, raise conversion rates, and improve revenues. Although some factors cannot be controlled, most of the time, merchants can take steps to address customer friction.

Let's start with a simple one:

1. Improving store UI/UX

A well-optimized online store keeps customers moving along the sales funnel. This reduces customer friction and makes transactions feel natural and intuitive. There's no need to struggle with awkward interfaces, and all required information is clearly displayed.

In short, a well-designed online store prevents visitors from being overwhelmed and ensures that they have an enjoyable experience. And now, with the rise of mCommerce or mobile commerce, it is more important than ever to implement sound UI/UX designs.

2. Offering more payment options

In a crowded industry, convenience reigns supreme when it comes to converting customers As we've seen from the points above, the lack of support for popular payment options is one of the top reasons customers choose to take their business elsewhere.

Opening up new payment channels makes it easier for customers to complete their transactions. It also boosts their confidence and gives them a reason to shop at your online store.

And thanks to the adoption of e-wallets worldwide, merchants can now gain access to previously underserved communities. Unlike credit/debit cards, e-wallets do not require users to have a bank account. Thus, allowing unbanked consumers to use alternative payment methods to shop online.

The convenience offered by APMs has also proven popular with customers who appreciate the convenience and security e-wallets offer, which is why it would be folly for a merchant to ignore these payment methods.

3. Addressing security concerns

Personal information has become the new commodity in today's highly connected world. Because of this, customers are understandably worried about handing over their financial information.

Hence, merchants need to ensure that their payment platform is able to keep customer information safe and secure at all times. Doing so builds up customer confidence and reduces friction significantly by putting their fears to rest.

Also, keep in mind that any data breaches could seriously damage your business's reputation and lead to a loss in sales.

4. Make all costs transparent

Customers cite additional costs as one of the main reasons they choose to abandon their purchases at the last minute. This is why merchants should ideally display all related costs upfront. Being upfront and honest with customers eliminates any misunderstandings and gives customers a clear picture of what they can expect.

XanPay's Solution

Tapping into the global e-commerce sector is challenging. We at XanPay aim to help businesses get an edge over their competitors. Reduce customer friction with XanPay's selection of features such as:

• Integration with plugins like WooCommerce, Magento, OpenCart, and Wordpress
• Support for popular alternative payment methods in more than 10 countries
• Competitive FX rates
• Zero fixed fees — pay as you go
• Low fees for domestic transactions
• No chargebacks

For more information on XanPay and our range of payment solutions, check out our website.