tl;dr: e-commerce sites are far more likely to fail than be a success – but you can take steps to turn your website into a winner. In this article I look not only at the top 5 reasons e-commerce stores fail, but how to prevent these failures happening to you.
So, you are thinking of setting up an e-commerce site and already you are dreaming about how you are going spend all that cash as it pours in an endless stream into your bank account.
But, just before you book your seat next to Jeff Bezos on the next available space flight, take a moment to consider this recent statistic that…
90% of e-commerce websites fail in the first 12 months.
It can be tempting to believe the hype that it is easy to make your millions online, particularly with e-commerce, and while this is technically true, sadly, not all e-commerce ventures succeed.
But that is good news for you as a store owner because much of your competition will never get past the first 12 months. Woohoo!
So why do so many e-commerce websites fail?
There are several common reasons why e-commerce websites fail, but many of these can be avoided with the right strategies and approach. In this blog post I’ll be looking at the five main reasons e-commerce websites fail and provide you with some actionable tips on how to prevent them from happening to you and your web store.
Reason One: Poor User Experience
One of the primary reasons e-commerce websites fail is due to a poor user experience. This can include slow loading times, a cluttered or confusing layout, or a lack of mobile optimisation.
When users encounter these issues, they are likely to abandon the website and seek out a competitor with a more user-friendly interface, better information or attractive design.
How to prevent poor user experience
To prevent this from happening to your e-commerce website, firstly have a clear idea of what customers will want to do on your website (this is not necessarily what you want them to do). Customers may want to…
- see the product or service in action
- be able to compare features
- watch videos
- zoom in on product details
- try before they buy
All these are perfectly reasonable to expect and you can use a couple of techniques to ensure you are giving your customers what they want.
Focus Groups – these are where users are allowed to use your website in a controlled environment and asked to explain their thoughts and feelings as they use both your website and competitor sites to achieve the same goal.
User Monitoring – Tools such as TruConversion and HotJar allow you to watch anonymised videos of people using your website. This helps you look for patterns of behaviour that might be causing customers not to proceed to your checkout.
Customer Journey Funnels – Tools such as the aforementioned TruConversion as well as HockeyStack and Google Analytics let you set up ‘funnels’ or a series of steps you think a customer should go through to reach a certain goal such as add a product to the check out. This allows you to see the conversion rates at each stage – this is more helpful sometimes than videos as you can see 1000’s of journeys on a single chart.
Split Testing – there is no end of split testing tools and techniques available on the market today, all with varying degrees of cost and complexity, but they all do pretty much the same thing. They let you run tests on your website such as ‘which button works best’ and let you view the results to make decisions about changes to your website design and content. You can find out more about split testing on websites here.
Speed Testing – Cheap hosting, shared hosting, optimised hosting, badly built websites and out dated plugins all add up to slow down websites – and customers HATE a slow website.
Now the problem is, you probably visit your own website often, so it will be cached on your browser – so while you may think your website is loading fast, the rest of the world is having a very different experience. There are many tools that can run independent reports on the speed of your website – I like Speed Vitals. But, make sure you understand what you are looking at in the reports and where you are running your tests from. I have seen many websites unfairly criticised for speed over the years because the person running the test didn’t know what they were looking at.
For example a quick report on asos.com looks like the site is loading in nearly 10 seconds, but in fact it is ready to be used by a visitor in less than half a second (which is the important thing). They are cleverly offloading non-essential (to the customer) codes, scripts and images for a faster user experience – a process known as speed optimisation.
‘Cough Cough – hint hint…’
If you are lucky enough to be a Really Good Website customer then many of the features listed above are available for you to use on your website (I don’t call them ‘really good websites’ for nothing).
Reason Two: Ineffective Marketing Strategy
This can probably be summarised in three words. Lack of traffic. Traffic being web speak for visitors (but you already knew that).
Here is another shocking statistic for you.
Shopify suggests the average conversion rate for their websites is 1.4% but Shopify also boasts a lot of highly successful websites on their client list, so the mode is probably more likely to be sub 1%.
So for every 100 visitors to your website you ‘might’ get a single sale.
I’ll just let that sink in.
And, to reinforce that bit of maths – recently I was paying £50 PER CLICK on Google Adwords – so if my website was converting at 1%, for every £5,000 spent on advertising, I can expect one lead (not even a sale in my case). But thankfully I was using a landing page I know converts well for a specific type of search.
So where is your website traffic going to come from?
This is a question I ask all e-commerce site customers and a terrifyingly high amount either don’t know, or skirt around the question.
Fail to plan and plan to fail.
If you don’t have a plan to get significant amounts of traffic to your e-commerce site, it will fail. Traffic can come from any number of sources, including…
- Google (and other search engines)
- Social Media Platforms
- Paid Advertising
- Email Marketing
- TV
- Radio
- Affiliate Schemes
Make sure you have multiple sources driving traffic to your website. Social Media platforms are a great tool for finding potential customers, but don’t become fully reliant on any single platform as they can come and go over night (friends reunited anyone?).
Reason Three: Subpar Product Selection or Quality
E-commerce websites can also fail due to a subpar selection of products or poor product quality. If the products offered on the site are not appealing to the target audience or fail to meet their expectations in terms of quality or value, it can lead to low conversion rates.
To prevent this, conduct thorough market research to understand the needs and preferences of your target audience. Curate a selection of products that align with their interests and offer high-quality items that meet or exceed their expectations. Prioritise customer feedback and continuously assess and improve the quality of the products offered on your e-commerce website.
Regular customer surveys are a fantastic way to monitor this, they can be done very easily with email, forms and landing pages and remember, don’t take negative feedback personally – treat it as the gold it is and act on it.
Reason Four: Lack of Trust and Credibility
If I had one piece of advice for ANY online store – invest in your brand over everything else.
As cyber crime becomes more and more prevalent, having a well known brand is one of the few tools you will have in your arsenal to cut through the doubt in a potential customers mind whether to trust their purchase with your website or not.
Trust is essential in the world of e-commerce, and a lack of trust and credibility can be a major factor in the failure of an e-commerce website. This can stem from issues such as poor customer service, a lack of transparent policies, or security concerns related to payment processing.
How to build trust on a small budget?
Reviews – harvest reviews like there is no tomorrow, Google My Business is free to do this, as is Facebook, more costly options are tools like TrustPilot that gives you 50 reviews a month for free, but starts to get expensive (£250 per month at the time of writing) when you decide to go pro.
Re-marketing Campaigns – familiarity is a key component of trust – so ‘following’ site visitors around with your brand after they have visited your website is a cost effective way to build trust and drive traffic back to your website.
PR – ‘Very little happens online until it happens offline first’ is the old adage, but it still remains true today. Getting in the papers, on TV, in magazines – anywhere your potential customer group may be when they don’t have their noses pressed to a screen is a great way to build your brand and trust.
Influencers – love them or hate them, the good ones are worth their weight in gold (and many of them know it), but if they have your audience and you are confident in your products, they can be a great investment and a way to fast-track you on your journey to success.
Brand Tie-ins – Also known as ‘Marketing Judo’ – this is where a lesser brand can gain leverage from a well established brand by ‘doing something together’. There is a great book called Marketing Judo that is well worth a read if this strategy takes your fancy.
Reason Five: Ignoring Analytics and Data
Analytics are such a powerful tool. Use them.
All Really Good Websites come with the Pro version of Independent Analytics built in as it is such a great tool to see what is happening on your website in a ‘GDPR-friendly-no-need-for-a-Degree-in-data-science’ kind-of-a-way.
But data can be found in many other areas such as Search Engine Databases, Google Analytics, Google Search Console, comparison websites, Google Trends (warning – highly addictive) and so much more.
The whole premise of the internet is access to data (and cat videos) so you have no excuse.
What are some key metrics to focus on for e-commerce websites?
Conversion Rates – number of sales (or sign ups) / number of visitors = X% conversion rate.
Bounce Rates – visitors who hit your site and leave immediately – try and cross reference this against traffic sources (where the visitor came from i.e. Facebook or Google Ads) to see where you might be wasting marketing budget or generating the most sales.
ROI – Return On Investment is ‘ROI = (Revenue – Cost of Goods Sold – Advertising Costs) / (Cost of Goods Sold + Advertising Costs)’ – google gives a good example here if maths ain’t your thing.
Landing/Exit Pages – Where are people arriving and leaving on your website? Try and work out if these pages can be improved to increase your conversion rates.
Popular Pages – what pages on your website are getting the most traffic? Can you enhance those pages to increase conversion rates?
Low Hanging Fruit – Use tools like Google Search Console to find web pages that are ranking in or close to the top 3 slots on google and seem to have good volumes of search traffic and invest a bit of time or money on SEO to try and get that traffic to your site.
So you got this far – well done, summary time!
There are a lot of things that can go wrong where e-commerce websites are concerned, some are out of your control but if you focus on the five points listed in this article which are (just in case you skipped straight here – if you did you missed some ‘internet gold’)…
- Make sure your website user experience is tailored to your customers
- Have a realistic, well funded, clearly defined and monitored marketing strategy for your website – preferably utilising multiple marketing channels.
- Don’t try and sell s**t (unless you are in the market for manure then ignore this – but make sure it is good s**t).
- Build trust pretty much at the expense of everything else. Money invested in building your brand is money well spent and the sooner you start to do this, the sooner you are likely to become successful.
- Learn to read the tea-leaves (or whatever your preferred source of data is) – decisions made with data are usually better decisions.
I really hope this article has helped you. I have been building and marketing websites since the 1990’s (that hurt to type) and the information on this page is as a result of years of seeing what does work on websites and, probably more importantly, what definitely doesn’t.
I actually write these articles because I enjoy it (and don’t like crappy TV) but, if you enjoyed it, please share it, especially with anyone you know might be struggling to get their e-commerce dream to materialise.
And yes, I am always open to new projects so please – ask me for a quote or a chat – I don’t bite.
