The Top Reasons Why New eCommerce Fails: Here’s How to Pivot

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woman using her smartphone online for new ecommerce purchases

For every new eCommerce business that launches, there’s a 90 percent chance of failure within the first four months. Although this is a big statement laden with doom and gloom, there are many reasons why these businesses tend to fall flat. Aside from the obvious reasons, like lack of planning, poor product quality and selection, and subpar inventory management there are a number of less obvious reasons why many eCommerce businesses don’t survive. Luckily, many of these factors are actionable, and thus easy to address – so what are they?

Poor Customer Support and Experience

Many new eCommerce businesses get so excited about launching their new venture that they forget the main factor behind any businesses’ success – customers. Without them, businesses don’t have anyone to sell to, and without any customers to sell to, the business won’t make enough capital to progress and grow. There are three main ways I repeatedly notice new eCommerce businesses are neglecting their customers: little-to-no customer support, failure to implement technology that will improve the sales process, and badly designed websites.

The first factor on this list, customer support, should be clear. Without adequate support in both the purchasing and post-purchasing process, customers are less likely to want to use the eCommerce store or service again. The reasoning behind the other two factors is similar – if customers find their experience in the sales process to be time-consuming or complicated, they will be less likely to come back. If a businesses’ website is hard to navigate, glitchy, or has long load times, they’re unlikely to even begin making a purchase.

Marketing, Branding, and Social Media

Launching an eCommerce business is no simple feat, and newcomers have a lot to learn. Another area I repeatedly see new businesses fall flat in is marketing – specifically, a lack of consideration around marketing. Many have overly simplistic marketing practices, subscribing to the ‘build it and they will come’ train of thought. Many don’t consider creating a strategy at all. Others who do consider marketing will often focus on the wrong areas, producing overly-niche, obscure products without many buyers, or promoting their business to markets who are unlikely to convert. Even the most simple and affordable tools are often forgotten, such as social media, which can be used to connect with customers via the channels they use every day and to build a community – all of which can be make or break for eCommerce businesses.

Failure to Compete

The final area where new eCommerce businesses often fail is in how competitive they are. Business is cut-throat, and unless a brand has patented their product, it’s likely another player will emerge selling the exact same thing. Similarly, if a bigger brand notices a small business behind an increasingly popular product, they will likely begin selling something similar at a lower price point. These bigger players also have the resources to market these similar products more effectively, drowning out the smaller players in terms of search visibility, advertising, and branding. Unfortunately, this failure to compete spells the end for many newer eCommerce businesses.

The Pivot

Although these factors might make the idea of launching or continuing on with an eCommerce business feel pointless, the good news is they are actionable and thus preventable. Start by focusing on the core business aspect – customers. Browse your eCommerce site as though you are a critical customer and take note of any issues throughout the process. Then, talk to your customers and ask what they thought of the process, as well as areas for improvement. From there, you have a starting point of where to make improvements. Thankfully, there are many platforms that are both easy-to-use and affordable to overhaul both the sales process, as well as to create a beautiful website that functions seamlessly without having to hire a specialist.

In terms of marketing, branding, and social media, it’s important to remember that the struggles you’re experiencing with your eCommerce business are likely not new. In fact, there’s probably hundreds, if not thousands, of businesses who have had the exact same experience as yours, and they likely tried many solutions before going out of business. Find what didn’t work for them, understand their variables, and then possible solutions should appear. Essentially, what you’re doing here is finding new solutions to old problems.

An ideal first step in overhauling social media is in building a community. Find ways to connect with your ideal customers through available mediums and be creative. If your eCommerce business is about cosmetics, for example, you can start creating informative or entertaining content around beauty. One method that Trader Joe’s found particularly useful in community building was starting a podcast to give a behind the scenes look at their operation – tying in the history and origins of certain foods to create an entertaining and informative narrative. Their podcast has earned independent success separate from the chain, and has enabled them to expand their online community and brand presence.

Last Thought

Finally, in terms of competitiveness, there’s a simple thing fledgling eCommerce businesses can do and that is to research the market. Find niche areas where big players haven’t laid foundations yet and capitalize on them. Through doing this, businesses can identify areas where they can capture the market without needing to be competitive. Over time, and as your eCommerce business gets to a stable point, you can focus resources in expanding product scope, and differentiating your brand and product to become a bigger, more competitive player yourself.

Although there’s no magic recipe for success in any business and eCommerce is increasingly tough to thrive in, there are a number of actions fledgling eCommerce businesses can take to increase their longevity. Through focusing on customers and the experience they have with your site, building community, marketing to the right group of prospective customers and continuously innovating and differentiating a brand and product line, any eCommerce businesses can maximize their chances of long-term success.

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