Untapped Potential: E-Commerce Challenges & Opportunities

The advancement of the internet and its applications have made it possible for consumers to experience commerce like never before. New businesses spawned in areas not previously imagined and consumers were empowered to partake in global transactions. Nevertheless, global commerce is still being held back, riddled with poor customer experiences and major data privacy concerns.

What are the rising trends in the digital world? What challenges are businesses being confronted with? If these were solved, what global projects could materialise with digital help?

The Digital Economy

According to the World Bank, over the past decade, the number of people online has increased from 20% to 46% globally. There are now more mobile phone subscriptions than there are humans. The digital revolution has meant faster and more trade flows. With emerging technologies, such as Internet of Things, Blockchain and Artificial Intelligence, the world is once again set for a great reduction in transaction costs which allows for such trade flow expansion.

Consumers are becoming increasingly digital, and e-commerce is expected to hit $4.8 trillion by 2021. M-commerce (mobile commerce) accounts for approximately 60% of total e-commerce sales, with large markets like China dominating purchases. In the e-commerce world, the more mobile the better, but ongoing methods of transaction and customer onboarding aren’t helping.

The Belt and Road Initiative

The Belt and Road Initiative is an infrastructure project involving 65 countries and eventually 80% of the global GDP. It promises to catalyse commerce to a new level across Asia, Europe, the Middle East and Africa. The plan is to promote transportation and cross-border movement, including high-speed rail-freight and passenger rail. According to commentators, one of the main goals of the project will be to export cheap labour from China to less-developed countries. This will initiate massive labour migration. Physical infrastructure, like new roads, airports and factories, will translate into a need for workers and project managers. An increase in employment and commerce in these regions will require simpler onboarding technologies, and thereby, better digital infrastructure.

The Trust Deficit

With just 10% of consumers worldwide believing they’re in control of their data, you are likely to feel disempowered about the information you share online.

The age of the internet has become the age of big data. An increasing number of businesses have started taking advantage of the sharing of customer data. This has had a clear impact on consumer trust. A global KPMG survey found that people perceive social media companies as asking for too much personal information and that 50% of them delete their browser cookies and manage their social media settings. In almost every market, 75% of respondents were uncomfortable with online shopping data being sold to third parties. The current state of consumer trust in regards to online transactions is deplorable and with good reason.

The age of big data has become the age of big data breaches. The ride-hailing company, Uber, has recently been forced to pay 148 million USD following a data breach where 57 million customer accounts were exposed. The Marriot Hotel breach in 2018 affected the accounts of up to 500 million guests, with five million unencrypted passwords being accessed, along with encrypted payment card information and encryption keys. The biggest data breach in 2018 was that of Aadhaar, the Indian National Identification Database, where the hackers traded access to 1.1 Billion identities for just eight USD.

Not only are people inundated with such stories of data exploitation, they are also aware of the reasons for it. With 87 million Facebook accounts being compromised to make psychometric profiles, the Facebook — Cambridge Analytica scandal revealed how data can be used for political purposes. The collection of data has become synonymous with its abuse.

Lawmakers have responded to the trust deficit with regulations such as the General Data Protection Regulation (GDPR) in the European Union and the California Consumer Privacy Act (CCPA). These regulations emphasise user control of data, often including the right of consumers to request the deletion of their data and their consent to its use.

Bad Data

Human typing is notorious for causing errors. According to Experian, 5% of Asia-Pacific consumers said they intentionally submit inaccurate information to avoid disclosing personal data and 20% said they make mistakes in their data entry when signing up. Poor quality data causes an average of 15 million USD per year of losses across businesses.

Cart Abandonment Rates

Cart abandonment is when a consumer visits an e-commerce website, selects their item(s) and proceeds to the payment page. When they’re guided to input information to pay for and receive their item, they leave the website without completing their purchase.

According to Barilliance, e-commerce websites have an average of 73% cart-abandonment rate when the consumer is using a desktop, 81% when using a tablet and 86% when using a mobile phone.

Some of the main reasons for cart abandonment are as follows:

· The user had to create a new account.

· The checkout process was too long or complex.

· The consumer does not trust the website with their payment card details.

It is interesting to think of how this would play out in the physical world — A customer would enter a shop and select what they wanted to buy. They arrive at the checkout counter, then leave their items there and walk away. Why? The store insisted they first create a customer account, or the checkout process took too long, or they were concerned about the security of their credit card information. This is unheard of in the physical world, but digitally it is all too common.

High abandonment rates is a consumer experience problem, arising from the design of the checkout process. Customer onboarding, currently has got speedbumps. The filling out of online forms delays the customer and the transaction, causing huge amounts of potential revenue loss for businesses.

The internet is one of humankind’s most significant inventions, creating endless opportunities and possibilities. However, it forces consumers to get anxious about their personal information. Bad data is commonplace, and online businesses are continuing to lose considerable revenue. We seem to be getting the worst of both worlds. Is there a future in which we can get the best?

Sphere Identity streamlines the customer onboarding process in a safe and compliant way while also giving individuals their privacy back.

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