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7 Threats to eCommerce Businesses in 2024 (You Won’t Believe Number 6)

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7 Threats to eCommerce Businesses in 2024 (You Won’t Believe Number 6)

The eCommerce landscape is constantly evolving. While the digital shift has provided immense opportunities for eCommerce businesses, it has also introduced new challenges and threats. As we move into 2024, eCommerce merchants need to be aware of the latest threats to protect their business.

As part of our informative mini-series focusing on essential insights for brands in 2024, we’ve compiled these key topics for easy navigation. Simply use the links provided below to swiftly access each of them.

  1. eCommerce Industry Risks: Security Breaches in Data
  2. Logistics and Supply Chain Complications
  3. eCommerce Industry Risks: Vulnerability to Social Engineering Deceptions
  4. Concerns Around Illegally Copied Content
  5. eCommerce Industry Risks: High Volume of Return Requests
  6. Excessive Reliance on Major Digital Platforms like Facebook and Google
  7. eCommerce Industry Risks: Adaptation to Emerging Online Business Models

In this post, we will explore the top 7 threats to eCommerce in 2024 that businesses should be prepared for.

1. Threat to eCommerce Businesses: Data Breaches

In 2022, eCommerce businesses faced an increasing number of keyword stuffing and data breaches. This threat is only expected to grow in 2024 as hackers become more sophisticated. Customer data is an extremely valuable asset, and a data breach can destroy trust, reputation, and sales.

eCommerce merchants need to implement robust cybersecurity measures like encryption, multifactor authentication, AI monitoring, and employee education to guard against data breaches. Encryption encodes data so it cannot be read by unauthorised parties if accessed. Multifactor authentication adds a second layer of verification such as biometrics or one-time codes to protect accounts. AI monitoring analyses user behaviour patterns to detect anomalies indicative of a breach. Educating employees on cyber risks helps avoid human error – the leading cause of breaches.

Regularly conducting penetration testing is also essential to identify and address vulnerabilities proactively. Ethical hackers simulate cyber attacks to uncover weaknesses in systems before actual hackers do. Fixing vulnerabilities found in penetration testing can prevent data breaches down the line.

In the event of an actual breach, having an incident response plan prepared is crucial. This involves notifying affected customers and relevant authorities right away as per legal obligations. Prompt action to contain the breach, secure data, and restore systems helps minimise damage. Post-breach analysis provides learnings to bolster defenses against future attacks.

Protecting your eCommerce business from data breaches requires vigilance. Regular Google Ads audits by a qualified PPC agency like PPC Geeks help identify vulnerabilities before cybercriminals exploit them. Our team of PPC experts and Google Ads consultants can guide you in implementing robust cybersecurity measures, penetration testing, and incident response plans. Contact us for a free consultation to safeguard your customer data. You can also check out what are the other benefits that PPC Geeks can do for your eCommerce business.

2. Supply Chain Disruptions

The pandemic exposed the fragility of global supply chains. In 2024, interruptions are likely to continue due to trade wars, climate change, geopolitical tensions, and more COVID-19 waves. Inventory and fulfilment delays directly hurt eCommerce merchants’ bottom line. Check out this link if your eCommerce PPC has hit a plateau amid these global uncertainties.

Businesses must diversify their supplier network to mitigate risks. Maintaining relationships with multiple suppliers in different geographies for each product category provides continuity alternatives when one supplier faces disruptions. Localising supply chains by sourcing from domestic suppliers could also cushion against global disruptions.

Strengthening relationships with suppliers and maintaining transparency can help navigate disruptions. Long-term contracts and supply commitments provide suppliers financial stability and incentive to prioritise orders during turmoils. Information sharing helps align plans and swiftly address issues. Supply chain collaboration is vital.

eCommerce businesses should also increase inventory buffers by boosting stock levels of crucial products. While it ties up working capital, the extra inventory allows the business to continue fulfilling orders smoothly when supply uncertainty strikes. Omnichannel capabilities like in-store or curbside pickup also help circumvent fulfilment bottlenecks during supply crunches.

3. Threat to eCommerce Businesses: Social Engineering Scams

As customers conduct more financial transactions online, social engineering scams like phishing and SMS fraud will rise. Attackers impersonate brands via emails, ads, social media, and texts to steal login credentials and credit card information. An estimated $20 billion was lost to business email compromise scams alone in 2021.

Customer education is crucial, but the onus lies on merchants to implement strategies like multi-channel authentication and anomaly detection to thwart scam attempts.

Multi-channel authentication requires verifying identity via multiple contact points when accessing sensitive information or making payments. This prevents scammers from gaining access by compromising just one channel like an email account.

Anomaly detection uses AI and analytics to identify suspicious activity deviating from normal patterns. Unusual account access locations, devices, times, and transaction values can trigger alerts and heightened security measures.

Secure collaboration tools can prevent business email compromise scams where hackers infiltrate company email threads. Email security solutions also provide phishing threat detection.

Overall, a layered defense combining vigilance, education, technology and communication is imperative to counter rising social engineering scams.

4. Pirated Content

The availability of pirated digital content on eCommerce platforms is increasing. This is a nightmare for merchants dealing in goods like books, music, movies and software where digital piracy is rampant. Pirated digital files significantly undermine legitimate sales and erode brand reputation when customers unknowingly purchase counterfeits.

Image showing digital piracy in ecommerce business

eCommerce players must actively monitor listings across marketplaces to identify and swiftly report fake pirated products. Having brand protection software that continuously scans for trademark and copyright violations can help automate policing at scale.

Enhanced vetting of third-party sellers on eCommerce platforms is also essential to combat pirated goods. Checking seller credentials, company history, and reviews and looking for warning signs like super cheap prices can aid screening. Strict seller onboarding procedures and proactive monitoring even after approval reduce piracy ingress points.

Brands can also lower counterfeiting appeal by offering compelling original products, competitive pricing, and sales exclusives. Making legal purchases and access more convenient through incentives and great user experience deters piracy diversion.

Omnichannel fulfillment combined with purchase verification approaches like unique serial numbers, blockchain tracking etc. help customers authenticate genuine products. Prompt takedowns, lawsuits and coordinated pressure on piracy havens are other remedies.

It is important to choose the best eCommerce platform that can protect your business.  Follow this link to know which are the best hosting platforms for eCommerce.

5. Threat to eCommerce Businesses: Excessive Returns

eCommerce return rates typically range from 20-30%, much higher than in brick-and-mortar retail. Excessive returns can sink profit margins due to processing costs and reduced resale value of returned items. Some buyers abuse lenient return policies, ordering multiple sizes or colours with the intent to return most items.

AI can help spot serial returners based on past patterns and impose limits. However, policies need to balance fraud prevention with maintaining an easy and frictionless returns process for honest customers.

Providing detailed product descriptions, specifications, size guides and high-quality images helps customers choose and size items accurately. Virtual try-on tools are useful for apparel. This reduces returns related to improper selection.

Operating dedicated resale channels for returned items helps recover value, especially for apparel merchants. Returns due to damage or missing parts can be minimised with proper packaging and shipping care.

Adjusting return windows according to product category and being stricter on heavily abused categories is another tactic. Free and easy returns are proven to boost sales, so merchants need to carefully optimise return policies rather than pursuing an unviable zero-tolerance stance. Click here to learn the ways to boost your eCommerce business.

6. Over-reliance on Facebook and Google

Many eCommerce merchants are over-dependent on Facebook and Google ads for sales. In 2024, these giants will likely raise advertising costs further and may introduce restrictions that disadvantage small businesses. Merchants must diversify marketing across multiple channels like Instagram, TikTok, SEO, email, and influencers. Relying excessively on one platform is risky.

SEO learning delivers organic traffic and is more cost-efficient long term. Having a fast, mobile-friendly website with engaging and keyword-optimised content boosts search rankings. Email nurturing guides cold traffic to conversion. Instagram and TikTok provide visual discovery suited for certain products. Influencer marketing leverages personas for authentic peer promotion.

Omnichannel attribution helps quantify the precise contribution of each channel using analytics tracking. This identifies the highest-performing platforms to double down on. While Facebook and Google ads offer scale, diminishing returns kick in beyond an optimal spend. Dialling back overinvestment reduces advertising costs without proportionate sales dips.

The ideal media mix has a budget distributed across 8-10 channels for stability. Even within channels, spreading across multiple ad formats and placements mitigates reliance on one option. With strategic diversification, no single platform alteration significantly impacts revenues.

7. Threat to eCommerce Businesses: Emergence of New eCommerce Models

Social commerce, livestream shopping, and quick grocery delivery will disrupt eCommerce in 2024. Platforms like Instagram and TikTok enable merchants to seamlessly integrate browsing, shopping and social interaction. On-demand ultrafast delivery services like Gorillas and Getir are raising customer expectations. Legacy players need to reinvent themselves to compete or acquire promising startups playing in these spaces.

Social commerce is projected to overtake eCommerce globally by 2025. Young demographics are moving social media engagement and shopping into one experience. Instagram Shops, Shopify for TikTok etc. allow browsing and buying without leaving the app. Hashtag challenges drive discovery and purchases. Livestreams with influencers provide real-time interactivity and limited promotions that create urgency.

Quick commerce startups are offering 15-30 minute grocery delivery by using networks of micro-warehouses in dense city areas. This taps into growing consumer demand for instant delivery. Quick commerce will completely remodel logistics, store formats and inventory for grocery retail. eCommerce players need dedicated metro fulfilment infrastructure to compete.

Startups also lower operating costs via gig workers and technology. Legacy brands must reconfigure supply chains, operations and cost structures to profitably match quick commerce economics and experience. Entering via the acquisition of promising startups in this space is an option.

Key Takeaways

The eCommerce sector will continue to grow despite these threats. However, prudent mitigation is vital for merchants to protect profits. Cybersecurity, supply chain diversification, customer education, policy tuning, marketing expansion, and business model innovation will be crucial. eCommerce players that proactively address these threats will gain a competitive advantage to successfully expand their business in 2024 and beyond.

Author

May Dayang

I am an expert administrative professional with a strong background in marketing. Exceptionally skilled in organizing, planning, and managing tasks

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