June 10, 2020

E-Commerce accounted for some 15% of retail sales worldwide up until March 1, 2020. It is understood to have grown a further 15% between March 01, 2020, and April 30, 2020. What is more, forecasters believe this recent growth will be sustained and built on over the next 12 to 24 months – with total sales rising to 50% of all retail by 2030.

It is relatively easy and reasonably cheap to set up an e-commerce website, or online shop. It is quite another thing to make such a site profitable. That is why up to 90% of e-commerce start-ups fail in the first 12 months, it is also why 36% of those that remain to fail in the second 12 months and 44% fail in the third 12 months. The bottom line is – not many succeed. But why not?

Reasons For E-Commerce Sites Not Operating Profitably:

1. The site does not rank on Google

35% of shopping starts with a search on Google, so if you don’t rank your website through SEO – you don’t get the sales.

2. A Lack of Patience

It takes time to establish a successful e-commerce site. Indeed, Amazon lost money for 12 years.

3. Expensive shipping leading to cart abandonment

23% of customers now expect free delivery and that expectation will only grow. Only 70% of customers are prepared to pay $5.00 for delivery.

4. The website is not seen to be secure

84% of consumers will not make a purchase if they feel the site is not secure – even if it is secure. Perception is everything.

5. Poor website layout

38% of consumers will leave a site that they find unattractive or hard to use. Online shopping is all about convenience.

6. The website takes too long to load

39% of consumers stop engaging with a website if it takes more than 2 seconds to load – and will also stop engaging if images take time to load.

7. The site is not mobile-friendly

Some 60% of people now research on a mobile device and more than 35% of purchases are now made using a mobile device – and again this is growing.

8. Inconvenient returns policy

An inconvenient returns policy will deter up to 80% of shoppers. Once again, online shopping is all about convenience.

9. Poor product presentation

Products must be presented well and video is increasingly an expectation of online shoppers – increasing conversion rates by as much as 144%.

10. Poor customer satisfaction

The reality is 95% of consumers share a bad experience with an e-commerce platform with at least one person and 54% share with 5 people. Bad news travels fast.

Features of highly effective e-commerce sites:

1. They address all of the issues listed above

The issues listed above represent common failings for new players and no such issues will be found in a highly successful site.

2. Monitoring critical metrics and fine-tuning the site as required

Critical metrics include visitor traffic, visitor conversion rates, subscriber engagement rates, cart abandonment rates and the average value of a transaction.

3. Customer focused and user friendly

Some 75% of customers highlight ease of use as a critical issue in their choice of which website to use repeatedly to shop. The customer determines how easy a site is to use.

4. High quality, high-resolution photography and video

Not only is it important to use images, video, and animation, but it is important that they are of a high quality – increasing visibility and credibility.

5. User-generated reviews

We live in the age of social media95% of consumers read reviews before making a significant purchase and 57% of consumers now expect a 4-star rating or better.

6. Special offers

Savage discounting is not as important as many retailers think. That said competitive pricing and added value are very powerful tools.

7. A wish list function

In addition to being able to make a purchase, it is important that consumers can place products on a wish list for a later purchase. It brings them back to the site.

8. Immediate delivery

The faster the delivery the better. Same-day deliveries are becoming more common, especially in big cities. More than 5 days – or unspecified delivery times are not on.

9. Availability

The range is a key driver of online purchasing. If the product sort is not on the site or not available – consumers will go to a site where it is available or buy something else.

10. Marketing related products

Promoting related products in the lead up to or after a sale, if done well not only increases the average sale but is viewed by the customer as a service.

These are just some of the documented features of a successful e-commerce site.

To finish I thought I might list the features of an e-commerce site that ensure I will never buy from it or the brand. They include:

  • Being forced to open an account or a purchase being made more difficult without an account. I don’t want an account and will not have one forced on me.
  • Going onto a mailing list and receiving junk mail that I cannot easily unsubscribe from. Going on the list is fine – but if I don’t want it I must be able to easily unsubscribe.
  • Failure to put all costs including delivery costs upfront. If costs appear for the first time at the cart stage, I abandon the cart and never go back.
  • Any lack of availability of products on the site. If products are on the site, they must be available and in the advertised sizes, etc.
  • Constant popups. One popup is fine but more than that and I am out of there. This is an example of ignoring the customer’s needs.
  • Any site that is hard to use or less than intuitive. Online shopping needs to be convenient and easy. I do not want to work to make a purchase. There are always other options.
  • Restrictions of movement reflecting a strategy that tries to force me through the site is a way that suits the business and not me.

I will not use or go back to any e-commerce or indeed, a website that is not customer-focused – and not should I or indeed anyone else.

It is not enough to be online. Your e-commerce presence has to be first-class if it is to work well in a highly competitive market.

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