Avoiding the Pitfalls of Ecommerce

AVOIDING E PITFALLS OF PUNG INGT ECOMMERCE The U.S BUREAU OF LABOR STATISTICS reports about 60% of start-ups survive up to 3 years, but only about 35% will survive through their 10th year. START-UPS SURVIVE 60% 3 YEARS START-UPS SURVIVE 35% 10 YEARS 10 20 30 40 50 60 70 THE SMALL BUSINESS ADMINISTRATION REPORTS: NEW BUSINESS SURVIVAL RATES: 30% new businesses survive 10 years -70% 51% new businesses survive 2 years new businesses survive 5 years Failure is even harder on small business entrepreneurs than on those invested with venture capital, who make high-risk investments and expect some to fail. 95% Of start-ups fail to see the projected return INTERNET BUSINESS FAILURE RATE MAY BE EVEN HIGHER Some rates are as high as 90% failure rate for new internet businesses, possibly as quickly as the first 120 days. New internet businesses failure 90% 10 20 30 40 50 60 70 80 90 100 30-40% FAIL ENTIRELY - ABOUT 3 IN 4 VENTURE-BACKED START-UPS FAIL INVESTORS LOSING MONEY NEWE-COMMERCE BUSINESSES PROMISE POTENTIAL $ 43 BILLION is spent in online shopping every quarter The eCommerce industry e-Commerce grew is projected to grow 10.4% 8.8% from 2007 to 2012 annually through 2017 BUY $ 334.3 BILLION is expected to be spent online in the U.S. by the end of 2017 Expected to reach 206,000 eCommerce related jobs in 2017 (compared to a little over 184,000 in 2012) The number of eCommerce businesses is expected to increase from 52,969 FHAN 61,000 TO MORE over the next five years WHY ECOMMERCE BUSINESSES FAIL ? UNDERESTIMATING THE “BUSINESS" PART OF "INTERNET BUSINESS" Many people who would never consider starting a traditional brick-and-mortar business create = CHEAP online businesses because they believe the internet makes the process easier or cheaper. For some, this misconception can lead to failures when it comes to effectively launching and running their newly created ecommerce business. LACK OF BUSINESS PLAN/DIRECTION PLANS Similar to failures in business in general, a lack of a strong business plan is often a downfall in eCommerce as well. POOR MARKETING Failing to understand the importance of internet marketing can also negatively impact a new eCommerce business. If creating an eCommerce site in addition to a storefront, some businesses merely take business from themselves - customers looking for them already – and don't market or truly grow their online presence. A lack of a cohesive marketing strategy is also problematic - businesses need to ensure all marketing channel CНЕCK MY NEW WEBSITE wwW.NEWEBSITE.COM initiatives are working together, not against each other. POOR SITE DESIGN/BAD USER INTERFACE In one study, eCommerce sites had a 45% task failure AUTO DESTRUCTION rate 00:10 meaning visitors can't find what they're looking for and seek the information from other businesses. Websites that are difficult or confusing to navigate, take too long to load, and so on, encourage customers to shop elsewhere. POOR CUSTOMER SERVICE Zappos Zappos is a prime example of an eCommerce business with excellent customer service as a top priority and making more $1 billion in annual sales. Ocom o. 57% of customers listed having a product guarantee or warranty as a priority. Spell out your policy on returns and exchanges; having your terms and conditions displayed in-line within the shopping cart will cut down on customer confusion and allow you to fix any issue before they get frustrated. Customers still yearn for being catered to and poor customer service will not help. In the land of social media and easy records of events, poor service or bad behavior can spread like wildfire and be found by customers searching for your site long after the poor service happened. Online, great customer service also blends with excellent customer engagement through email, social media, open feedback, blogs, etc. PAYMENT ISSUES Limited payment options hinder an eCommerce site straight out of the gate. Poor transaction communications can prevent a sale (e.g. bad navigation), stopa customer mid-sale (e.g. not mentioning a product is out of stock until they attempt to check out), or ensure they don't return (e.g. no thank you or purchase confirmation). LACK OF TRUST 76.5% of visitors cited "looking credible and trustworthy" as the 2nd biggest influence on their purchasing decisions when visiting an eCommerce site. TOP PRIORITY 66% of customers in a recent study marked "payment security checks" as a priority when shopping online. Often tied in with payment issues, it is mandatory to build trust and credibility with customers. Security issues can include misuse of personal information, lack of encryption, information leaks, lack of clearly stated privacy policies, or lack of trusted payment gateways. Spell out your terms of purchase clearly, in-line, within the checkout: customers (as well as the Consumer Financial Protection Bureau) consider it deceptive to use pop-ups, redirects, or check boxes to display terms and conditions. la Using electronic signatures is a great way to build consumer confidence, as it reminds them of the traditional card-present, brick-and-mortar experience. TIPS FOR A SUCCESSFUL E-COMMERCE SITE OVERALL DESIGN Navigation needs to be easy and obvious. Show customers where in the site structure they are - headers, breadcrumbs, etc. Mobile optimization or responsive designs are critical considering over 57% of visitors to eCommerce sites are visiting using a mobile device. Site performance and speed is key - site speed factors into Google rankings and every 100ms load time leads to 1% decrease in sales. FINDING & SORTING INFORMATION Include a targeted search with easy to find search bar. Allow for advanced searching - refining options, price, retailers, etc. Use simple menus. Enable users to sort products by popular criteria ("Price - low to high," "Price - high to low," "Best Selling." "User Rating" and so on). PRODUCTS Pictures - Don't include so many as to clutter the page, but pictures need to be large, allowing detail to be seen. Customers are relying solely on these pictures to make purchases. Make sure products are clearly labeled with appropriately detailed descriptions and options (sizing, colors) listed. List if a product is in stock well before a user attempts to checkout and offer to order it for them or notify them when it is back in stock. Include customer-generated product reviews to promote products and build customer trust. BUY CHECKOUT Offer a variety of payment options from trusted, encrypted sources. Allow users to see prices on different delivery options. Implement a robust fraud screening service within your eCommerce shopping cart to protect both yourself and your customers from fraud and identity theft. Don't require users to enter unnecessary information. Keep all information clearly labeled and inform customers what is required. Services that use pop-ups or redirects to confirm customer authenticity are proven to cause shopping cart abandonment. Providing a receipt outlined with product details, terms, refund policy, and purchase confirmation reduces payment disputes and cybershoplifting. MARKETING Your well-designed site will mean nothing if costumers never find it. Google represents 80% of all search traffic and most users don't Goo0ogle venture past the first 10 results and the top 3 being critical. An understanding of internet marketing as well as the ability to keep up to speed in continually new strategies is absolutely essential. Businesses need to collect and analyze data, maximize search engine optimization, and improve conversion rate optimization. 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