Ecommerce has become the lifeblood of many businesses, while ecommerce mistakes have resulted in the failures of several others. Two retailers show the contrast — Amazon on the success side and Sears on the mistake side. While many companies will have a blend of ecommerce and traditional storefronts, many analysts have cited Sears’ failure to invest sufficiently in its ecommerce business — it was an early adopter, but didn’t fully develop online capabilities — as the reason for its bankruptcy.
Below, in no particular order, are five reasons experts cite for ecommerce failures:
1. Lack of Back-Office Integration
The integration can be costly and timely, said Peter Sheldon, senior director of strategy at Magento, an Adobe company. “Brands can’t afford expensive and risky ‘rip and replace’ legacy system replacement projects. As a result, it’s common to see online retailers try to ‘bolt on’ shiny new technologies and expect this to create a seamless customer experience.
But bolting-on doesn’t work, Sheldon said. “Instead, businesses must adapt their strategies to align to their own initiatives as customers evolve and change, and they can only do that if they have a commerce platform that allows for open innovation. The platform must provide the flexibility they need, whether that’s bringing new products to market, offering new business models or adapting to the way customers want to buy.”
2. Lack of Segmentation/Marketing
"Businesses tend to apply in-store segmentation to ecommerce scenarios — which doesn’t work,” said Sachin Kumar, senior director of customer and partner success, Europe at Riversand. “Ecommerce shopping patterns have been fast evolving. Customers browse across sites, check reviews on Amazon, ask for recommendations on social before making a purchase. Segmentation profiling needs to combine customer-value as well as customer-needs characteristics to be able to understand each segment’s shopping missions.”
As a result, as much as 80 percent of ecommerce marketing spending is wasted as companies struggle to figure out how to best reach and nurture their customers, and ultimately create repeat buying patterns, Kumar added. “Investing in strong marketing attribution and marketing mix optimization technology, analytics and processes is key to figuring out how to best optimize your investments across paid, earned media and digital campaigns by seasons."
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3. Thinking if You Build it, They Will Come
“This is really a failure amongst the longer-tail ecommerce brands,” said Apu Gupta, CEO of Curalate. “Companies like Shopify and BigCommerce have dramatically reduced the cost of launching an ecommerce site. Sourcing products to sell on these sites has also gotten cheaper. This has lulled many people into a belief that if they just set up an online shop, people will show up. That won’t happen.”
Ecommerce companies need to focus on customer acquisition, Gupta said. He recommended establishing a social presence, developing and publishing content and investing in paid media on social channels to take advantage of their targeting capabilities.
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Companies are increasingly using “lightweight content carousels that contain Instagram imagery,” according to Gupta. “The problem: when you click on any of these images you’re immediately transported off the ecommerce site to Instagram — a site that’s definitely not begging for more traffic. These brands have worked so hard to get someone to show up only to encourage them to leave. It’s one thing to have a 'follow us' call out, but it’s another thing entirely to make a beautiful, click-worthy, image drive a potential buyer into a rabbit hole of distractions.”
The fix is simple, Gupta added, recommending that companies start incorporating shoppable content widgets which turn this content into something a person can explore on the site.
5. A Poor Search Experience
“Many ecommerce sites are packed with information but can be difficult to navigate — requiring an engaging search experience,” said Kerry Liu, CEO of Rubikloud. “To create a better customer experience, and increase sales, ecommerce retailers need to prioritize search as their sites become more complex. In our experience, 33 percent of all ecommerce sessions use the search function, and almost 66 percent of those search sessions result in a purchase. By using machine learning to identify distinct search behavior trends for each product category, ecommerce retailers can further optimize site searches and improve conversion rates.”