Ecommerce Merchant Challenges: Statistics That Show What Issues Ecommerce Sellers Face

Current State Of Global Ecommerce

• Online retail sales amounted to 4.9 Trillion U.S dollars worldwide. And it’s forecast to grow over 50% within the next four years (Statistia, 2022)

Ecommerce is a vast industry and has grown immensely all over the world in past decade. People feel more comfortable shopping online from the comfort of their homes and getting their orders delivered to their doorstep. More people are starting their own ecommerce stores because it is easy to set up and fulfillment companies and dropshipping has made it even more accessible for ecommerce sellers to start selling online. This industry is set to grow even more in the coming years.

• 58.4% of internet users buy something online every week. The current categories with more spending are consumer electronics ($988.4 billion) and fashion ($904.5 billion) (Data Reportal, 2022)

More than half of internet users over the world spend money purchasing something online at least once every week. More people are inclined to make purchases from online electronics stores or spend money on buying fashion and clothing items from ecommerce sellers. Ecommerce merchants that have set up their stores in these sectors have to take all the right steps to ensure that they can stand out from their competition and retain their customers, as there is a high demand for online electronics and fashion. 

• According to companies, retail sales revenue from physical stores are almost equal to their digital sales and As a result, brands are investing in omnichannel tools that will help them sell anywhere (Shopify, 2022)

Most companies that have physical and online stores have noticed the growing demand for their products online as more people are becoming comfortable purchasing online. The pandemic is also one reason why people have started preferring shopping from ecommerce sellers instead of going to the physical stores, giving a rise to online sales. Brands that have physical stores as well as online stores have noticed that their physical sales are almost equal to their online sales, once again proving that ecommerce is growing at a rapid pace. 

• China generates $351.65 billion in revenue from retail ecommerce sales in social (transactions made directly on a social media platform), ten times more than the United States (eMarketer, 2021)

 China is one of the leaders when it comes to online retail and ecommerce marketplaces. Ecommerce merchants in China use social media platforms to their advantage and generate ten times more sales from social media platforms than the ecommerce merchants in the U.S. It is no secret that China has become an ecommerce giant over the years, and people from all over the world are getting more comfortable ordering products directly from China, even if the shipping takes longer than their local online stores. 

• It’s estimated that 2.14 billion people worldwide purchased services or goods online in 2021, which is around a quarter of the world’s population (Thrive My Way, 2022) 

There is no denying that ecommerce and online shopping has taken the world by storm. When the pandemic hit, people were forced to stay inside their homes and deal with strict lockdowns all over the world. During this time, the ecommerce sector saw a massive boost as physical stores were shutdown and everyone was making purchases online. This made the public realize that online shopping is convenient, resulting in a growth in online sales even in 2021. 

• In 2020, US consumers spent more than $861 billion online, which was a 44% spike from 2019, and almost three times the 15.1% increase the previous year (Thrive My Way, 2022) 

2020 was the year when people were dealing with strict lockdowns and physical stores were shutdown due to the rise of the Covid-19 pandemic. The ecommerce businesses in the U.S. alone saw an increase of 44% when it came to online sales compared to the previous year. The online consumers in the U.S. spent a whopping 861 billion USD on ecommerce stores, which was triple the amount spent during 2018. 

• It is projected that ecommerce will account for more than $6.5 trillion in sales by 2023, which is 22% of retail sales, globally(Thrive My Way, 2022) 

Ecommerce sellers should be aware of how fast the online retail industry is growing. It is projected that the ecommerce sales will account for almost a quarter of all retail sales in 2023, once again showing us that ecommerce retail is not showing any signs of slowing down any time soon. As an ecommerce merchant, you should have proper strategies in place to deal with the ever-growing customer demand for online products. 

• Thirty-two countries surveyed by eMarketer said they had experienced at least double-digit rates of ecommerce growth in 2020 (Thrive My Way, 2022) 

It is no secret that ecommerce has grown all over the world, not only in China and the U.S. Businesses surveyed from 32 different countries have reported that the growth in their online business was in double digits in 2020. This was mainly due to the Covid-19 lockdowns the entire world was facing and people had to move towards shopping from online sellers instead of heading over to physical stores. These numbers of growth for ecommerce businesses will only continue to grow now that people have become more accustomed to online shopping. 

• Expectations are that the B2B ecommerce market will expand by 17.5% annually up to 2027(Thrive My Way, 2022) 

When it comes to ecommerce, B2C is not the only sector that has seen incredible growth over the years. Ecommerce merchants providing B2B services have also witnessed a boost, with businesses getting more comfortable with purchasing services and products from other businesses. The B2B ecommerce sector is also an area that will continue to grow steadily according to the projections up to 2027. 

Challenges Ecommerce Sellers Face 

• Merchants face a variety of difficulties with fulfillment, the first of which is the processing time for outbound orders, and secondly is system integration (SC Logistics, 2012)

As an ecommerce merchant, it is important to understand the different challenges you have to face while running your online store. In today’s day and age, you need to take all the correct measures to lower your processing time for outbound orders and work on acquiring the latest technology that can help with system integration. 

• There are currently over 26 million ecommerce Sites in the world (Thrive My Way, 2022) 

Ecommerce has grown significantly over the years. In current times, there are over 26 million ecommerce stores available for customers. The ecommerce sector is becoming more saturated with each passing day, and as an ecommerce merchant you need to provide your customers with the best possible service to stand out from the crowd and grow your loyal customer base. 

• In the United Kingdom, the Office for National Statistics has reported a 5.1% drop in retail sales due to covid-19 (Census, 2020)

The physical retail sales have gone down due to the pandemic, giving an increase to online stores. Although these are unprecedented times, ecommerce merchants must be ready to handle the growing customer demand and create an excellent online shopping experience for their customers in order to make their place in this competitive industry. 

• According to a report by S&P Global Market Intelligence, 2022 is on track to have the highest number of retail bankruptcies in a decade (S & P Global, 2020)

The retail market has been faced with a number of problems due to the Covid-19 pandemic. During this time, the pressure on ecommerce merchants has grown even more. As an online business, you must be able to do everything you can to create a top-tier fulfillment strategy and meet your customer demand. The strategies you use for your online business can help you attract new customers and retain the ones you already have. 

• 85% of businesses believe they offer personalized experiences, but only 60% of consumers agree that they receive it (Twiglo Segment, 2021)

As an ecommerce merchant, you have to make sure your customers are satisfied with the service they receive. Personalization plays a massive role when it comes to the success of your online store and creating a personalized experience for your customers can help you maintain a loyal customer base. Ecommerce merchants should focus on providing their customers with a personalized experience to improve the satisfaction levels for their online stores. 

• 62% of online shoppers say that past customer service significantly influenced their purchase decision (Shopify, 2022)

Customer service is a crucial part of your online business. As an ecommerce merchant, one of the biggest challenges you might face is providing your customers with excellent customer support and service. This is not something you can ignore because the customer service you provide can affect the decision of online shoppers to come back to your store to shop again. 

• Due to the imminent death of the third-party cookie, brands will likely fail to drive positive ROI from data-driven personalization and limit themselves to using first-party data only (Warc, 2019)

Ecommerce merchants are faced with another major challenge as the third-party cookie is ceasing to exist. This can make it difficult for online sellers to provide a personalized experience for their customers and target them with specific ads based on their data. Ecommerce businesses now have to settle for using first-party data only to customize the shopping experience for their customers. 

• 70% of brands cutting their budgets in 2022 will sacrifice investments in brand building (Warc, 2021)

As an ecommerce seller, you have to understand the importance of building your online brand and reputation. However, the budget cuts can lead to less capital being invested in building your online brand image and conveying your brand message to your audience. This can be a massive challenge as your customers will feel less connected to your brand if you fail to tell your brand story and invest in your online image. 

• Social media Cost Per Mille increased by 21.7% in 2021 compared to last year, so advertisers are paying $9.13 now instead of $7.5 in 2020 (Data Reportal, 2019)

Ecommerce sellers are faced with more challenges now as the cost for running ads on social media has increased. Social media has been a great tool for ecommerce businesses, whether small or large companies. This hike in prices comes as a massive challenge for ecommerce sellers that are trying to establish their brand online and connect with their audience through social media platforms. 

•  64.4% of merchants have a single distribution center (SG Logistics, 2012)

As an online merchant, it is crucial to have more than one distribution center for your business. If you work with one distribution or fulfillment center, your business can become restricted to one region or location and it can stop you from branching out and reaching customers in diverse areas. Having one distribution center for your ecommerce business also means you have to pay higher shipping prices when you ship your orders out to different countries. 

•  39.4% of merchants outsource at least some of their fulfillment operations (SG Logistics, 2012)

As an ecommerce seller, it can take a toll on your business if you carry out your entire fulfillment operation in-house. You will require more money to invest in storage, inventory management, picking and packing, shipping orders, and getting software for your business. It is crucial that you understand the importance of outsourcing your entire fulfillment process to third-party companies that can help you focus on other areas of your online business, such as marketing and sales. 

• 24.7% of merchants say that delivery costs are the biggest challenge their supply chain faces

As an ecommerce merchant, one of the biggest challenges you face are the delivery and shipping costs. You can work with ecommerce shipping companies that also provide order fulfillment to get better, more affordable shipping rates. 

•  Since 2012, net asking rents on distribution centers have risen 5.6% each year (JOC, 2022)

Ecommerce sellers that need to rent storage space for their inventory and stock are faced with another massive challenge as the rents have been increasing steadily since 2012. It is becoming more difficult to find a storage space or warehouse that can provide affordable rates. 

• Human error is the number one cause of fulfillment issues (Square, 2021)

Ecommerce sellers need to understand the importance of using technology and robotics to automate their processes. Human errors can be extremely costly, which is why investing in bespoke technology that can automate most of your fulfillment operations can be beneficial for your online business. 

• Up to 12% of merchants are unprofitable simply due to distribution costs (Logistic Bureau, 2021)

One of the biggest challenges ecommerce merchants face are the increasing costs of distribution operations. Almost 12% of online sellers don’t make enough profit because they have to invest more money in their distribution and fulfillment processes. 

• The top 20% of merchants have a rate of 99.8% for on-time shipments. The bottom 20% of merchants only hit 94% or lower (WERC, 2022)

Ecommerce sellers have to deal with low one-time shipments and orders if they are not in the top 20% of online merchants. If you have a low rate of one-time shipments, you are less likely to become a profitable business. As an ecommerce merchant, you need to work to improve your one-time shipment rates. 

• Almost 50% of warehouses track order cycle times (the time between receiving and shipping an order) manually. 19% don’t track them at all (Logistic Management, 2018)

Tracking the order cycle times manually is not the best option as it can lead to human errors and inaccuracies. However, almost half of the warehouses choose to do this manually, causing more challenges for ecommerce sellers. A massive percentage of warehouses don’t track the order cycle times at all, which means that ecommerce sellers do not have access to this important information and cannot use it to improve their operations. 

Online Shopper Behaviour Statistics To Keep In Mind

As an ecommerce seller, it is important that you keep the behaviour of your online shoppers in mind and understand the latest statistics and trends. These statistics can help you improve the experience you create for your customers and provide them with the kind of service they are looking for. 

• About 51% of customers consciously consider sustainability and eco-friendliness factors when making purchase decisions (PWC, 2022)

• In the last year, businesses have lost $756 billion because of poor ecommerce personalization (Thompson, 2021)

• Online buyers are three times more likely to avoid brands that over-personalize compared to those who don’t  personalize at all (Gartner, 2021)

• 52% of online shoppers are attracted to brands that share their values and 66% of them to brands that are transparent with the sources of their materials, their company culture, and how they treat their employees (Accenture, 2022) 

• 55% of online shoppers tell friends and family when dissatisfied with a product or company (UPS, 2022)

• 86% of buyers are likely to give extra money for a better experience, with a more significant 89% starting their own business and turning into competitors due to a poor experience (Oracle, 2011)

• It has been reported that only 2.57% of ecommerce website visits have been converted into purchases in the United States (Net Solution, 2022)

• 73% of online shoppers use multiple channels when shopping online (HBR, 2017)

Social Media Can Help

As an ecommerce seller, you must understand the important role social media platforms play for your business growth. Utilizing different social media platforms can help you reach your target audience all over the world and improve your brand image. It is vital that you understand the latest social media trends and statistics and use them to create an overall excellent shopping experience for your online customers. 

• There are around 4.62 billion social media users in the world (Data Reportal, 2022)

• Online stores with a social media presence see an average of 32% more sales (Big Commerce, 2022)

• Almost 30% of U.S internet users have purchased directly from a social platform in 2020. Yet, China generates ten times more revenue from social commerce sales (eMarketer, 2021)

• You can reach 808.4 million people from LinkedIn Ads (Data Reportal, 2022)

• The annual spend on social media ads reached $154 billion in 2021 (Data Reportal, 2022) 

• More than 40% of working-age internet users use social media to research brands and products—this percentage rises to more than 50% for online shoppers between 16 to 24 years old (Data Reportal, 2022)

• According to Meta’s data, there are more than one billion monthly global users of Facebook Marketplace and 250 million active stores using Facebook Shop worldwide (Statistia, 2016)

• 18.3% of U.S. adults have made purchases through Facebook (eMarketer, 2021)

• 11.1% of adults in the U.S. have made purchases through Instagram (eMarketer, 2021)

Are You Looking For A Partner To Help With Your Ecommerce Fulfillment? 

If you are an ecommerce seller facing trouble when it comes to providing your customers with the best possible service in all areas of your business, then you have come to the right place! Meteor Space is one of the leading fulfillment companies that can help you develop better fulfillment and shipping strategies to keep your customers satisfied with your online business. 

We provide a complete suite of services, from storage and warehousing, pick and pack fulfillment, inventory management, fast and affordable shipping, to bespoke software solutions, and much more. As one of the leading fulfillment centers, we can also handle your returns and provide top-notch customer support for your online store. 

With our help, you don’t have to worry about a single thing! Once you team up with Meteor Space, you can forget about the worries of order fulfillment and timely deliveries and focus on creating excellent sales and marketing strategies for your business. We make sure your customers always receive the best service possible and you have the time and resources to tackle all ecommerce seller challenges that come your way! 

Do you want to find out more about how we can help you overcome the challenges you face as an ecommerce seller?

Get in touch with us today!