You’ve launched your online retail business and the money is starting to flow. Everything is roses, right?
Even the most seasoned ecommerce pros run into trouble growing their online retail business. Competition is fierce. Scaling is hard. Sometimes, you even get in your own way.
Here we break down seven of the most frequent online retail mistakes and offer a few suggestions to help you avoid them, get out of your own way, and keep your customers moving in the direction of your checkout rather than towards your competitors as you grow your online business.
7 Major Mistakes Online Retail Business Make Every Day
Think of the ecommerce market as if it’s the Online Retail Business Hunger Games.
The odds for online businesses are not in your favor. Upwards of 90 percent of online businesses fail.
Listen, if you’re making any of these common mistakes right now, it’s OK. You can always course-correct and get back on track. The important thing is to dig in, clearly identify the problem (and its impact on your business), and then make it right.
Let’s dive into the mistakes you could be making and discuss how to eliminate them Hunger Games style so you can get back to growing your online retail business:
1. Ignoring Your Competition
If your launch strategy doesn’t include some sort of competitive analysis, circle back and fix it.
While your approach to your online retail business shouldn’t be reactive, it should be responsive to what’s happening in your market, in real-time. Those competitors are going after the same customers as you, so you should know what’s working for them and how they’re going about their business.
By analyzing the competition at the outset and throughout your business lifecycle, you’ll uncover significant opportunities to grow and improve your online retail company. It really is that simple.
Quick Fix: Set up Google Alerts, RSS feeds, and other automated tools that will let you know when a competitor is making a move you should be aware of. Make sure you’re in the know when they launch a new product, post a blog entry, or target a different keyword.
2. Calculating Costs Improperly
Profit = Demand X [Revenue - Expenses]
Profit is a simple formula.
Yet, somehow, even experienced online retailers forget to account for all of their real costs. Customer acquisition. Marketing. Shipping and handling. If you don’t have a good understanding of those costs, you’ll never find the profits you’re seeking.
While it’s easy to jump on a promising product idea with strong demand, don’t neglect the most essential math when it comes to your business growth. Your costs are often what shape your margins, so keep a close eye on them.
Quick Fix: Make sure you’re tracking any and all expenses. Load them into your cost-benefit analysis and measure on a monthly or quarterly basis. Be sure to capture both fixed costs and variable costs that pop up from time to time (licensing fees, listing expenses, etc.).
3. Lacking Customer Service
That’s how many customers say they’ll never do business with a brand again after a bad customer service experience.
And that doesn’t even account for the “word-of-mouth effect” (making customers twice as likely to discuss negative experiences with others). When it comes to customer service, there’s just no substitute. Your company’s reputation is on the line in a big way.
The quality of your customer service is highly-aligned to the nature of your growth as an ecommerce business. It should be dynamic and connected to the realities your customers face, your strategies for expansion, and your unique products.
Quick Fix: Infuse a customer service mindset across the whole company, rather than making it just one department. Link positive customer service outcomes to incentives for your team and see engagement (along with revenue) increase as a result.
4. Poor Website Design and a Complicated Checkout Process
According to Salesforce, 74 percent of customers will abandon their cart if they find the purchasing process too difficult. That’s a huge opportunity to lose customers before they’ve even made a purchase. Don’t risk it.
The fewer steps, the better. Maintain a simple and straightforward buying process with a clean, visually-pleasing design. If it’s not intuitive for customers, you’re likely to lose them.
At the end, make sure the confirmation page includes all of the relevant details (shipping dates, customer service contact information, etc.) the client might require after their purchase.
Quick Fix: Beta test different versions of the check process before you launch it. Conduct regular audits of the site design to better understand the user experience and enhance it. Measure which designs perform better with customers in terms of completion rates and revenue and build your designs based on that data. For a complete walkthrough, check out our 5-Step Framework for Optimizing Conversions & Revenue.
5. Failing to Nurture Customers Post-Purchase
Just ask the folks at Harvard, there’s a lot of money in e-loyalty.
In a study on ecommerce trends, they found that a customer’s sixth purchase was 40 percent more expensive than their first. Their eighth purchase? 80 percent more expensive than their first. This means there are some serious profits to be gleaned from loyal customers in online retail.
Failing to take advantage of that would be problematic for your business. After a purchase, be sure to follow up with customers and build a relationship with them. Ask for and act on their feedback about all of their purchases—in particular, their first few.
The goal is to keep providing the customer with value, through actual products or the content you share, so they’ll keep coming back rather than look elsewhere.
Quick Fix: Personalize your follow-up where you can here. Be sure you’re capturing customer emails at all times. If a customer’s first purchase was a travel backpack, see if they’ll consider a microfiber travel towel or durable water bottle as a second purchase. Survey them to figure out their needs and purchasing habits, then follow up with suggestions.
6. Lack of Clear Delivery and Payment Options
A customer gets to the end of a purchase and all of a sudden, the item costs $20 more than it did when they first selected it.
No one likes that feeling.
Make sure that delivery costs are clearly explained and labeled where necessary. Give customers a few options to consider so they don’t feel locked into costly shipping terms. Let them decide on matters such as cost and speed when it comes to how their items are delivered.
Roughly half of online customers say they’ll skip checkout if their preferred payment option isn’t available to them. When it comes to payment, be sure to offer a range of choices, including mobile payment options which are significantly growing in popularity.
Quick Fix: Do your customer research to understand which payment options are most popular among your customer segments. Offer those options. Done.
7. No Marketing Strategy, No Unique Voice
Think about Dollar Shave Club and MailChimp.
No one is getting these companies confused with their competitors. Yet both businesses exist in very saturated markets and are still outperforming most of their peers.
This is, in part, because they have crafted a unique brand identity and woven it into a coherent marketing strategy that flows from that special brand voice. They have struck a chord with their customers and made themselves highly memorable in a crowded space.
Keep an upbeat and engaging tone that both entertains and informs customers about your product. Show a little personality to stand out among the many options that customers have, especially in the online retail sector.
Quick Fix: Combine your market research with your team personality and culture to craft that unique brand identity. Don’t be afraid to be edgy. Customers will appreciate the risk you’re taking and remember you for doing so.
Talk openly with your team about how you may have gone down some of these paths before and work together to devise strategies to avoid these money pits.
If you’re too busy to take on strategic projects because you spend the majority of your work day entering product data, we recommend adopting the most affordable, effective, and user-friendly product information management platform on the market—Plytix.
Now that you’ve got a clear schedule and a strong sense of the most frequent mistakes in online retail, take the time to put in place your own plan to avoid them. Your bottom line and your staff will thank you for it.