Skip to content

How to Solve e-Retailers’ 3 Main Customer Service Challenges   

June 13, 2024

Why are only 44% of Americans satisfied with the online retail experience? Some say that online retail is stuck in a tricky situation, caught between the headwinds of rapidly shifting consumer expectations and a more financially cautious public who is less willing to trust, spend, and remain loyal to brands, unless they offer an exceptional shopping experience. Is this a case of fickle online consumers or are there legitimate roadblocks adding friction to what should be a frictionless journey from search to checkout? It turns out there are three customer service challenges that both e-retailers and consumers agree need to be solved, and the solutions may not be easy, but they will be necessary to ensure that online spend, and loyalty, remain strong. 

A Mismatch Between Expectations and Reality 

While most Americans use online shopping at some point or another, 65% of their total shopping budget is still being spent in physical stores. Why are Americans still choosing to spend most of their money in-store, even when another survey showed that over half of consumers prefer the convenience of online shopping?  

There seems to be a disconnect between what online shoppers want to do and what they’re doing. Over half are not satisfied with their current online experience. They crave more personalized interactions and recommendations, and one in five felt the whole user experience needed an overhaul. Online customer support also saw some of the lowest satisfaction scores

While today’s consumers have much higher expectations for seamless online experiences, especially digital natives like Gen Z, retailers also understand the need to make online shopping more intuitive and personalized. Over 16% have reported that they are prioritizing the use of customer data to provide insights that allow them to optimize and customize the digital journey.  

One solution is to leverage recent advancements in AI that can pull data from past purchases and browsing histories to hyper-personalize product recommendations and promotional offers. This could be rolled out through conversational AI chatbots that act as digital shopping assistants, or live support agents that can present the best offers based on a user’s historical data.  

The goal should be to make the digital shopping journey second to none, with seamless transitions between channels, so customers can complete their purchases the way they want.  

A Lack of Consumer Trust 

According to recent surveys, eCommerce platforms are suffering from a lack of consumer confidence. Most had a trust rating of only 48%, while physical stores enjoyed rates of 70% or higher. And that measurement is critical, because those who lead in digital trust often enjoy a more positive consumer perception and annual revenue growth above ten percent.  

What often causes those trust issues? Concerns about payment security and fraud (80%), lost payments due to glitches (55%), and frequently receiving damaged items (42%). Online purchase scams are also more prevalent, with global reported losses totaling over USD $40 billion, which is why customers are increasingly concerned about their data and cybersecurity. Yet, only 41% of retail leaders say their organization is fully mitigating cybersecurity risks or ensuring data privacy.  

What can be done then to restore consumer trust? Strong data protection practices are essential. This should extend to any CX partners who manage contact center operations for eCommerce retailers. Data should only be collected to create a more seamless, personalized experience, and retailers need to be transparent about how that data is collected, used, and stored. CX managers should also have the latest AI cybersecurity tools and data security teams to monitor systems. 

While damaged goods or delivery delays can’t always be avoided, one more way to restore consumer trust is to ensure that your support teams are always accessible, regardless of channel. Ensure they have the knowledge and issue resolution skills to address and fix issues promptly. And as our next point shows, make sure the return process is convenient and effortless.  

An Out-of-Control Returns Process 

The National Retail Federation calculates that for every $1 billion in sales, the average retailer incurs $145 million in merchandise returns, with a significant difference between the average return rate of in-store purchases (10.02%) versus that of online purchases (17.6%).  

In response to the increase, online retailers have turned to stricter return policies and shorter return windows, all in a bid to curb this trend and stem losses. However, instead of lowering the total of returns, 59% of e-retailers have reported an increase over the same period, showing that these tactics have failed to work, and could have unintended consequences for customer loyalty.  

While online retailers need to find some way to manage the cost of returns to retain profitability, studies indicate that a poor return experience would make 80% of shoppers less likely to purchase from that retailer again.  

Instead of making returns more difficult for customers, the solution could be to make the process more efficient, which would save on return costs. Many retailers still rely on manual return processes or force customers to call in to support centers to authorize a return. But, a CX partner with advanced tech capabilities could create customized AI tools or time-saving automations that make self-service more appealing for item returns, thereby saving on labor and staffing costs.  

It could also be a case of simply shifting mindsets to view this as an opportunity to enhance customer loyalty by supporting easy, convenient returns through the communication channels that customers prefer. 

Prioritizing CX Above All Else 

While there may be no easy solution for each of these retail challenges, the important thing is prioritizing customer experience above everything else. With stiff competition from large online retailers like Amazon, there’s simply no choice but to offer a superior shopping journey if you want to stand out in the market. 

Those who live purely in the digital space will need to prioritize customer-centric solutions and strategic CX partnerships that allow you to scale and pivot as customer preferences evolve over time. While those who offer in-store and online sales will need to meet the demand for seamless hybrid shopping experiences that allow customers to choose the purchase channels they prefer.  

The real winners will find a way to merge the best of technology and of people to provide the ultimate, personalized shopping experience.  

Ask us how you can do this by partnering with itel for your retail CX services.  

View more

More from the Stories section

How AI Analytics Can Give Car Rental Companies a New Edge 

AI can give car rental companies a new competitive edge against car shares and ride hailing apps, but it all starts with having the right data...

YOUnique: Jose Blanco  

Meet Jose Blanco, a Customer Experience Coach from itel Honduras. He is responsible for ensuring a high quality of service, helping our supervisors be...

Celebrating 12 Amazing Years of Being Team itel 

As itel celebrates 12 years of CX excellence, CEO, Yoni Epstein, CD, reflects on what being team itel really means...