5 Reasons Why E-commerce Stores Fail
With the introduction of Shopify, starting your own home business has never been easier. Shopify provides the ideal platform for small, creative and wonderful stores to flourish online. With no need to mess around with coding or any complicated payment systems, it has never been easier to create the online store of your dreams.
As with any new business venture, we encounter some problems along the way; here is a list of five of the most common reasons e-commerce stores fail to make an impact online and more importantly, how to avoid them.
Never Launching Your Store
Seems silly that this is is even on the list but time and time again you see on forums, in Facebook groups and even hear friends talking about creating the perfect store and how they are going to make it big, but it never gets off the ground. Despite best intentions, people forget about how much work is involved to get ready for the big launch day.
Even though Shopify does a lot of heavy lifting for us, there’s still a lot to do: set up the shop, get logos created, create a fan page, source products, create adverts, take amazing product photos, background images and so forth. Amazingly, it’s the small things such as what colours to use, which theme is the best and other factors that can always be changed later that hold people back.
Keep thinking about the big picture and stay motivated and disciplined enough to see it through. Don’t get disheartened that things aren’t perfect, you can’t quite get the product description just right or your logo isn't what you imagined, these really are little things that you shouldn’t worry about. Just get the basics sorted and worry about the details later. Imperfect action beats perfect inaction. Launch and drive visitors to the store first, then worry about the finer things later.
Not Having A Proper Advert Strategy
A random product with a random advert and hoping that it works. Madness. It’s all too common to see stores with this random approach to advertising, purely because they don’t have a proven advertising strategy to follow.
I see people being put off with spending money on advertising, but it doesn’t have to be confusing or expensive. Facebook adverts are wonderful if you can use them properly. You can target the perfect buyer; their age, gender, location, interests, online purchasing behaviour and anything else about them.
Here’s a simple three step strategy to use when creating adverts:
- Use Page Post Engagement (PPE) Adverts To Test Products And Targeting
PPE adverts are there to prove concepts and see if things are working before moving onto more expensive advert objectives. You can quickly see if the audience targeting and your chosen product is a good match. Run these for $5 a day for a couple of days to see if you’re onto something good.
- Run Website Conversion (WC) Adverts - Add To Cart (ATC)
The next step, especially for new stores is to start running ATC adverts for a few days to help teach our Facebook Pixel (you must have this installed) about our ideal customer. Again, run these are $5 a day for 4-5 days and scale / switch off as necessary.
- Run Website Conversion (WC) Adverts - Purchase
The final step in our strategy is to run adverts with purchase as our objective. The pixel should have enough data to be optimised from running out ATC adverts for a few days, so from this point on, FaceBook is doing a lot of the hard work for us. Again, run these at $5 a day for 4-5 days. How to tell winning from losing adverts is illustrated in the next reason.
One last quick tip; let’s say we have a product aimed at cat owners. Under audience interests, if we just used the term “Cats”, we would have floods of people engaging with our advert and costing us money (lots of people love cats!), but have relatively few people clicking on the advert as it’s such as broad term. Try to break things down so only cat owners who actually buy items for cats would see the advert. In this case, add different brands of cat food to the interests list or anything else you can think of that would help make the distinction between these two audiences.
Let Losing Adverts Run Too Long
As a famous gambler once said, “I hope to break even this week. I need the money.” Far too many shop owners let their losing adverts run much longer than they should, wasting too much money before realising what’s wrong. Let’s keep it simple, if you're not getting a return on your investment (ROI), stop spending money!
Facebook provides a wealth of advert feedback for us. Here’s a great way to quickly see if we have a winning combination:
Test with a budget of $5/day for 4-5 days. It takes a couple of days for Facebook to settle down and optimise the advert for us, so after 4-5 days, check the data and look for CPM (The cost for 1000 impressions of our advert) under Delivery in Facebook Ads Manager. If the CPM is between $5-8 or you are making a profit, stick with it or scale it up. If the CPM is higher than $5-8 after 4-5 days, switch off the advert as it’s not performing well. Scaling the advert simple means increasing the daily budget to improve the advert’s audience size.
That being said, here are all of the possible scenarios from advert to purchase and what to look for:
- No Advert Engagement + No Clicks To Store
With no likes, shares or comments on our posts, this is usually caused by bad targeting. Go back to the Detailed Targeting section of advert creation to change the demographics and interests you had previously chosen.
- Advert Engagement + No Clicks To Store
When people engage with and love the message in your advert, this means the targeting is great. All that is needed is a stronger push to click on the product; a more convincing ad copy, a stronger call to action or perhaps a new product is needed.
- Advert Engagement + Clicks To Store + No Add To Cart
People are clicking on our advert and you store is getting traffic. This means we have great targeting and the product interests them enough to come and visit. With no add to carts, usually trust or price is the problem. Try adding some trust badges, a better theme, a more professional logo or lowering the price incrementally until you see improvement.
- Advert Engagement + Clicks To Store + Abandoned Cart
When everything is going well but they jump ship after adding items to the cart, shipping costs are usually to blame. Lowering shipping costs and adding an abandon cart app to send them emails to recapture their interest will help a lot.
- Advert Engagement + Clicks To Store + Sales
Not much to say here except that you have a winner! Scale it up and reap the benefits.
Bad Customer Service
Jeff Bezos sums things up nicely, “If you make customers unhappy in the physical world, they might each tell six friends. If you make customers unhappy on the internet, they can each tell 6,000.”
Things happen. Refund requests, broken items on delivery, lost items in the mail, wrong color, whatever the reason, it’s part of running a business. Top tips are to make everything as transparent as possible with the customer and communicate, they just want a little help and guidance. Give them tracking numbers, be clear on your shipping times and refund policy and give them a clear method of contacting you. Happy customers will buy from you again and again.
Sadly, there are the not so honest customers who cause problems. Despite indicating a low risk, sometimes people are out there to purposefully wreak havoc. I thoroughly recommend the Signifyd app which will stop chargebacks caused by fraudsters. At the worst case you could have your funds withheld or even a stop on your PayPal and Stripe accounts with too many issues, so Signifyd is a great way to help combat these people.
Lack Of Email Marketing
One great reason to use Shopify as a platform is that any visitors who purchase from you are your customers and you are given their email address.
Email is somehow becoming forgotten as a marketing channel, but it’s still one of the most effective methods out there. Also, it’s free. You’ve given Facebook your hard earned cash for website leads, so let’s make the most of it.
Far too many shop owners neglect building an email list, however it’s where the real money is made. Customers who have previously bought from you are the most likely people to buy from you again and again. Send a weekly newsletter to your customers with new products, deals or fun articles you have written. Keep them engaged and you will easily 2x or 3x your store’s sales.
Remember to keep building your list, it really is the most important part of the formula for long term growth.
I hope these five points will help you answer some of the problems when running an e-commerce store and have given you some ideas as to where to improve. Keep testing, building your email list and giving great customer care. Don’t let the small things hold you back; just launch. Who knows, you may scale to be as big as Amazon one day!