What are the Disadvantages of E-Commerce
While running an e-commerce business has numerous advantages and benefits, this business model also presents some disadvantages for companies and customers.
As such, in this article we will be exploring some of the key disadvantages to running an online e-commerce store.
1) Lack of Personal Contact
Some consumers appreciate the personal touch of visiting a physical store and interacting with sales people. Such a personal touch is especially important for companies selling high-end products, as customers not only want to buy the merchandise, but also want to have a good experience during the process.
2) Product Prices and Comparisons
With online shopping, consumers can compare many products and find the lowest price. This forces many merchants to compete on prices and reduce their profit margins. Frugal online shoppers will have no problem finding the best deals.
3) Requires a Decent Internet Connection
This is pretty obvious, but don’t forget that your customers need Internet access before they can buy from you! Because many e-commerce platforms have features that require high-speed Internet access for an optimal customer experience, you may end up excluding visitors with slow connections and therefore experience a drop in sales.
4) All Eggs in One Basket
E-commerce companies rely heavily (or solely) on their websites. Even a few minutes of inactivity or technological failures can result in substantial revenue loss and customer dissatisfaction.
5) IT Security Issues
More and more companies and organizations have become prey to malicious hackers who have stolen customer information from their database. This could not only have legal and financial implications, but also reduce customer confidence in the company.
6) There is a lot of Online Competition
We can’t talk about competition without talking about Amazon. Their reach and their power make them hard to surpass. Amazon is not the only company that is challenging smaller retailers: there is a lot of competition in almost every niche.
7) Traditional Trade is Still Popular despite Decline
According to Jeff Bezos, CEO of Amazon, online sales represent only 10% of total retail sales in the US. While one of the benefits of e-commerce is its growth, physical retail still holds the largest share of the market.
8) Shipping Can Be Unpredictable
Lost or stolen parcels, broken goods and delivery delays complicate the shipping of products. Regardless of the quality or speed of the packaging of the products, there is no guarantee that they will reach their destination as soon as possible.
9) Electronic commerce versus traditional retail trade
The shopping experience with e-commerce and traditional commerce is not contradictory. Many physical stores have a digital point of sale to complement their activities and many major e-commerce brands have embarked on the physical sphere of retail.
Both platforms have their advantages and disadvantages, and both seek to provide a quality customer experience. Every company needs marketing strategies such as giving out flyer printing or social media campaign to stand out from the competition and position itself as a reputable brand. Both can coexist and reach customers who are ready and happy to spend money.