Retailers have taken the online space by storm. The eCommerce market will be worth a staggering USD 16,215.6 billion by 2027. Everyone wants a piece of that cake, but it’s not easy to come by.
It’s easy to make mistakes when retailers switch to online stores. The dynamics of brick-and-mortar retail are very different from the dynamics of running an online store. Everything from branding strategies to customer acquisition strategies is different online. No wonder 90% of eCommerce stores fail within 120 days of launch.
A fool-proof strategy is essential for a successful eCommerce venture. You won’t get very far if you rely on guesswork and trial and error. Today we’ll go through the key mistakes that retailers make with online stores. We’ll cover areas like branding, marketing, customer journey, and much more.
6 Common Mistakes Retailers Make With Online Stores
Let’s get into the common mistakes that retailers make with their online stores. Some of you may be making these mistakes, and some are on the verge of doing so. But it’s never too late to change your approach and do the right things.
1. Miscalculating Costs
It’s easy to miscalculate costs in an online business. You may forget to take into account the myriad expenses that are associated with running a digital store. There are way too many areas where you can misjudge the actual cost of things, be it the website development cost or shipping cost.
Once you miscalculate expenses, it creates a ripple effect. For example, if you misjudge shipping costs, you have to end up bearing losses. Alternatively, you have to increase the price of the items – which would damage your brand awareness. So it becomes a two-edged sword where your business is getting hurt in either case.
It’s difficult to manage costs, but there are some effective strategies you can follow:
- Automate every aspect of accounting. With less human interference in the accounting process, the chances of errors also go down.
- Use dynamic pricing to sell in-demand products at a higher price. At the same time, it also means selling low-demand products at a low price. Dynamic pricing is the only way to take advantage of the market forces and maximize profits.
- Review expenses periodically. Look at areas where you can cut costs without compromising on the quality of products or services.
It may not be easy to accurately identify the price of everything, but it’s not impossible either. Using automation is one of the most straightforward approaches to more accurate accounting. Nonetheless, there’s no alternative to being diligent with your accounts and thoroughly reviewing expenses.
2. Overspending On Marketing
Marketing is among the most significant expenses for businesses. You should ideally not spend more than 10% of your gross income on marketing. But for D2C retailers, that percentage is often much higher.
This is not the right thing to do for a retailer that’s short on cash. Establishing your operations is crucial. You can invest heavily in marketing only after you do that.
But that doesn’t mean marketing is unimportant. Marketing campaigns are the most important drivers of success for online stores. The challenge is to find a balance. You do not want to overspend on marketing, but you can’t overlook it either.
The best approach is to find marketing channels that give you the best cost per lead. If you spend too much money on acquiring customers, you will have too little money left to scale your business.
To sum up, there are two mistakes that retailers must avoid:
- Using expensive marketing channels
- Spending a large percentage of the profits on marketing
When you incorporate print marketing, social media marketing, and content marketing in your campaigns, you can choose to spend less money on paid ads.
You can use a content marketing strategy for organic lead generation. It’s a long-term endeavor, but significantly cheaper than paid advertising. Social media marketing is also a low-cost marketing channel. When you leave out expensive channels like influencer marketing and video ads, you can save a lot of money.
3. eCommerce Marketing Strategies That Level Up Your Sales
When you offer a product that costs $10 in the retail market for $5, many people will buy it from you. But unless you’re using some ingenious method to obtain the product at low wholesale prices, you’re inevitably running into losses.
Many online retailers try to play the price game to get customers onboard. They justify the losses as customer acquisition costs. They make the mistake of recognizing that it’s just the prices that are driving the customers. Playing the price game does more harm than good to your brand image.
Instead of playing the price game, what you need is a long-term and sustainable strategy. To learn more about eCommerce marketing strategies, you need to understand that a long-term strategy, unlike a short-term strategy, is designed for sustainable growth. You can use it to model steady and incremental growth. Chasing exponential growth almost always comes at a cost.
4. Not Using Buyer Personas
Buyer personas are essential for retailers. However, unless your business is in a niche sector, there’s no way of knowing what your customers look and think like. Buyer personas tell you what your customer wants from the market and the problems they face every day.
Not using buyer personas is much like aiming at the dark. Without knowing who your customers are and what their pain points look like, your marketing cannot be effective.
There are several apps and tools that help you create buyer personas. But you can do market research yourself to understand the type of customers you want to draw.
Market research and buyer personas are closely related. The latter is the result of the former. Unfortunately, many online retailers also make the mistake of not conducting market research. Without market research, you do not have any data on your competitors, customers, and distractors. Make sure you do thorough market research, preferably before investing in any new campaign.
Some of the most common strategies to create buyer personas include surveys and questionnaires. But you can also use secondary data from think tanks and market researchers to understand your customers.
5. Not Focusing On Product Descriptions
Product descriptions should reduce the friction between the buyer and the final transaction. But sometimes, it ends up doing the opposite. For example, if you look for a product and read a sloppy product description, you immediately become less likely to buy it.
Product descriptions are easy to master. You need crisp, to-the-point descriptions of products. These descriptions should include its best features and directions to use. That’s all – you do not need flowery words or exaggerations. Overdoing product descriptions can be counterproductive.
It’s very common to assume that product descriptions are text-only. Video product descriptions, however, are always more effective. While it may not be possible to use video descriptions for every product, you should do it when you can. In addition, having video descriptions reduces confusion and friction between the buyer and the decision to purchase.
You should follow the same principles when creating video descriptions – avoid fluff and exaggeration. The message should be concise and descriptive. You do not need the best videography skills to make compelling product descriptions. All you need is the ability to create crisp and to-the-point videos.
Evaluate your product descriptions to see where you can improve. This is a simple fix that many online retailers overlook.
6. Dysfunctional Payment Gateways
It’s not enough to have a single payment gateway in your online store in 2022. Buyers use all sorts of payment methods. Some use credit cards, others use wallets, and some want the amount to be deducted straight from their checking accounts.
Your aim should be to make it easy for more people to shop at your store. There’s no way to do that without having sufficient payment gateways.
While having as many payment gateways as possible is beneficial, never go for shady payment processors. The last thing you want is your store’s name attached to an online scam network. It’s the easiest way to kill a business.
Virtual coins and even cryptocurrencies are now increasingly used in eCommerce. Adding support for these unconventional payment methods also gives you an edge over your competitors. It positively impacts your brand awareness as well.
Another aspect of payment gateways is ensuring a safe shopping experience for your customers. You can work with third-party online security providers or use plug-ins to secure your website.
Payment gateways are among the most critical aspects of online stores. Make sure you have your payment gateways in place before anything else.
We hope this guide helps you fix the mistakes you may be making with your online store. There’s immense potential in the eCommerce space for retailers.
All you need to do is come up with a great strategy and follow it. These tips will make it easier for you to create a full-proof plan for success with your online store.