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Oodie founder shares tips for navigating 7 e-commerce challenges

Online retail purchases are forecasted to make up 21 per cent of all retail purchases this year and 24 per cent of all purchases by 2026.

As online purchases continue to grow and digital technology evolves the sector, Davie Fogarty, founder of The Oodie and former AFR Young Rich lister, and Shark Tank Australia 2023 judge, shares his insights on seven dangers that online retailers must be aware of in this competitive market. 

Davie began his entrepreneurial journey at the age of 23 with just $500 in savings and an idea of a wearable blanket, he became an eCommerce success, with The Oodie having sold more than 8.1 million units, exceeding $500 million in revenue. 

Yet despite his resounding success, Davie acknowledges that he reached this point after several failed business ideas and startups, but his determination and hunger for results led him to acquire extensive digital skills. He taught himself the algorithms and systems of major social media platforms, growing Instagram accounts to 600,000 followers.

Beyond his own ventures, he shares his insights and strategies on social media to assist aspiring digital entrepreneurs. He says: “There are a lot of challenges, risks and dangers that come with launching and growing a business online. Some of these are, unfortunately, out of a brand’s control – but there are things you can do to lessen their risk and prepare for the potential roadblocks on the path to brand growth.” 

Davie now shares shares the 7 risks and challenges online retailers are likely to encounter in their business journey, through his mentoring service, Daily Mentor

1. Scam sites, counterfeit products and intellectual property fraud. In 2023 alone, Australia reported 182,593 scams, resulting in losses totalling $328,655,604. Fraudulent activities are becoming increasingly sophisticated, posing a threat to both brands and consumers. Davie recommends businesses establish robust monitoring and reporting processes to identify activity that is potentially harmful to their brand. Websites with fake brand products mimicking established brands are on the rise, can damage the reputations of original brands and make it hard for them to build consumer trust in the online space. Davie reveals, “We have recently come across a fake website imitating The Oodie. These scammers are advertising their sites on Google despite the brand being trademarked. Hundreds of people are being scammed daily, and despite doing everything we can, scammers are smart and are finding ways around the systems we have in place. It is proof that even big brands are not immune.”

2. Online reviews tarnishing brand reputation. Negative online reviews can tarnish a brand’s reputation, with 93 per cent of consumers admitting that online reviews influence their purchasing decision. While businesses cannot control customer reviews, they can monitor reviews online and respond to negative reviews with the aim of resolving them as quickly as possible and turning an unhappy customer online into a satisfied one. An escalation in negative reviews can point to an operational or product or service issue. Ongoing, brands would be wise to identify customer pain points and do everything they can to reduce them to avoid negative reviews in the first place. 

3. Intense competition. There are an estimated 12-24 million eCommerce sites in the world giving 2.64 billion online shoppers the ultimate in choice but fierce competition for brands. “Take time to research the product you want to sell and how you will sell it. You can research on social media platforms and on drop-shipping sites to identify what products are currently saturating the market. Tools like AI and other online software had made this process faster. Make your product and brand stand out. You want to be the consumer’s first choice,” Davie says.

4. Poor user experience (UX) and customer experience (CX). A seamless and user-friendly website along with efficient customer service is essential for sales conversions. Davie says complex navigation and slow loading times will turn customers away, and poor customer service processes will prevent them from coming back. Ensuring a positive user and customer experience can impact overall business success.

5. Low visibility on search engines. Google has 4.3 billion users worldwide and over 3.5 billion searches take place per day. In such a highly competitive online market, it’s essential for target customers to find brands easily on Google and other search engines. Poor search engine optimisation (SEO) can prevent customers from finding a product to meet their needs. 

6. Scaling and meeting demand. Rapid growth, while desirable, can strain a business’s infrastructure, supply and operations. Davie says, “Have a plan in place to prepare for the growth of your business. It can be challenging to maintain consistently high service quality, adequate inventory and efficient fulfilment when scaling rapidly. Networking with other entrepreneurs and remaining transparent with suppliers and your team can all help mitigate the risks associated with unprepared growth. Growth is exciting, but that also means it can be easy to drop the ball.”

7. Marketplace dependence – having your own platform. Approximately 27 per cent of online retailers use drop-shipping to fulfil customer orders , which offers an inexpensive way to run an online business. Heavy dependence on big online marketplaces for operating an online store can limit brand development. As a brand grows, having its own website and operation systems allows for greater brand control and a personalised customer buying journey. 

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