There are many ways that ecommerce companies make mistakes. Key ones include a failure to focus on social media, requiring account creation to buy, racing through the images, not centering on your products, and relocating a frequently used site feature.
Ecommerce mistakes of all types first come from myths or misconceptions held by ecommerce professionals. Here are some of the key myths within online retail, and how to correct those false notions for better all-around performance.
Myth: You can make money online simply by setting up shop.
Truth: Actually, you need to find a way to reach customers, not just set up a site – at least if you want your traffic to be finding its way to you through the Internet. An ecommerce site cannot simply be pictures of products with descriptions and prices. There must be substance on the site in the form of content. There should be information that helps people solve their issues and get solid advice.
A key early misconception was that store leases and inventory costs could be completely avoided as this digital revolution proceeded. The idea at that point was that you could simply rent out a bunch of warehouses, put them in carefully selected locations, and then ship via hub-and-spoke (or nationally if desired).
The notion that setting up an online store was enough to succeed in and of itself is problematic because reach is useless “as long as the reach does not translate to visibility, discoverability, and real transactions,” said T.N. Hari.
Myth: The way to win in ecommerce is price.
Truth: Price is certainly a top question people have when they shop for just about anything. However, other elements will be involved when someone is looking at options. “Truth is,” said Tim J. Smith, PhD, “customers don’t buy because of price alone.”
Trying to win on price typically requires substantial buying power that is only available to the largest market players. The way that a new business within ecommerce can succeed is typically in terms of customer service, and that might involve the following:
- Intent and desire to satisfy customers
- Great usability with the shopping cart and website
- Personalized service
- Quick response time to customer requests
- Feedback and rating channels for customers
- Strong presence on Facebook, Twitter, and YouTube, among other social platforms.
Myth: Ecommerce is all about disruption.
Truth: The biggest ecommerce firms are all huge corporations. Startups can make an impact or go after niches, but the behemoths will likely maintain most of the top positions (in order, Amazon, Walmart, Apple, Home Depot, and Best Buy), as indicated by Dennis.
The truth is that most of the huge ecommerce names are Sears, Staples, Lowe’s, and other long-time household-name brands.
Myth: Once you have a concept, scaling ecommerce is simple.
Truth: The incredible scalability of modern technology, when applied to ecommerce settings, can allow you to scale them very efficiently. Of course a brick and mortar business will take longer to build because there is physical construction, local staffing, and various other additional costs.
Ecommerce scaling challenges are real, though. “Much of this can be traced back to the ridiculously high… costs of customer acquisition,” said Dennis, “as well as what often turn out to be expensive and/or complicated issues stemming from the high rate of customer product returns.”
The issue with returns goes back to a core weakness of ecommerce that we all know is unavoidable: you cannot pick up the product, see it, and touch it in person. Additionally, a malicious customer might say that the product arrived, with the ecommerce store not having a system with which they can adequately prove delivery.
Related to customer acquisition, the key way to solve that is to better cover your margins and build in sustainability with retention through differentiation.
Finally, it is expensive and complex to develop a logistics network that is affordable to run.
Myth: The only KPIs you need to focus on are profit and revenue.
Truth: During the early days of the Internet, it was unnecessary for anyone to have to pitch anything to a board because most online shops were single-person endeavors. For that reason, ecommerce professionals were initially known for sometimes pointing to numbers that did not necessarily translate to business concerns. Profit and revenue became more core to the field as justifications for spending once web marketers started joining larger organizations.
Today, revenue and profit are now so much at the forefront that every other possible measurement may be neglected.
There are various other key performance indicators that matter. Asset lifetime value, conversation rate, and channel traffic are top ones recommended by Pratik Dholakiya.
Myth: Email is obsolete.
Truth: Another top pernicious myth is thinking email is no longer a key online tool. Using texting or messaging may help you contact an individual; however, people are less likely to open messages from businesses through that medium. A social post can also not be expected to get to all your customers. For these reasons, Dholakiya noted in 2018 that “email is still the default communication tool for connecting with people over the Internet.”
There is an inbox that must be emptied with email. That means the email accountholder will probably see most of the subject line at minimum.
The truth is that you need to carefully strategize how to build your email list – the opposite of avoidance.
Myth: Third-party security is standardized.
Truth: You undoubtedly get many outside services to fulfill business functions, such as infrastructure (i.e., web hosting, infrastructure-as-a-service, or IaaS if cloud) and software (software-as-a-service, or SaaS, if cloud). These companies are not all created alike – again, think differentiation as noted above.
However, a key concern is these scenarios is security. While security best practices may be generally accepted across the industry, the protocols that are used by a specific provider vs. another will differ.
There is a way to know if the providers you are considering do follow security best practices, and that’s by leveraging the specifications of an additional third party: the American Institute of CPAs (AICPA). The AICPA is known for its Statement on Standards for Attestation Engagement 16 or 18 (the latter a lightly updated version of the former).
By looking for ecommerce systems that are both PCI-compliant and audited to meet the parameters of the nation’s top accounting association, you can know that you are conducting true security due diligence.
Myth: Your hosting speed does not matter.
Another top aspect of a site that can be neglected is the speed of hosting. The servers must be functioning optimally.
Your speed is fundamental. Online users are not known for having very long attention spans – they want to get what they need and move on. Your credibility will suffer if your site does not load rapidly, and your satisfaction will plummet. When your site gets slower, page views, customer churn, and bounce rate will drop along with your revenue. People can simply get to your competitors too quickly.
As page load rises by fractions of a second, so does bounce rate, according to studies.
Now, of course, speed is not just about the servers and network but other aspects. For instance, optimizing your alt-text will help improve your performance site-wide.
Your ecommerce partner
Do you want to build ecommerce smartly and securely? Critical to your site are speed and security of your hosting. At Total Server Solutions, we’re your best choice for comprehensive ecommerce solutions, software, hosting, and service. See our secure ecommerce solutions.