9 Reasons Why E-Commerce Businesses Fail

April 4, 2017 by Nedim Talović

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Lots of E-commerce businesses are born every year, and lots of them fail every year. There are many reasons why this is happening.

In this blog post, I want to share with you 9 reasons why you’re struggling with the number of orders. If you follow these tips, and if you become very patient, I’m pretty sure that you won’t fail.

Sometimes you think that some E-commerce business owner is just a lucky man and successful because of his luck. But, trust me, luck has nothing to do with that.

His 500 published blog posts that drive 250k visitors per month are the reason. So, it’s all about patience and consistency.

Still, you don’t want to make wrong moves, so let’s see what mistakes you need to avoid.

#1 High Shipping Costs

According to the photo below, abandonment rates in retail are so high. For example, if 1000 visitors add a product to the cart, you shouldn’t be surprised if at least 657 of them abandonment.

Every online store struggles with that.

Abandonment rates in retail

However, the real question is why visitors abandon? Why do they leave your site without placing an order?

The first reason is nothing else than shipping costs.

Personally, I’ve added so many times a product in the cart because I just wanted to check the shipping costs. There was no other way to check it due to the poor user experience.

Reasons for cart abandonment

So, if you’d like to decrease an abandonment rate, you should decrease your shipping costs.

Now, the real question is this – should you lower shipping costs or make it completely free? According to Nick Kolenda, you should separate the shipping and handling.

Free Shipping Costs or Not

Personally, I’m fine with this as long as your shipping costs aren’t amounts like $7 or $10.

#2 Lack of Content Marketing

Succeeding in E-commerce industry means that you need to drive traffic to your site. Without that, you’ll surely fail even if your shipping costs are close to zero.

The best way to drive the traffic is actually taking benefits that content marketing gives you.

In fact, marketers are now spending $44 billion on content marketing which is the information that matters a lot.

Marekteres are now spending $44B on content marketing

Also, I need to say that content marketing and blogging is not the same term because you can do content marketing on various channels.

E-commerce businesses don’t invest in content marketing because content marketing is slow.

With content marketing, you can’t expect anything for a year or two because 10 posts won’t create a large impact on the business. But, when you write 200 or 300 blog posts, you’ll surely see how great content marketing is.

Next, you should know that you need to write long blog posts because they tend to rank higher in Google.

Average content length of top ten results

As you could see, you need to write at least 2,000 words. I’ll give you three reasons why in-depth content matters.

Firstly, it allows you to target more long-tail keywords which is less possible if your content is, let’s say, 200 words.

Secondly, in-depth content adds more value, so Google will always respect that and drive visitors to in-depth articles.

Thirdly, you’ll attract more backlinks because there will surely be more data, insights, and other useful resources.

There’s no reason to believe that you’ll build backlinks to your product pages unless you’re not Amazon.

Paulo Coelho Google SERP

Check out the photo above. Comparing to others, only Amazon pages have more than 100 backlinks.

#3 Bad User Experience

10 years ago, everything about SEO was actually about getting as many as possible backlinks. No matter if the quality of backlinks was poor or not.

In fact, you could visit different blogs and share spammy backlinks and you’d get the highest rankings.

Today, that’s not a case because everything about SEO leads to the user experience.

As a digital marketer, you need to make sure that your visitors have an outstanding user experience, and here’s what you have to do.

The first step is to make sure your online store loads very fast. Pingdom is the tool where you can check how fast your website is, and also, the place where you can see if your site is faster than competitors’.

So, open the tool, enter your URL and click on START TEST.

Pingdom Jellymetrics Test

The results will come after few seconds. As you can see, our site is faster than 89% of tested sites which is pretty good.

Jellymetrics Summary

Next, you have to make your site responsive because 65% consumers start shopping on a smartphone.

Consumers path to purchase

So, if your site is not mobile-ready, you’ll definitely fail.

Finally, I want to say that using heatmaps is one of the ways how you can improve UX. You don’t need to use commercial tools because there’s Yandex – 100% free tool which tells you how visitors use your site.

Yandex Scroll Map

As a marketer, you’ll definitely need to know how users use their website. For example, you can’t place ADD TO CART button above the fold. That way, the majority of your visitors will leave you.

That’s just one example why analyzing your site needs to be important, but I’ll talk later about data analysis.

#4 Lack of Email Marketing

Once you get enough traffic, you should be able to collect lots of new email subscribers. One of the most important reasons why your E-commerce business needs to do email marketing is its ROI.

Email Marketing ROI

However, the biggest challenge with email marketing is capturing emails. That’s not so easy, but there are many ways how you can do it.

If you have a large marketing budget, then you can always drive visitors from Google AdWords or Facebook Ads.

But.. traffic is just traffic, and you need to create a magnet lead. Let’s see how writing an eBook might work for you.

No worries. You don’t need to write 700-words book because eBooks can always have 100 pages.

I’d always suggest you check Google AdWords Keyword Planner because it’s great source of ideas.

If you take a look at the following photo, you’ll see that phrases related to fashion trends have a solid search volume and low suggested bid.

Fashion

That means the competition is too low, so it could be a perfect way to driving the visitors to the landing page.

When I say landing page, I mean something like this.

Kissmetrics Landing Page

On the left side, you need to add fields that you’re collecting about your visitor, and on the right side, there must be an explanation what the book is about.

However, be careful because if you ask too much information, your lead rate will go down because every additional field reduces a lead rate. I think you should ask for the name and email as well.

If you would like to learn more about collecting emails, you can check this article.

#5 Poor Data Analysis

Sending emails to the new subscriber isn’t enough. You need to send newsletters to your customers because you want to return them back.

Since email marketing allows you to send personalized and segmented emails, it means that you need to analyze your data. How else would you know what users X wants to buy?

Data analysis is not an easy job, but also, it’s not hard as it was years ago.
Even if you don’t know how to analyze the data, or you don’t have a budget for hiring someone who knows, you can do it on your own.

Here are some of the most popular machine learning apps or APIs:

  • BigML
  • Amazon Machine Learning
  • Google Prediction API
  • Azure Machine Learning

Association rules are a common way to discover relations between products in an E-commerce system.Association Rules

Simply said, if you leverage association rules then you’ll see a high impact on your business.

Next, you need to do A/B testings which will help you to optimize the store. The idea of A/B testing is simple.

A/B Tests

All you need is to split the traffic and check which variation (A or B) brings better results.

Also, don’t forget that you need statistically significant results because otherwise, it makes no sense.

#6 Bad Photos

A few days ago, I was searching for backpacks and that’s the time when I actually realized how much I hate online stores that don’t have a quality product photo.

What’s more, I found few shops without photos which is horrible practice.

So, if you want to increase your conversion rates, you definitely need to hire a photographer to make outstanding photos because that will help your business.

When it comes to image dimensions, you probably think that larger images will produce more attention. Well, maybe.

According to ConversionXL, type of the product matters a lot. Specifically, the spec-driven products like hard drive show a pattern of increased visual attention with increased image size.

ASOS Shirts

On the other side, design-driven products like dresses or shirts, show a pattern of decreased visual attention with increased image size.

What does it mean?

It means that you need to find a sweet spot when it comes to the dimensions.

Simply said, test different variations with A/B tests and see what will work the best for you because photos may have a high impact on your business.

#7 Duplicate Content

Google hates duplicate content and when Google hates something it means that you must hate it too.

Amazon is not the only bookstore although it’s the largest one. There are thousands of small bookshops and most of them make the same mistake.

Which one?

Duplicate content.

Lots of online stores copy the book description from the book cover, and as the result, we have thousands of online store with the same duplicate content.

Paulo Coelho Cover

Source: Amazon

Because of this, you can’t differentiate your shop and in simple terms, your content doesn’t add any value.

According to Search Engine Journal, the direct impact of bad content can lead to:

  • Bad or no search rankings
  • Low website traffic
  • Thumbs-down user experience

Next, E-commerce businesses usually have different variations of products. Here’s one example from Zappos.

Zappos Product Variations

What they got is the unique URL for every variation while the content is the same. If you have the same situation, you need to implement canonical URLs.

Zappos Canonical Tag

This way, you’ll tell to Google which URL is the most important, and which URLs, in terms of ranking, Google needs to ignore.

#8 No Reviews

People love to read other experiences but what’s more, reviews might have a strong impact on your conversion rates.

Precisely, the more reviews your product has, the highest conversion rate you’ll have.

Effects of Reviews On Conversion Rates

In other words, there’s a positive correlation between these two variables. However, you need to be careful because negative reviews may hurt your business.

It doesn’t mean that you need to delete negative reviews. No! Don’t delete negative reviews, but keep in mind that your competitors may leave fake reviews.

The following graph will show you why customer reviews are important.

According to BrightLocal, only 13% consumers don’t trust customer reviews as much as personal recommendations.

Do you trust online customer reviews as much as personal recommendations?

This is a huge percentage and reason why you need to implement reviews on your store.

Here’s an example from VWO which shows us conversion rates after Express Watches implemented reviews.

Seiko Reviews

According to the case study, a variation with implemented reviews has increased conversion rates by 58.39%.

Keep in mind that results were statistically significant (99%) which is very important.

#9 Lack of Google Analytics and Google Optimize

I’ve already been writing about poor data analysis as a problem, but that’s was about analyzing transactions.

Here, I want to say that implementing Google Analytics is must have. Personally, I don’t know for a site that hasn’t implemented Google Analytics.

However, implementing the tool isn’t only what you need. The purpose of Google Analytics is not to know how many visitors you have.

The purpose is to find useful insights and make different steps to improve the business.

Here’s a classic example of funnel analysis which tells you in which step you lose customers.

Funnel Analysis

Next, you can implement other apps such as Kissmetrics and MixPanel which actually track users, and not page views (as they say).

Next, Google has released a tool called Google Optimize which enables you to do A/B tests, multivariate analysis, visual editor, and so on.

Google Optimize

Visual Editor feature looks interesting to me because it allows you to create a new variant of a page without needing to recode your site each time. This way, you can easily perform different tests without hiring a developer.

The main reason why is this important is that using these tools will help you to make changes faster because the market is extremely competitive.

Conclusion

I hope that you now understand what mistakes you make.

Personally, if I need to pick the most important reasons why E-commerce businesses fail, I’d pick the following three:

  • Lack of Email Marketing
  • Lack of Content Marketing
  • Bad User Experience

Never forget that email marketing still has the largest ROI and also keep in mind that email marketing is not the past. It is the present and the future.

Also, be patient with content marketing because it takes the time to write hundreds of articles, and until that happen, you won’t see so many benefits from it.

Finally, everything about SEO leads to the user experience. Google wants to provide the best search results for its users so always watch the things from user’s eyes.

Good luck!

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