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"Bwired helps their customers make rapid, substantial improvements to the performance of their organisations by addressing issues in website strategy, technology and design."
Source : Bwired
10 Reasons Why e-Commerce Fails
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"Businesses must align the physical retail experience with the online
experience, taking a strategic approach to e-marketing just as they would
This whitepaper covers ten reasons why e-commerce fails, providing readers
with advice on how to avoid these pitfalls.
1. Lack of Strategic Direction
"Build it and they will come" is not a strategy for e-commerce success. You
wouldn't expect a new store to bring in business without advertising and
promotion, so why would you build a website and expect it to boost business if
nobody knows it exists? E-commerce must be supported with marketing and
advertising if you want to make it part of your business as a true channel.
Search engine optimisation is critical, as is the integration of promotional
materials and marketing campaigns to generate traffic by promoting online and
offline store locations and create synergy through consistency in brand
Just as misguided is the "spray and pray" approach. You can't be everything
to everyone. Your product or service is designed to satisfy the particular needs
of your target segments, and marketing and advertising should reflect that.
Targeted communications are key.
2. Poor User Interface
A user interface that is confusing or hard to navigate will deter customers
and prospects and reduce repeat purchases. Targeted search, simple menu
structures and clearly labelled products are some of the basic ways you can
encourage visitors to purchase. For more tips on how to increase usability and
enhance your customers' online experience click here.
3. Lack of Trust
Trust and credibility with your customers is important both online and
offline. Security issues can deter customers and prospects from ever buying. The
online environment differs from the offline environment in that customers are
required to provide full credit card details in order to purchase. As such,
businesses must provide security against misuse of this information. Use of SSL
(which enables the encryption of sensitive information during online
transactions), known and trusted payment gateways and clearly displayed privacy
policies will increase trust and credibility in the organisation. Make it simple
for customers to see that others have purchased and have had a positive
experience with your company through use of a "clients" or "testimonials" page
where possible. As is common practice offline, businesses can also increase
trust and credibility by providing tracking capability, delivery guarantees and
returns policies, which provide customers with the peace of mind that the
product will arrive within the specified time period, in good condition, and can
be returned if it's not quite right.
4. Payment Gateway Issues
Limited payment options and poor post-transaction communications can prevent
customers and prospects from purchasing. Offline customers are provided with
cash or card alternatives and a receipt for record of purchase. Similarly,
online businesses should provide a wide range of payment options to ensure
customers are capable of purchasing, as well as a "thank you" page with
purchase reference/credit card receipt details to provide assurance that the
transaction has been recorded and documentation is available for personal
5. Poor Technology
Just as a shabby, unkempt retail outlet screams poor quality, outdated
technology also indicates a product/service that is behind the times.
Customer-driven changes in e-commerce technology occur constantly, and online
retailers are expected to keep up. Your customers will turn to your competitors
for products and services if they are more accessible, or provide additional
benefits (eg. product comparison capabilities).
Leading website technology which streamlines distribution, simplifies stock
control and increases overall organisational effectiveness through integration
with CRM databases and accounting systems can increase operational efficiency
and reduce costs. providing players with a competitive advantage over those who
lack such technology.
6. Lack of Transparency
Offline, customers are able to view products and services in great detail,
and can approach a customer service representative with any questions. Online,
information should be just as readily available. Your website should
provide all of the information your customers need to purchase, as well as a
"help" section with frequently asked questions and clearly displayed contact
details should they wish to speak to a customer service representative. Privacy
policies should be visibly displayed and delivery guarantees and returns
policies clearly stated. Encourage visitors to engage with your business by
providing interactive applications such as forums where appropriate.
7. No Personalisation
One size does not fit all. Your website should provide a variety of products,
prices and styles for different customer segments to increase probability of
purchase - just as you would if you were operating offline,. Provide
differentiated pricing and promotions for the various entry/point of sale
sections of your website, (as you would promoting your product/service offline
in various locations) and tailor the online experience as much as possible by
allowing your visitors to tell you in detail what interests them.
8. Failure to Manage Customers
Online, organisations can learn from customer experiences by:
- developing communities around their product or service through social
networking sites and forums,
- surveying or polling visitors, and
- using analytical tools like Google Analytics, coreDNA Statistics or
Omniture to track where visitors are referred from and what interests them
on the site. This data can then be used to refine strategy.
In order to stay top of mind, organisations must reach customers regularly.
Online, organisations should provide the opportunity for visitors to sign up for
newsletters, subscribe to blogs via RSS and undertake personalised direct
marketing campaigns via email to keep customers informed. In addition, your
website should differentiate the product/service offering for various target
segments where possible.
9. No Incentives
It's no secret that promotions boost sales, and often we go online looking
for a bargain (the cost of sale is lower online and visitors frequently expect
prices to reflect this). If your website lacks incentives, or they're difficult
to find, you may be losing business to your competitors. Follow the same
principles you would offline and offer seasonal promotions, sales and
loyalty programs which provide added perks.
10. Poor Product/Service Offering
The online environment is highly competitive and shoppers are becoming more
experienced. If you don't deliver what you promise, or offer poor customer
service, bad news will travel fast (particularly as visitors can post details of
their poor online experience all over the internet almost immediately!). Lastly,
and possibly most importantly, none of this will help if your product or service
isn't up to scratch. Just because you operate online doesn't mean you should
ignore product/service quality.
While there are a number of reasons why a business may not succeed in e-
Commerce, these are the most common, and should be avoided in order to achieve
success in the online retail environment.