Top 10 challenges of E-commerce for B2C Businesses

E-commerce may seem seamless, but behind the polished storefronts lies a labyrinth of challenges. B2C businesses are battling platform dependencies, algorithm shifts, and evolving consumer behaviors. Throw in mobile complexities, logistical nightmares, and regulatory hurdles, and suddenly, running and scaling an online store feels daunting.

30% of consumers who have a bad experience with a brand don’t return, and that rises to more than 70% if consumers have three bad experiences — McKinsey

Beyond the surface-level issues, cybersecurity threats, payment fraud, and data compliance risks keep merchants on edge and threaten customer satisfaction. Relentless competition without integrating AI, RPA, ML, and other emerging technologies cripples the system further and weakens omnichannel expansion. In this article by Altumind, we break down the key challenges of e-commerce in B2C — let’s dive in!

Challenges of E-commerce for B2C Businesses

1. Logistical Hurdles: Merchants are struggling to optimize routes and minimize transit times. Last-mile rapid and reliable delivery as part of Quick Commerce is becoming difficult with urban congestion and fuel price volatility, causing delays, increasing expenses, and upsetting customers. Then returns/refunds add to the reverse logistics costs, making it hard to fulfill orders economically and on time. Mis deliveries, package theft, driver shortages, damaged goods disputes, and refund processing delays add to the growing logistical bottlenecks.

2. Lack of personalization: Randomized and irrelevant outreach messaging most likely hits the spam folder. Quite frankly, customers are exhausted. Why? Because they aren’t getting curated personalized experiences. Generic offers not tied to the unique customer KPIs are causing a disconnect. Marketing campaigns don’t translate to meaningful conversions. Brands can’t bridge the gap as most offers aren’t rooted in demographic, geographic, and other data sets.

3. Website Performance: Slow-loading web pages due to render-blocking JavaScript, uncompressed multimedia assets, unoptimized database queries, or inefficient caching mechanisms cause diminished user experience. Server downtime, unoptimized code, and bloated third-party scripts create latency issues that affect your CLS, FID, and LCP (Core Web Vitals) values and cause delayed content rendering.

4. Supply Chain and Inventory Management: Inefficient inventory management leads to stockouts, overstocking, and fulfillment delays. E-commerce businesses struggle with manual processes, inventory misallocations, disruptions, and SKU mismanagement, making it hard to adjust to seasonal fluctuations and sudden demand spikes. Poor supplier coordination, reliance on single-source suppliers, dead stock accumulation, inventory shrinkage, fulfillment errors, and restocking cycles compound the problem and reduce operational efficiency.

DTC business constantly lacked inventory. Some key stock-keeping units (SKUs) driving more than 15% of revenue had out-of-stock rates of more than 40% — McKinsey

5. Cybersecurity: DDoS attacks, Cross-Site Scripting (XSS), malware injections, etc., result in data breaches and compromise the credibility of e-commerce stores. Zero-day vulnerabilities in payment gateways and poor TLS/SSL encryption leave systems exposed. Weak encryption protocols and poor API security allow malicious actors to exploit the unpatched vulnerabilities, resulting in phishing scams, fake checkout pages, credential stuffing, etc., that erode customer trust and cause reputational damage.

6. Mobile Commerce: Poorly optimized mobile sites and sluggish app performance alongside inconsistent UI/UX across devices, excessive load times, and unresponsive payment gateways hinder seamless transactions on mobile devices. If that wasn’t it, most websites suffer from phishing scams, session hijacking, insecure payment integrations, and Man-in-the-middle (MITM) attacks from weak encryption protocols, resulting in high bounce rates and abandoned carts on smartphones.

7. Customer Acquisition Costs: Diminishing organic reach on SERP and ad saturation on Google, Facebook, and Instagram alongside the surge in CPC pricing have added to the woes of e-commerce businesses. Ad fatigue, banner blindness, and stricter regulations have burned marketing budgets with super lower ROAS (Return on Ad Spend). Email deliverability issues, unreliable influencer partnerships, and poor offline visibility inflate costs without increasing customer LTV (Lifetime Value).

8. Poor Customer Support: Amongst the plethora of challenges of e-commerce, inefficient and sluggish customer support is right up there. Delayed, incomprehensible, and/or incomplete responses reduce trust, lower conversions, and diminish customer loyalty in B2C. Lack of self-service like chatbots, poor knowledge bases like FAQs, misconfigured ticket escalation workflows, and ill-trained support teams increase operational overhead and compound inefficiencies, leading to customer dissatisfaction and high churn rates.

9. Infrastructure Scaling: Legacy infrastructure restricts the growth of B2C e-commerce businesses. From performance issues to cost overruns, B2C struggles with latency, timeouts, and degraded CX. Legacy monolithic systems don’t handle horizontal and vertical scaling too well. These architectures lack the agility to handle huge workloads. Without elastic cloud environments, unoptimized databases, predictive scaling, dynamic workload distribution, etc., businesses risk performance degradation and are forced into expensive and time-consuming infrastructure overhauls.

10. Limited Data and Analytics: Limited data and analytics are one of the many challenges of e-commerce that handicap their growth. Legacy data silos, fragmented data pipelines, and no real-time ETL (Extract, Transform, Load) processes prevent collation of customer insights. The lack of investment in data warehouses, data modeling, data visualization, etc., affects forecasting and responsiveness to future demands. Lacking on-the-fly decision-making, businesses become reactive and adjust to market demands much later.

Wrapping Up

E-commerce continues to be a cornerstone for B2C businesses striving to achieve scalable growth. The challenges of e-commerce cannot be overlooked, though. Addressing these issues to realize long-term growth necessitates a data-driven approach. By proactively mitigating risks and fine-tuning their e-commerce model, businesses can deliver an exceptional customer experience and future-proof their ecosystem from the incoming uncertainties.

As the digital commerce landscape evolves, embracing artificial intelligence (AI), machine learning (ML), analytics, and other technological innovations will be critical to staying ahead of the curve. If you’d like to integrate the same to unlock more value from your business, connect with the e-commerce experts at Altumind. Our tailor-made industry-specific e-commerce solutions will help you stay agile and navigate the challenges of e-commerce more efficiently.