Every 30 seconds, over 1 million dollars are spent online worldwide, making e-commerce one of the most profitable industries around; and it’s still growing. However, in spite of the increase in spending year over year and the rise of “always-on shopping,” many store owners aren’t happy with their sales figures.
The why can be anything from bad business management, unrealistic expectations, lousy products, an ineffective pricing model and much more. In this series, we’re going to look at some of the things that, even though they may seem trivial, severely impact your bottom line.
1. You’re Too Average
Every single business owner and manager out there knows that if their business has the slightest chance of being successful, it has to be different than everything else on the market. In this ongoing quest to keep up with competitors and their products, it’s very tempting to pick the strategies, features, campaigns or visuals others are working with and implement them for your own business.
Learning from other people’s experience is definitely a great way to evolve as a business but there’s a very fine line between adapting and adopting. Obviously, adopting is the easiest choice and most go for this option because when you’re trying to spend as little as possible and don’t really know how to adapt or come up with your own take, relying on the experience of a competitor seems like a great, hassle-free way of staying relevant.
People lose sight of the fact that something that’s been done before loses it’s wow value, it might not work for you at all and, given enough time, will most certainly turn your business into a carbon copy of whatever everyone else is doing. I don’t know about you, but this is about as far from different as you can get. What you should do is start with the basics and define your target audience as best you can and, once you understand what they have, think about what they need and how your business can provide it.
The most common pitfall for retailers, for instance, in defining their business is using pricing as the focal point in their strategy to differentiate themselves from everyone else in the market. Yes, having better prices is great, but it’s a strategy that can only go so far in ensuring you stay competitive on the long run, as it only takes one competitor with lower prices to blow your entire strategy out of the water. Instead, focus on the business itself and determine how the experience of shopping in your e-commerce store adds value to your audience’s lives.
2. You Seem Untrustworthy
Trust is essential for any business transaction but nowhere are the consequences of not having confidence in a seller as painful as in the e-commerce industry. That’s not to say that having potential buyers distrust your business is fine as long as you’re not running an online store, but a retailer selling goods in a brick and mortar shop offer a certain level of security simply because transactions are immediate and face-to-face.
When you purchase a scarf in a store, you walk into a store where you can see how the merchandise is stored, you immediately interact with the product and have the opportunity to evaluate it, and as soon as you’ve paid for it, you get to take it home.
E-commerce stores offer an inherently different experience. You find a seller, you evaluate a product based on photos and a list of features offered by the store (which may or may not be accurate), you pay for it and you receive your product in x number of days; meaning that if you’re not happy with it you’ll have to go through that lovely return process and might even have to pay the return fees yourself.
Buying online is more convenient and offers a much larger selection of products and promotions but it’s a lot riskier. Where an offline store can afford customers to be indifferent, e-commerce stores have to project trust right off the bat and have to work very hard to become known as a trustworthy seller; in an age where 55% of shoppers find reviews important when making purchase decisions, you can’t afford to be distrusted at all.
3. Your Business Model is Broken
A lot of people are convinced that there’s a market for anything and, to some extent, that’s true. A product has to either be in demand or you have to create the demand yourself and how well you understand, supply and/or create the demand dictates whether or not your business survives. As we’ve seen, on top of that, you’ll have to define your own flavor of supply to not just plainly sell a product but turn it into an experience.
One thing that gets overlooked in this process is not how big the demand is but what its actual value is. Let’s say you start a business selling handmade cupcake-shaped candles. While there might be a bunch of other people supplying the same type of product, it won’t be the same product so pricing will be a challenge, even more so since we’re talking about a handmade item.
There are several things to take into account when starting an e-commerce business like this, the most important of which are:
- How well you’re able to manage the cycle of order-manufacturing-delivery and how short can you make it.
- What is that sweet pricing spot where the product covers its own manufacturing costs? Is it profitable enough for you to be left with money in your pocket yet cheap enough that people buy it in sufficient volume to keep your business running?
- How good are you at describing, emphasizing and reiterating the craftsmanship and value of your product and business?
Selling cheap products will make you dependent on high volumes and the market may not have such high demands, while overpricing will create an obvious discrepancy between the actual value of your product and its price; unless you’re able to add something of your own into the mix, like having your cupcake-shaped candles smell like actual cupcakes.
4. Failure to Update Your Site
Websites are dynamic environments meant to act as a spotlight for your products, services and business itself and, as such, should change every single time one of these is updated.
Web designers and agencies pride themselves on building future-proof websites and that’s fantastic but the terminology we use to define the fact that they’re built to last from a technical standpoint and flexible enough to allow them to evolve with relative ease is making it sound like your website will be just as modern and relevant in 30 years.
What’s worse is that this misconception is somehow acceptable. Think rotary phones. They were great and were so sturdy that unless one got banged about, it was still likely to work pretty well. They were built to last but does that mean you should forgo email, accounting software, computers, smartphones and run your business solely on a rotary phone?
The way your website looks and feels goes a long way in building confidence and in validating your pricing so it’s important to evaluate and update it according to how the technology it was built on changes, the market’s needs, shifts in audience, changes in business strategy, rebrandings, the way your users interact with it and so on.
5. You're Not Bringing in Enough Traffic
If traffic volumes are the bread and butter of e-commerce stores, then converting traffic is its Holy Grail and in order to find it, you first need to know what to look for. Enter high traffic volumes. The more people visit your website, the more you learn about the demographics of those who immediately leave, browse, return and/or purchase.
Organic traffic is slow to take off and if you’re relying solely on it, you’ll have to wait a very long time to drive enough traffic to your website to get any type of actionable data. Social referrals can be a lot cheaper than paid awareness campaigns but if you want to drive a lot of people quickly, you should definitely invest in targeted awareness campaigns.
It might seem like targeting someone you know nothing about is kind of impossible but you can always work based on buyer personas built for offline customers, as well as work off of a few presumed buyer personas and test them. Once you’ve gathered actionable data it’ll be a lot easier to target your audiences and advertise on the platforms that show the highest percentage of conversions but it all starts from that relatively random pool of individuals visiting your website.
How have you corrected e-commerce errors? Let us know about your successes and challenges in the comments.
Computer image release info: https://www.flickr.com/photos/[email protected]/sets/72157646779778414/