Improve Retail Store Performance: eCommerce Pros & Cons 2024

Improve Retail Store Performance

The eCommerce space is dynamic and full of challenges. Technology is growing day by day and performing effectively with improve retail store performance. While sometimes businesses misconstrue growth as profitability, other times they struggle to balance cost and customer experience. 

Moreover, from consumer behaviour to competitors’ strategies to technologies, the trends keep emerging and changing, as do the challenges. On top of it all, the high rate of returns (up to a whopping 40% in some categories) sticks out like a sore thumb.

So how do we tackle these challenges? The solution is a simple, two step process.

  • Understand these challenges.
  • Following the best practices to win over them.

Be certain that executing these two steps is the start of your leadership. This will not only expand your market understanding but also ease your journey to the top. Cherry on the cake – maximized profitability 

That is why we are here to aware you of the prominent 5 challenges in the eCommerce space and share 10 best practises that will help you tackle them and improve retail store performance in its entirety.

So without any delay, let’s start with the challenges.

Top 5 Challenges to Improve Retail Store Performance

Challenges to Improve Retail Store Performance

In the past three years, the eCommerce industry has witnessed untamed growth. Riding on the altered consumer behaviour favouring D2C businesses, the industry catapulted into an unprecedented growth trajectory, swiftly ascending to new heights. 

This shift in consumer behaviour led to the mushrooming of numerous eCommerce platforms competing with each other to reach their customers. However, not all these businesses could capitalize on the high growth potential of eCommerce.

Because with high potential come great challenges (yes, inspired by Uncle Ben), and eCommerce is no different. Experts point to 5 most prominent challenges that undermine an eCommerce business and lead to business failure. Here, we have discussed these 5 challenges in considerable depth for a complete understanding.

Not all Growth is equal

The global e-commerce market is expected to be at $6.3 trillion in 2023, and by 2026, it will grow to reach over $8.1 trillion. (Forbes)

While this growth is promising, at the same time, you should be wary. As pointed out by McKinsey, amidst this growth spurt in the eCommerce space, achieving profitability has remained a significant challenge. 

In fact, many businesses struggle to turn their soaring sales figures into sustainable profits. The reason is the rush to capture market share often results in escalated costs, eroding margins. 

To have a successful and thriving eCommerce business, you need to differentiate between profitable and unprofitable growth. Not all growth is equal, and not all growth leads to high profitability. 

Some growth might involve high costs or low-margin sales that don’t contribute significantly to the bottom line. For example, an eCommerce business might experience growth in sales but at the expense of heavy discounts or costly marketing campaigns, resulting in reduced profits or even losses.

Similarly, entering international markets to expand your customer base is tempting, but the initial setup costs and logistics might eat into profits, raising the question of whether it’s a sustainable move.

Therefore, finding the right balance between expanding market reach and ensuring profitability is an intricate dilemma for eCommerce enterprises.

Learn how to improve retail store performance and drive profitability with our insightful blog on best practices in the industry.

The High Return Conundrum

The challenge that haunts many eCommerce businesses is the complex issue of returns. The eCommerce industry’s average return rate was around 16.6 percent in 2021, i.e., every sixth product is returned; this increases even more during festive seasons.

Returns impact your profit margins in multiple ways. Beyond the direct impact of sold goods getting returned, handling returns also incurs substantial logistics and operational costs. 

From return shipping to restocking, every step of the return process adds to operational expenses, exerting pressure on the bottom line. Moreover, items returned might not always be in a resalable condition, leading to inventory complexities and potential revenue loss due to markdowns or write-offs.

More importantly, managing returns delicately is also critical to preserving customer satisfaction and loyalty. It is important to streamline the return process to ensure it’s convenient and straightforward for customers. Read how to optimise returns in the next section for a possible solution.

Diverse Consumer Behaviour and Preferences

As we discussed in the above sections, consumers have gone digital-first. Individuals who were previously hesitant or infrequent online shoppers turned to e-commerce for their everyday needs. 

This shift poses both opportunities and challenges for businesses. On one hand, it opens up a vast digital marketplace where companies can reach a broader audience and offer convenience through online platforms. 

On the other hand, meeting the diverse preferences of consumers across digital and physical channels becomes a considerable challenge.

Adding yet another layer of complexity is the aspect of personalization. Consumers have grown accustomed to tailored experiences, whether it’s receiving targeted recommendations online or enjoying personalized assistance in-store. 

Improve retail store performance by leveraging core data analysis and seamless technology integration to deliver personalized experiences across digital and physical platforms.

Businesses need to leverage data analytics to understand consumer preferences, behaviours, and purchasing patterns across various touchpoints to deliver relevant and personalized experiences consistently.

Successfully navigating these challenges requires a comprehensive strategy that harmonises both digital and physical experiences. 

Brands that can strike the right balance by leveraging technology to personalize interactions, ensuring a seamless omnichannel experience, and prioritizing consumer trust are likely to thrive in this evolving landscape.

Also Read – Elevating Your Retail performance and Growth with Magento eCommerce

Balancing Cost-Efficiency with Customer Experience

More often than not, cost-efficiency clashes with exceptional customer experiences. This conflict arises when you try to streamline operations and reduce expenses while maintaining high-quality service levels.

Finding the right balance between operational cost optimisation and customer experience enhancement poses a significant challenge and requires a strategic approach.

You need to manage logistics, returns, and fulfilment expenses without undermining service quality to achieve a delicate equilibrium. Companies must find ways to minimize costs in these areas while ensuring efficient and satisfactory experiences for customers.

In our next section, we have discussed multiple best practices following which you tackle this challenges.

Operational Agility and Decision-making Speed

In the dynamic eCommerce landscape, the ability to swiftly adapt and respond is crucial due to the constant changes. Businesses must have flexible operating models that allow them to quickly change strategies and workflows in response to market fluctuations.

Another challenge lies in the need for digital fluency within teams. It’s essential to have skilled individuals who can effectively understand and utilize technology. This expertise empowers businesses not only to adapt but also to innovate, using digital tools and insights to stay competitive.

These challenges highlight the need for businesses to navigate the ever-shifting eCommerce landscape with agility. Identifying opportunities and overcoming challenges in real-time becomes essential to remain relevant and competitive in an environment that demands constant evolution.

When businesses have these skills and strategies in place, they can navigate the ever-changing eCommerce world more easily. They can spot chances to do well and solve problems quickly, making sure they stay strong and important in the market.

These are some important yet rarely discussed challenges that eCommerce businesses face today. But don’t worry; we are here to help. What follows is a list of the top 10 best practices for eCommerce businesses in 2024. Read to find the right growth for your business.

Top 10 eCommerce Best Practices in 2024

eCommerce Best Practices in 2024

With years of working with different eCommerce businesses, we have found that the following practices will help you tackle the challenges we discussed above:

Strategic Alignment

For a successful eCommerce business, setting clear objectives is of utmost importance. When every team, from marketing to logistics, understands and works towards the same goals, decision-making becomes seamless, cohesive, and laser-focused. 

For instance, aligning the marketing team’s objective of increasing sales with the logistics team’s goal of minimizing fulfilment costs can lead to strategic choices that drive overall profitability.

For this, you can also seek help from businesses offering eCommerce solutions for retail industryThey will help you take the right step forward.

Find a Profitable Product Mix

Here you can explore SKU-level analysis—a game-changer for eCommerce success. This analysis helps you dissect each product’s profitability, understanding which ones drive the most revenue and margins. 

Armed with this knowledge, you can strategically promote these products through suggestive selling or targeted promotions, enticing customers to add more items to their carts. This simple tactic can significantly elevate the average basket size, contributing to increased sales and profitability.

Availing of comprehensive eCommerce app development services will be a smart choice. This app will not only help you expand your customer reach but also improve your business operations for profit maximization.

Category Expansion

This is a rare gem to gain a significant strategic advantage. You can consider entering higher-margin categories or launching private-label brands. 

There are a number of examples wherein companies expanded into lucrative niches or developed in-house brands and witnessed substantial boosts in profitability. 

Think about how you can replicate this strategy within your eCommerce realm, potentially attracting a customer base seeking complementary products to your current offerings.

Operational Efficiency

Your physical stores can be more than just retail spaces; they can be hubs for efficient order fulfilment. 

Utilizing these spaces strategically, along with integrating omnichannel services, can supercharge efficiency and drive sales. 

The ability to offer services like “Buy Online, Pick Up in Store” (BOPIS) not only reduces delivery expenses but also entices customers to step into your stores, potentially making additional purchases.

Further, an omnichannel retail management solutions will help you better manage your channels

Returns Optimization

As we saw above, returns are one of the sore points for eCommerce stores. 

They can prove to be a bane for eCommerce businesses by significantly impacting profitability. However, optimizing this process is a game-changer. 

Given that 22 percent of the products are returned because they look different, the BOPIS model would really make a difference. The customer would make a purchase once they were really satisfied with the product.

Moreover, encouraging customers to return items to physical stores not only reduces processing time but also significantly impacts margins. Imagine reselling returned items at full price due to optimised in-store returns—an effective way to minimise the impact of high return rates on profitability.

Cost Reduction and Customer Experience

Now, picture this—cost-saving measures that enhance rather than compromise the customer experience. 

Implementing self-serve lockers and adopting a multi-carrier approach are two strategic tactics that can significantly enhance cost efficiency while maintaining high service quality for customers. 

For those who don’t know, self-serve lockers are automated storage systems available in public spaces or stores. Customers use these lockers to pick up packages they’ve ordered online. 

They receive a code or notification to access a designated locker, where their item is securely stored until they retrieve it. These lockers offer convenience, allowing individuals to collect their packages at their convenience without needing staff assistance.

For businesses, self-serve lockers offer round-the-clock accessibility, reduce labour costs, and optimise space utilisation. For customers, they provide added convenience by allowing them to manage their packages independently. 

On the other hand, a multi-carrier approach allows businesses to choose the most cost-effective shipping options, ensures reliability by mitigating risks through multiple carriers, expands geographical reach, and increases negotiation power for better service terms. 

These tactics involve leveraging technology, assessing business needs, and establishing partnerships, enabling companies to streamline operations, reduce expenses, and improve customer satisfaction.

Agile Operations

In a rapidly evolving eCommerce sphere, agility is key to survival. Fostering a culture of innovation and adaptability enables rapid testing and quick decision-making. 

Imagine establishing cross-functional teams that can innovate, test, and implement new strategies swiftly. This approach not only minimises risks but also drives continuous improvement and innovation.

Digital Knowledge Development

Digital fluency across your teams isn’t just an option; it’s a necessity in today’s tech-driven landscape. 

Investing in the development of digital skills ensures effective collaboration and adaptability across all areas of your eCommerce business. 

Imagine a workforce well-versed in digital intricacies, seamlessly integrating technology into every aspect of your operations.

You can seek help from the top Magento development company in India, like Magento India, to digitally transform your e-commerce business.

Consistent Brand Experience

Imagine providing a consistent, personalised shopping experience that transcends digital and physical boundaries. 

By investing in technologies that offer seamless experiences, you create loyal customers who appreciate the consistency and ease of shopping with your brand. 

Case studies of companies adept at blending digital and physical experiences serve as excellent models to emulate.

You can also expand your operations and project yourself as a big eCommerce brand by setting up a multi-vendor marketplace. Let other sellers use your platform to sell and add to your revenue stream. 

You can choose Magento multi-vendor marketplace development services and be a bigger player in the market.

Accelerated Decision-Making

In the fast-paced eCommerce realm, swift decision-making is non-negotiable. Visualise an environment where ownership is clear, metrics are well-defined, and decisions are made swiftly and efficiently. 

This streamlined approach ensures you stay ahead of market shifts and evolving consumer preferences, allowing you to seize opportunities without hesitation.

Bonus Tip: Improve Retail Store Performance 

Magento is one of the leading eCommerce platforms, and has proven to be a catalyst for retail success. It arms your online store with tones of features, seamlessly integrating innovation, customization, and robust performance. As the best eCommerce website development company in India, we help you utilise Magento as the engine empowering your retailer business, transcending limitations, and driving unparalleled growth.

Bonus Tip Improve Retail Store Performance 

Fueling Retail Prosperity

With Magento as your cornerstone, the potential for retail success knows no bounds. Magento possesses extreme suitability for eCommerce businesses. The dynamic platform unleashes a world of possibilities, facilitating a personalised shopping experience that captivates customers, fosters loyalty, and drives sales. You can avail of Magento eCommerce development services and see for yourself.

Customization Redefined

Flexibility is the hallmark of Magento. Tailor your store to perfection, sculpting a unique brand identity that resonates with your audience. Harness the power of Magento’s customizable features to create an immersive shopping journey that delights and converts visitors into lifelong patrons. With leading eCommerce app development services, you have the option to get an eCommerce store with custom features specific to your business.

Optimised Performance, Elevated Results

With lightning-fast loading speeds and seamless navigation, the Magento platform optimises every aspect, ensuring a frictionless experience that keeps customers engaged and coming back for more. You have the choice to hire Magento developers in India to get the best Magento eCommerce for your business.

Scaling Heights of Success

Magento isn’t just a platform—it’s a pathway to retail ascendancy. Empower your business to scale effortlessly, accommodating growth without compromising on performance or user experience. With Magento, expansion becomes a journey marked by seamless efficiency.

Future-Proofing Retail Excellence

In an ever-evolving digital landscape, staying ahead of the curve is imperative. Magento’s innovative features and adaptability future-proof your retail venture, ensuring you evolve alongside market trends and customer demands.

Conclusion: Improve Retail Store Performance with Magento

These ten strategic moves are your blueprint for navigating the complex landscape of eCommerce. Whether it’s aligning objectives, optimising product mixes, leveraging operational efficiencies, or fostering a culture of agility and digital fluency, each step contributes significantly to your eCommerce success story.

Implementing these strategies might not be easy. If you need expert assistance, you can hire Magento developers and get the work done for you. 

Because this isn’t just about improving your eCommerce platform—it’s about transforming your business to adapt, thrive, and excel in a highly competitive market. 

Stay tuned for more insights and strategies that will further empower your journey towards eCommerce excellence!


  1. How can Magento improve retail store performance?

Leveraging Magento eCommerce development services, retailers witness an unparalleled boost in their store performance. With Magento’s customization and scalability, the retail experience elevates, driving sales and customer loyalty.

  1. What differentiates eCommerce solutions for the retail industry, especially with Magento?

eCommerce solutions tailored for the retail industry redefine customer engagement. Magento’s prowess in development services ensures a unique, customer-centric approach, enhancing revenue and market impact.

  1. Why opt for a Magento eCommerce Store Development Company in India?

A Magento eCommerce store development company in India, specialising in Magento marketing services, offers global-standard solutions. Their expertise in Magento’s capabilities creates bespoke eCommerce solutions for maximum impact.

  1. How vital are Magento marketing services for boosting retail performance?

Magento marketing services play a pivotal role in amplifying brand visibility and conversions. These services harness strategic methodologies, expanding your store’s reach and customer engagement.

  1. What makes Magento performance optimisation crucial for eCommerce success?

Magento performance optimisation is the backbone of a successful retail venture. Its seamless, lightning-fast performance is pivotal for customer satisfaction and retention.

  1. What benefits do Magento Multi-Vendor Marketplace Development Services offer?

Magento Multi-Vendor Marketplace Development Services extend a retailer’s reach and offerings. Collaborating with multiple vendors diversifies product ranges, enriching customer choices.

  1. How do Omnichannel Retail Management Solutions bolster retail businesses?

Omnichannel Retail Management Solutions seamlessly integrate sales channels, optimising customer experience and operational efficiency and driving overall growth.

  1. What sets apart a Magento eCommerce Website Design and Development Company in Gurgaon?

A Magento eCommerce website design and development company in Gurgaon combines local expertise with global standards. Their proficiency in Magento ensures cutting-edge, user-centric solutions.

  1. What advantages come with hiring Magento developers in India from a top Magento development company?

Hiring Magento developers in India from a top Magento development company offers access to skilled professionals adept at maximising Magento’s potential for retail success.

  1. How does the Magento eCommerce development service enhance retail store performance?

With Magento eCommerce development services, retailers witness transformative growth. The platform’s agility, coupled with robust marketing strategies, propels improve retail store performance to new heights.

Hire Magento developers in India for the best eCommerce solutions and improve retail store performance significantly.

Talk To Experts