Quality Evaluation
On the Internet, it is more or less impossible to make sure, beyond doubt, that (tangible) products have the desired features (e.g. design, material, colour, fit), giving rise to a quality evaluation barrier to e-commerce.
Security Risks
It has been suggested that transaction security (such as the credit card number being picked up by third-party hackers) is mostly a perceptual problem in e-commerce. Nevertheless, the fact remains that it may be one of the more complex barriers to be overcome.
Lack of Trust in Virtual Sellers
The fear of fraud and risk of loss has commonly been cited as a significant barrier to B2C e-commerce, with empirical research findings supporting this assumption.
Delivery Times
In tangible product categories, any home-shopping method involves delivery times which mean that the Internet is at a disadvantage to physical stores as it fails to meet the customers’ need for instant gratification. Consumers may thus be reluctant to wait for the delivery of ordered goods for days/weeks if the same product can be collected immediately in physical outlets.
Lack of Personal Service
While e-commerce offers great opportunities for one-to-one marketing, it significantly reduces, or even puts an end to the personal service characterizing traditional commerce.
Time-Consuming Nature
As noted, e-commerce may offer consumers savings in time. In practice, however, using the Internet for commercial purposes may prove to be too much time consuming for many users. There are multiple reasons for this:
- (i) Difficulties locating websites/products/services
- (ii) Registration procedures required to access services
- (iii) Making price comparisons
Cost of Entry
Cost of acquiring a computer, etc.
Cost of Use
Internet access fees.
Limited Internet/Computer Experience
Reluctance/difficulties operating computers and/or browsing the Web.
Poor Connection Speed
Due to low bandwidth connections, using the Internet may be time consuming, and thus frustrating.
1. Lack of Trust
With news of devastating data breaches constantly in the headlines, many people are understandably wary of giving their sensitive personal information to e-commerce websites.
As a result, more than half of consumers who don’t shop online said that they are worried about scams, personal data breaches, and identity theft. E-commerce stores that want to win over new customers must therefore demonstrate their serious intentions to safeguard shoppers' private data.
Using SSL certificates and complying with standards such as PCI DSS for protecting payment card information are just two essential steps.
2. Slow Adoption of Mobile Payments
One of the biggest drivers of e-commerce growth has been mobile shopping:
- 45 percent of U.S. consumers say that their smartphone is an “essential shopping tool.”
- Mobile devices now account for 19 percent of e-commerce sales.
- In the last 6 months, 79 percent of smartphone owners have used their device to make a purchase online.
Unfortunately for retailers, the mobile e-commerce boom hasn’t translated to a corresponding growth in mobile payments.
According to a survey by market research company GfK, just 17 percent of U.S. consumers say that they’ve used a smartphone or tablet to pay for a purchase in the last 6 months. The consumer insight speculates that “high levels of concerns about the integrity of data transactions” are to blame for U.S. shoppers’ reluctance to adopt mobile payments.
3. Online Payment Fraud
Tech market research firm Juniper Research projects that losses from online payment fraud will reach $48 billion by 2023. This is more than double the current figure of $22 billion in 2018.
According to Juniper, the rise of mobile transactions and mechanisms for instant payment will be major drivers behind the increase in fraud.
In order to quell shoppers’ concerns about payment fraud, e-commerce stores need to take proactive measures:
- Choose trustworthy payment processors that can detect fraudulent activity.
- Use HTTPS encryption everywhere on your website.
- Make sure that you install the latest updates and security patches for your software and platforms.
4. Poor Shopping Experience
For physical retail stores, customers who have one poor shopping experience aren’t necessarily gone forever. Proximity, convenience, and the lack of alternatives are all factors that can cause unhappy customers to return (and perhaps improve their opinion).
However, competition is much fiercer when it comes to e-commerce. The Global Ecommerce Study finds that 36 percent of online shoppers will go elsewhere after just a single poor experience.
After all, with so many websites available at a single click, why keep shopping somewhere that didn’t wow you the first time?
What’s more, the effects of a bad impression have a ripple effect on the unhappy customer’s social circle. 54 percent of shoppers say that they share their poor experience with others, including telling their friends and leaving a negative review.
In other words, creating a positive experience for shoppers is even more important for e-commerce stores than for physical retail outlets.
5. Lack of Favourable Reviews
“Social proof” is one of an e-commerce marketer’s favourite buzzwords. At heart, people want to know that there are other people like them doing the same things and patronizing the same businesses.
Because consumers can’t see and interact with products when shopping online, it’s even more important to know that other users approve of the items they’re considering.
- 88 percent of consumers say that they trust online product reviews as much as they would trust a recommendation given to them in-person.
As a result, a lack of favourable reviews – or a lack of reviews at all – can be crippling for e-commerce stores.
- 57 percent of consumers say that they won’t patronize a business with fewer than 4 stars out of 5
- 11 percent more say that they require a perfect 5-star rating
6. Cart Abandonment
Convenience is one major reason that consumers prefer online shopping, but it also comes with its downsides. For example, abandoning your shopping cart on an e-commerce website is as simple as exiting the window.
