The Challenges Facing eCommerce Businesses in Q4 2023 and How to Solve Them
Encompassing Black Friday, Cyber Monday, the run up to Christmas, and Boxing Day sales, the golden quarter is by far the busiest time for eCommerce, accounting for the lion’s share of annual revenue for many online retailers. That means it’s never too early to prepare for the hectic Q4 period to make sure you’re maximising sales and profit, so here we look at the specific challenges that retailers may face this year, and outline ways to overcome them.
Shoppers are spending less
Spending forecasts for Q4 2023 are looking much healthier than this time last year, so it’s currently unclear exactly how eCommerce will be affected by the looming global recession, however studies show that consumers are currently cutting back on non-essential purchases. As a result, large-scale retailers are likely to apply heavy discounts in a bid to win more customers during the peak trading period, but if your margins are already pretty tight, emphasising value is a tried and tested alternative.
Rather than competing purely on price, focus on value perception instead, and make sure your on-site content and marketing campaigns highlight how your products can save shoppers time, money and resources across the longer term.
Big brands are dominating the market
Household names such as eBay and Amazon are continuing to increase their eCommerce market share, making it difficult for independent retailers to grow online, however there are a number of ways that other businesses can better compete.
One effective method is to understand how your brand differs from internet giants and lean into that unique selling proposition, which can be anything from unrivalled product knowledge, sector expertise and exceptional customer service to rare materials, flawless craftsmanship or a commitment to sustainability. Make sure your USP is consistently communicated throughout your store’s customer touch points and marketing messages, giving shoppers a clear reason to choose your brand over its competitors.
Customer loyalty is declining
As the eCommerce sector continues to expand, today’s consumers have millions of online stores to choose from, making customer retention much more difficult for both big and small businesses. One-size-fits-all loyalty schemes are also less favourable with savvy shoppers, so online retailers should put retention strategies in place rather than gimmicks, and identify the perks and benefits that are most likely to appeal to their specific customer base.
Also look at ways to personalise your customer journey and marketing campaigns to build a stronger connection with shoppers, and remember that retention is significantly cheaper than acquisition, so a high quality service - from initial enquiry to purchase aftercare - is an absolute must.
Operational costs are increasing
Many eCommerce businesses are facing higher running costs in tandem with the cost of living crisis, resulting in profit dips for even the biggest brands. While some price hikes are unavoidable - such as energy charges and shipping fees - it’s recommended that retailers regularly review all overheads to operate as efficiently as possible. As well as renegotiating supplier contracts, assess whether there are any day-to-day tasks or marketing functions that can be automated, and consider improving your store’s product pages with more detailed info to decrease the volume and cost of returned orders.
During the all-important golden quarter, accurate tracking across your marketing campaigns is also key to ensure that all channels are working hard for your business, enabling you to quickly spot and rethink any efforts that are delivering a low return.
eCommerce fraud is on the rise
eCommerce fraud occurs all year round, however it can be particularly prevalent during Q4 as peak trading creates more opportunity for theft, causing retailers with inadequate eCommerce fraud detection in place to collectively lose billions of dollars in revenue. On top of implementing eCommerce fraud prevention tools to protect payments and customers, tackling ad fraud should also be a high priority, as invalid traffic - whether it’s malicious, non-malicious, or even just accidental - can waste as much as 30% of your ad spend. For example, when searching for your company, existing customers often navigate using the brand search campaigns as a front door to your website; meaning search engine spend is wasted on returning customers. The action is not malicious, but can drain huge amounts of spend which otherwise could be driving new, conversion-ready traffic to your website.
While there are a number of eCommerce fraud prevention companies that promise to safeguard your budgets from bots and fraudsters, to truly maximise your marketing ROI, TrafficGuard detects, mitigates and reports on digital ad fraud before it even hits your advertising budget. Our smart solution also uses machine-learning to protect your campaigns across every channel - covering Google Search, social networks, affiliate networks, and your mobile apps - to keep your traffic clean and empower you to achieve better results with the same ad spend.
For a personalised report on how invalid traffic is impacting your eCommerce advertising performance, click here to book a free audit today.
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