Analytics

Biggest eCommerce Challenges in 2021

From increased competition to rising ad costs and managing customers’ expectations, 35+ eCommerce brands weigh in with their biggest challenges.

Jessica Malnik Jessica Malnik on January 19, 2022 (last modified on March 22, 2022) • 14 minute read

After many ecommerce brands saw record sales in 2020 amid the COVID-19 pandemic, many thought it would be more of the same in 2021. 

That wasn’t the case as most brands ran into a whole host of challenges this year from sales, marketing and customer service to supply chain and logistics struggles to hiring shortages. 

what part of your ecommerce business experienced the biggest change in 2021

Of the 40 brands we reached out, the majority worked for B2C ecommerce brands. 

what type of ecommerce business are you

In this post, we’re taking a closer look at the biggest ecommerce challenges that these brands faced in 2021. 

We’ve divided up these challenges based on whether it is a B2C brand, B2B brand, or an ecommerce service provider. 

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Challenges Experienced By B2C Ecommerce

Here are the biggest challenges experienced by B2B ecommerce brands.

More competition  

According to our survey, the biggest challenge that B2C ecommerce brands faced this year was increased competition. 

which of the following did you find the most challenging when it comes to your eCommerce business in 2021

“One of the biggest challenges that my ecommerce business has faced in 2021 is a surge in competition,” says Jessica Kats of Soxy. “The Covid-19 pandemic threw most companies in a flurried state. Many retail and brick-and-mortar companies shifted to ecommerce to keep their business afloat. The rise of literally thousands of new ecommerce stores caused us to face massive competition that we weren’t ready for. 

Coupled with supply shortages, it became quite challenging to keep up. We upped our sales and marketing efforts with unique offers and loyalty rewards in the face of this crisis. We had to invest in SEO to get our brand presence and discount ads across more people and shifted to a heavier presence on social media.”

Stephen Light of Nolah Mattress adds, “The biggest challenge we faced as an eCommerce brand in 2021 was differentiating ourselves from the competition. In an increasingly digital world, everyone is catching on to best online practices and it’s harder and harder to stand out from the pack. What we did was take a look at our competitive pricing, made sure our marketing constantly drove home our USP (unique selling proposition), optimized our website for mobile use, and increased our SEO. Anything we could do to push the extra value we offer over our competitors.”

Steven Walker of Spylix agrees, “As a small ecommerce business, the Pandemic of 2020 had many effects on our sales. Even though our products were uploaded online, larger companies took over and poached small businesses. There was a lot of competition since other competitors also converted to a digital platform. 

I immediately worked on my sales strategy and converted everything to online sales, payments, and delivery status. Things were pretty good even during peak covid times. However, I stayed behind the others due to my ignorance and lack of attention. While I was busy crafting for my sales, my competitors evolved their marketing styles. There was a visible difference between their and my work. Even though I had more clients, it was a sure deal for them to shift to other platforms. I took longer to deliver and had a normie website. And as I feared, a bunch of my clients switched to my competitors. It made me angry but also drove me to betterment. I also worked on my forums and designs. It was a bit of work, but I managed to better myself. I hired a website designer and hired more staff. It gave me enough time to Focus on other in-process developments. Finally, after three months of a bumpy journey, my E-commerce has got back on track and is on the way to more sales.”

This increase in competition caught some merchants by surprise. 

“Our biggest and most surprising challenge for our eCom business in 2021 was sudden increased competition,” says Jonathan Gron of Owlratings. “We had anticipated the opposite (decreased competition) since most businesses had been affected by the pandemic. We had seemingly overlooked the fact that due to the restrictions imposed on the populations regarding physical contact, more businesses would convert to online stores. 

In early 2021, we experienced an influx of brands online. It was becoming difficult to keep up and our market share was being eroded. Our competition was increasing daily and we realized that if we did not find a solution soon enough, we risked closing shop. 

Our solution was to enhance our marketing strategies to capture new potential clients. We settled on using Search Engine Marketing (SEM). We studied what most users searched on the web in our industry and created a targeted campaign to drive ads to them. We also optimized our website to attract more traffic. These approaches were effective as our customer base expanded and the conversion rate grew. We were lucky to remain one step ahead of our competitors, most of whom were joining the eCommerce space for the first time so it would take longer to learn and apply advanced marketing approaches like SEM.”

Related: Direct vs. Indirect Competition: Most Important Things You Can Learn from Monitoring Both

Managing growth 

Other businesses found themselves with more demand than they could feasibly handle.  

“Like many eCommerce businesses, we experienced the biggest growth in the use of our web platforms,” says Scott Steward of Hicollectors. “People were shopping from home in large numbers than ever before in history. 

I confess that we were caught off-guard as we never anticipated so much interest and growth in a short while. Within the first few weeks of January, we started getting reports that our website loading speed had dropped, the mobile version of the site was crashing a lot, and our inventory was running out real fast. 

We moved to solve the issue fast by upgrading the bandwidth of our website so it could accommodate more traffic. This also helped to improve the loading speed of our platform. We also deployed our IT team to optimize the mobile version of the site as we noticed that most of the traffic was originating from mobile devices. 

On the inventory part, we were limited in terms of options as logistics were also a problem due to Covid-19 restrictions which meant our stock took longer to arrive. To solve this, we took up Dropshipping where we marketed items on our site and when customers placed orders, we took our commission and got the original vendors to ship the items to our customers.”

Salva Jovells of Hockerty adds, “For Hockerty, online tailor leader, 2021 was a very challenging year. Would people keep buying suits after the pandemic? Will the postponed weddings from 2020 take place? 

Luckily, 2021 has been a year of big growth for us having +70% sales already vs 2020 or 2019 and we managed to reach new audiences with messages aligned to the different situations all over the countries where we sell. In order to get adapted to the new reality, we also had to broaden our range of products, bringing the custom-made to measure concept to products that were not the ones that you would find in a traditional tailor. We released jeans, field jackets, and even boots and loafers. 

With those new products we were reaching a wider part of the population but we also gave chances to our repeating customers to buy also made to measure clothing for home office, after work or even weekends.”

Adapting to consumer behavior changes 

Most merchants also had to adapt to the new ways that customers were shopping since 2020. 

“The biggest challenge was the change in consumer behavior online,” says Kelly Maxwell of Seniors Mutual. “The pandemic really throttled some sales funnels we had and boosted others. We pivoted to what works. If it’s not working, stop putting money into it and move on.”

Andy Birks of Simply Aquarium adds, “Without a doubt, the biggest challenge for our small content business in 2021 during the pandemic has been the ongoing effects of consumer uncertainty and supply. 

Whilst ours is a content business and we don’t sell physical products we rely heavily on our affiliates and the uncertainty in consumer behavior has had a massive impact on them. We deal with a couple of large and some smaller pet distributors and over the last year have gone from a period of lower demand in products to higher demand than usual. This in turn has affected their ability to supply some goods when needed. And the impact on my business is we were often inadvertently recommending products that quickly went out of stock or were discontinued. 

We addressed this challenge by carefully tracking all of our products across our site and working closely with our affiliates to update discontinued links on a daily basis. We also sourced new affiliates and suppliers for some of our products to keep things going during some periods.”

Related: Get the Most Out of Google Analytics’ Behavior Flow Report with These 6 Tips

Managing customers’ expectations 

This also meant having to provide a better customer experience.

“One of the biggest challenges my business faced in 2021 is the consumer’s higher expectations regarding delivery and post-purchase services.” says Alex Buchnev of Paddling Space. “During lockdown and remote work, eCommerce businesses boomed as consumers transferred their transactions mainly online. But along with that is the sudden competition and the quantum leap of an improvement in the services provided by eCommerce stores. The solution is to keep up with the changing scene and level up the business by optimizing your online store and adding plug-ins that will help consumers while choosing what to purchase, such as including an FAQs tab. This significantly reduced the number of personal inquiries we receive during the process of their purchase and after.”

Changing business models 

Other businesses found themselves suddenly having to shift their business model or pricing strategy. 

For example, Dustin Sitar of BriteCo says, “BriteCo switched from a b2b2c strategy to a DTC strategy. The website and marketing had to undergo massive shifts in a short amount of time to be effective in a new channel. We hired internally and outsourced to agencies to quickly scale the requisite skill sets for the new challenge. There were challenges in doing this fast. The team at BriteCo had to be agile and shift our mindset. Overall it was a huge success that increased our long-term potential.”

Related: Most Profitable Business Models for Agencies: According to 20 Agencies

Paid advertising challenges 

The recent Facebook ad and iOS tracking changes in 2021 also negatively impacted many brands. 

“The recent changes with iOS tracking made it challenging to market to potential clients with pinpoint accuracy, which was once one of the most cost-effective paid advertising options,” says Michael Moran of Private Label. “The retargeting of clients with Facebook ads was a key driver for bringing a first-time visitor back to our website. Yes, you can still do this on desktop users and Android, but most of our clients are iPhone users on mobile. 

As our ad costs rose, we decided to reduce our monthly ad spend and focus on conversion rate optimization. Finding the minor tweaks on our website has allowed us to convert more visitors quickly! It’s a long-term, ongoing process that takes experts and lots of A/B testing. Conversion Rate optimization should focus on store owners in 2022 and beyond.”

Rising ad costs came on top of increased ad competition. 

“The biggest challenge for us was the increased competition for online advertising,” says Bradley Katz of Axon Optics. “Many businesses have pivoted online in 2021 following the pandemic and we have seen the impact of increasing competition in the form of higher cost per acquired customer which has made it more difficult for us to advertise online profitably. We have sought to strengthen our other acquisition methods including physician referrals and organic traffic, and reviewing our funnel. For example, focusing on informational content for people higher up the funnel and then capturing their emails through a developed sales funnel.”

Related: 16 Expert Strategies for Researching Your Ad Campaign’s PPC Keywords

Challenges Experienced By B2B Ecommerce

B2B ecommerce brands faced many of the same challenges as B2C brands. 

However, some also faced security challenges.

For example, Daniel Carter of Office Furniture Online says, “I created my firm’s ecommerce website earlier this year. Since then, I’ve faced numerous challenges, but none has been more pertinent than cybersecurity issues. 

My website faced multiple Distributed Denial of Service (DDoS) attacks in the first few months after being launched. The site’s server was flooded with hundreds of requests from untraceable IP addresses, causing the entire website to crash for long periods. Moreover, many customers complained that they received malicious emails from our website, indicating that the site was targeted by malware. Working together with my IT team, I put in place some security measures to put the cybersecurity risk to bed. 

These measures were: Creating a standalone server for our site Backing up our data daily Configuring two-factor authentication Updating our platform on a regular basis Encrypting our entire store.”

Challenges Experienced By Agencies or Consultants Working for Ecommerce

These challenges didn’t just affect ecommerce brands, but also the service providers that worked with these brands. 

“2021 saw an increase in our ecommerce business,” says Sandi Legeman of 301 Digital Media.   “As more retailers moved to online platforms as the Covid-19 pandemic continued, we saw an uptick in demand for support for e-commerce clients, both from a media and advertising perspective, but also in terms of technical and operational support. We were able to leverage our digital marketing knowledge and technical expertise to better serve our clients more efficiently and help them build engaging relationships with their consumers.”

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Overcome Ecommerce Challenges with Databox

While all ecommerce businesses will experience setbacks and challenges from time to time, 2021 was a more challenging year than many expected, including dealing with increased competition, paid advertising attribution struggles and supply chain issues. 

You can’t get rid of these challenges overnight. However, setting up monitoring and reporting to spot the problem early on can save a lot of time and money. This is where using software, like Databox, can help. You can give Databox a try for free and see for yourself how much easier reporting is.  

About the author
Jessica Malnik
Jessica Malnik Jessica Malnik is a content strategist and copywriter for SaaS and productized service businesses. Her writing has appeared on The Next Web, Social Media Examiner, SEMRush, CMX, Help Scout, Convince & Convert, and many other sites.
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