5 Seemingly-Innocent Mistakes that Cripple Ecommerce Businesses

The ecommerce landscape is booming, and according to research by eMarketer retail ecommerce sales worldwide will be worth $4.058 trillion by 2020. Unfortunately, many ecommerce businesses struggle to achieve profitability, and this is often due to making easily-avoidable mistakes.

Based on information from several reliable studies and research, here are five seemingly-innocent mistakes that can cripple an ecommerce business:

Mistake 1: Taking a Singular Approach to User Follow Up and Targeting

Ecommerce giant Amazon has many tricks up its sleeves, but the one it has found to be most effective is properly targeting and following up with its users.

Amazon’s targeting and recommendation system is so effective that it’s responsible for a whopping 35 percent of Amazon sales.

Between ensuring rigorous and targeted follow up (like sending one user 9 targeted emails within two weeks of browsing an item on its site) and ensuring that users are being shown offers based on their interests when they are on their site, Amazon’s targeting and recommendation system is so effective that it’s responsible for a whopping 35 percent of Amazon sales. Considering the fact that Amazon is responsible for half of all U.S. retail sales growth, that is no small feat.

What Amazon gets right that most struggling ecommerce businesses get wrong is the art of targeting: whether it is on-site targeting or off-site targeting (using a medium like email), targeting users more effectively will give you a significant boost in ROI and conversions. A MarketingSherpa study found that you can increase revenue from email by up to 205 percent by properly targeting users instead of sending the same promotions to all users.

Mistake 2: Not Having a Cart Abandonment Strategy

It’s easy to obsess over getting traffic and improving user experience while abandoning where the real action happens: in the user’s shopping cart.

According to research from the Baymard Institute, the average shopping cart abandonment rate is 69.23 percent. For most ecommerce businesses, the cart abandonment rate is much higher than that. In fact, the Baymard study found that it can be up to 80.30 percent.

If you don’t have a cart abandonment strategy, it is time to prepare one.

Unfortunately, most ecommerce businesses do not have a cart abandonment strategy and as a result struggle to be profitable. If you don’t have a cart abandonment strategy, it is time to prepare one.

Here are some ideas:

  • Eliminate the hidden costs. According to the Baymard study, the number one reason most people abandon their ecommerce shopping carts is due to high extra costs. These costs can come in form of shipping, tax or some other costs. Regardless of the reason, when people are surprised by extra costs, cart abandonment goes up. By reducing or completely eliminating hidden/extra costs you can reduce your cart abandonment rate.

  • Be up-front about costs. People are also likely to abandon carts if they don’t know how much an order is going to cost them. Don’t make them go through hoops. Be clear about what they have to pay.

  • Fix your website errors. Another major reason why people abandon their shopping carts is due to website errors and crashes. Fix these first. If your website keeps crashing, users are less likely to trust you with their credit card information or that you will actually fulfil their order.

Mistake 3: Having a Complicated Checkout Process

It can be tough deciding which is more important between having user information or closing the sale — this is why many ecommerce businesses try to get users to register first before allowing them to check out. Unfortunately, this often backfires.

Reducing the number of forms from 15 to 10 increased conversions by 120 percent, and increasing conversions from 15 to four increased conversions by 160 percent.

Research shows that 28 percent of people will abandon their shopping carts due to a complicated checkout process. A study by Formstack found that reducing the number of forms from 15 to 10 increased conversions by 120 percent, and increasing conversions from 15 to four increased conversions by 160 percent.

In essence, you can't have your cake and eat it too. By interrupting people and insisting they give all of their details before they check out you won’t get both the sales and their details.

Here are some tips to address this:

  • Simplify the checkout process. Avoid asking for unnecessary information, especially before checkout.

  • Don’t compel people to give you all of their information before they can check out. You can gradually collect any necessary information over time.

  • Incentivize people to give you additional information. A discount or coupon as a reward for giving you additional information will not only motivate them to give the information you need but it will also increase their loyalty to your brand.

Mistake 4: Violating the Principle of Choice

Sometimes, less is more. This was demonstrated by the famous jam study conducted by Sheena Iyengar and Mark Lepper. In the study, Iyengar and Lepper observed the behavior of 754 shoppers in an upscale supermarket. These shoppers were split into two categories: the first category was exposed to a table displaying 24 varieties of gourmet jam while the second category was exposed to a table displaying just six varieties of jam.

To the experimenters’ surprise, while the table with more options attracted more attention (60 percent of people stopped to take a look compared to 40 percent with the table with fewer options), the table with fewer options resulted in 10 times the conversions of the table with more options.

While we generally tend to want more choice, we are unable to deal with it.

Psychologist Barry Schwartz explained this conundrum in his book The Paradox of Choice. While we generally tend to want more choice, we are unable to deal with it. Presenting people with too many options won’t increase their chances of deciding. It will paralyze their ability to decide, cost you sales, and negatively impact your business. Of course, it’s easy to be overwhelmed with so many business ideas and concepts available, but embracing the less in more principle is better.

Here are some ideas:

  • When people are on a product page, ensure that they are able to focus on the product they are interested in. Avoid distracting them with more options.

  • When you really have to present people with options, more isn’t necessarily better. As indicated by the jam study, giving people six options will yield far better conversions than giving them 24.

  • Of course, there’s the need to sell related items. This can more effectively be achieved by using cross-sells and upsells in a way that does not interfere with the conversion process.

Mistake 5: Not Integrating Trust Signals

Most people won’t transact with your ecommerce business if they don’t trust you. According to the Baymard study earlier referenced, 19 percent of people will abandon their shopping carts because they don’t trust an ecommerce business.

19 percent of people will abandon their shopping carts because they don’t trust an ecommerce business.

By integrating trust signals, however, you can significantly increase the chances of people doing business with you.

According to a study by Econsultancy/Toluna, the best ways to get people to trust your ecommerce business include:

  • By using trust seals and trust marks indicating that a site has been certified secure and free of viruses and malware.

  • By ensuring your website looks professional and well-designed.

  • By having clear contact details — including address and phone number — on your website.

  • By ensuring that your site loads fast and isn’t buggy.

While it's easy to make mistakes in the ecommerce world, it's also easy to avoid them. By following these tips, your store should be profitable and in the clear.

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