Building a stable eCommerce business in 2020 is more than possible thanks to the emphasis on social distancing and contactless delivery. It’s also pivotal that you take proper precaution and create an effective risk management plan for your platform before opening doors to international customers.
According to Fortunly, some of the reasons why customers prefer online shopping include 24/7 availability, time and money savings, as well as to avoid crowds. However, up to 82% of shopping carts are abandoned before checkout for a variety of reasons, including hidden costs, mandatory registration or lack of trust.
In the following segments, we will address common issues related to risk management for eCommerce and how to avoid them on your own platform. Once we break down what an effective risk management plan should include, we will address the benefits of creating such a back-end plan in 2020. Without further ado, let’s dive in.
Stay Up-to-Date
When it comes to eCommerce risk management, the worst offender by far is a general lack of knowledge when it comes to possible threats. As such, it’s advised that you educate your coworkers and support agents on the possible pitfalls in eCommerce risk management. Any of the below-mentioned issues can cause severe issues for your eCommerce platform’s long-term sustainability. Make sure that your staff is aware of, and doing their best to avoid them going forward. The worst offenders in this industry include:
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Extensive security risks – credit card fraud, account information theft and malware intrusions
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Customer disputes – refund, chargeback and complaint tickets related to purchased goods
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Shipping issues – high shipping costs, poor tracking, lost packages, lack of communication
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PR issues – poor SEO, poor reviews, negative word of mouth
Circumvent Fraudulent Behavior
The best way to put your risk management plan in motion is to take preventive action in regards to fraudulent behavior. According to PayPal, 48% of businesses think they are too small to be targeted for fraud; however, 57% of businesses have experienced losses in 2019.
This makes it important for eCommerce platforms to take extra precaution in regards to discouraging fraud on their storefronts. Enable two-step authentication, identity check, SMS confirmation, and other confirmation steps based on your judgment and available resources. While simple and easy checkout is good for customer retention, it will also increase your risks of fraud which can significantly hurt your brand reputation.
Personally Address Dispute Tickets
When it comes to customer and supplier disputes, there is rarely a straightforward answer. As such, your support team should address each ticket by hand and analyze both sides of the story before passing judgment. Some customers will undoubtedly have legitimate concern and problems with their orders. In those cases, refund requests should be approved.
However, if you suspect fraud or malicious intent, don’t be afraid to stand your ground and provide the disputed party with proof of your concerns. What matters the most however is that you take a close look at each dispute ticket no matter how miniscule it may seem at first. Never leave your real-world customers in the hands of an AI algorithm or an automatic filtering system. Making this a part of your risk management plan will ensure that your brand reputation is pro-consumer oriented.
Employee Wellbeing Measures
If your eCommerce platform finds itself in crisis due to poor sales, lack of supply or other problems, your employees should not suffer for it. Don’t cut down on your employees’ salaries or let them go prematurely just because your platform hit a temporary roadblock.
Employee retention is just as important in eCommerce as in any other industry and poor turnover will make it difficult to hire new staff later. As such, your risk management plan should include a section on how to proceed with resource management once you hit a crisis scenario.
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Cut down on content marketing expenses
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Halt website and storefront development projects
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Put customer loyalty incentives in place to raise sales
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Address the immediate crisis ASAP to return to normal quickly
The Payoff of Creating an Effective Risk Management Plan
Once you have a good risk management plan in place and are ready to anticipate potential issues, what benefits can you gain from doing so? Having an effective risk management plan available will allow your staff to react quickly and efficiently if any crisis scenario should happen to your platform. In turn, this will lead to several important payoffs for your storefront, such as the following:
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Increased supplier trust and number on your platform
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Increased customer conversion and engagement rates
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Improved SEO ranking due to reach and mentions
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Improved platform stability and security of customer info
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Increased profit margins due to efficient and fair dispute handling
Value of Brand Confidence (Conclusion)
Creating a risk management plan is more than just preparing for the worst. Such a system will build confidence in your brand and ensure that customers and suppliers trust your eCommerce platform with their time and resources. Most importantly, it will allow your staff to take a proactive stance to maintaining a stable, secure and professional brand for your business. No one thinks they can become a victim of fraud or malice until it actually happens – don’t wait and take active measures for your benefit. Doing so will do wonders for your brand confidence and enable organic growth for your platform.