A: A real challenge for e-commerce companies today is Amazon. It’s hard to keep up with their scale. They're basically their own distribution, logistics and delivering company, which lets them not only offer two-day delivery, but free returns. You can get something sent to you, try it on and if it doesn't fit, get the new one. That's expensive and hard to compete with.
But it’s more complicated than simply keeping up. Many merchants on Magento Commerce are struggling with how to balance the idea that Amazon is both a partner and a competitor. Tonnes of merchants host their shops on Amazon Web Services. But they're also maybe selling products that are competitive with things sold on Amazon. This is where merchants have to figure out for themselves what amount of “coopetition” they’re willing to accept.
The reality is that listing with Amazon can extend a merchant’s reach because so many shoppers go to Amazon to start their search for product. If I'm looking for new shampoo, I’m probably going to go to Amazon and type “shampoo.” If you want to be discovered, listing your products on Amazon is a really great place to find new customers and find new audiences. But you're also feeding into the Amazon ecosystem and feeding them data about what products are valuable.
This leads to another major challenge in e-commerce — data. Data security is probably the biggest risk of e-commerce. There have been so many breaches that it sometimes seems like everybody is getting hacked, which makes it a real challenge to ensure your store is secure and safe. Protecting that data is an is an enormous cost for e-commerce companies.
And it gets more complicated with new regulations like GDPR. Some businesses may simply stop selling in Europe because they can’t adapt quickly enough to comply with GDPR and because the costs of violating it are too high. These issues with data, privacy and security require a lot of time and a lot of resources. Otherwise, you might not only be hacked, but you might become financially obligated to some government institution because you violated their regulations.