7 Common eCommerce mistakes, and how to avoid them

Updated: Sep 5

When entering the online selling sector, we must strive to learn from industry veterans and the experiences of other entrepreneurs. The eCommerce industry is highly competitive and even the smallest mistakes can result in massive failures. For a brand considering direct-to-consumer sales, it helps to know what works and what doesn’t, and how to make the most of budgets while also growing steadily.

In this article, we discuss the top seven mistakes that brands make in the eCommerce industry, and how to avoid them. 1. Treating Everyone As A Customer

When delving into eCommerce, considering the barriers to entry are fairly lower than in traditional retail, it is tempting to count everyone as your customer. Since the internet opens you to virtually every consumer in the market, it is a common mistake to not estimate your total addressable market, which is the actual number of people in the market at any given time who would be interested in your product.

Once you identify your TAM, the next step is to clearly state your value proposition. What makes you different from other online retailers? Why should this difference matter to your consumers?

Brands that identify their value and focus on a target audience that would be attracted to such value often see better results in the long run. Without a defined audience, one would often end up trying to sell to everyone, only to affect sales and stunt growth due to flawed feedback, irrelevant insights, and unrealistic expectations. Moreover, since the targeting isn’t precise, the Customer Acquisition Cost would also be very high.

2. Ignoring Data

Data is one of the most important assets for any brand in the eCommerce industry, helping to understand performance, make projections, and plan for growth. And one of the worst steps to take when in the eCommerce industry is to ignore data. The power of numbers delivers several metrics that help you gauge if you are taking the right strategic decisions or not. For example, even the most common metric such as inventory churn rate can tell you whether you are stocking up too much or too little of your products. Today, with vast swathes of data available to tap into and solutions like the Growth Platform to help make sense of this data, your brand has every opportunity possible for intelligent growth.

3. Scaling Too Early

Scaling is vital for any business, not only to support growth objectives but also to sustain in a competitive landscape. However, it is critical to understand when and how to scale a brand. Timing is of key importance when taking your brand to the next level, and if done poorly, can yield catastrophic results.

One of the biggest mistakes in D2C eCommerce is to scale too early before the basics are in place in terms of strategy, reserves, and a viable customer base with reasonable sales projections. When is your brand ready for greater scale? Usually, once the product-market fit has been tested and thoroughly vetted. In the eCommerce context, this means that you have a customer base that buys and enjoys your product, and would recommend you in a flash to their networks. Several eCommerce brands build loyalty programs early on for this very reason - to understand whether their products have enough resonance with their market to make business sense. 4. Not Considering Other Sales Channels

Customers are everywhere today, and no eCommerce brand can afford to miss out on visibility just because they aren’t available on a certain platform. A unified commerce approach is one where your brand meets the customer where they are, and in ways that they want. Usually, several D2C brands shy away from listing on marketplaces because of the high commission fees involved. However, as more and more people use marketplaces as a discovery channel and not just a purchase channel, it is important that your brand be showcased front and center when they search for items in your category. When listing on marketplaces, one common issue is not being able to track how many orders come from which channel. You can easily resolve this by tracking your orders in real-time using a solution like the Shoptimize Growth Platform. 5. Lack Of Inventory Forecasting When selling online, it is important to stay prepared well in advance. Usually, retail brands run the risk of either stocking up too much, or too little. Of the two, stocking up two much is the problem that often creeps up on you, kills working capital, and causes the business to underperform.

Inventory forecasting is one way to prevent this from happening. When you use data and insights from brands in your industry to plan for your own growth, the result will usually show up in your favour. Holding up working capital in the form of dead stock can be prevented effectively if you know how much you can expect to sell during any given time period. 6. Not Focusing On User Experience

When selling online, one of the most important factors that influence customers’ purchase decisions is user experience. Since eCommerce does not work through brick and mortar stores, it becomes difficult for customers to get a feel of the product they intend to purchase before they buy it. Therefore, the user’s experience while shopping online becomes critical.

Your brand must give due importance to the user interface, communication, and product descriptions on the website. When your online store is easy to navigate and offers a simple approach to making online purchases, more visitors are likely to convert to customers. Providing all the information that a customer needs in a simple yet aesthetic manner will help boost conversion as well as retention. 7. Lack Of Prescriptive Analytics

Everything from consumer preferences, to internal flaws, and competitive advantages can be identified through data analysis. However, without the proper tools at hand, brands often find themselves in trouble with making informed decisions.

For example, data is just numbers on a spreadsheet without the ability to read these numbers correctly. Within the analytics framework, Prescriptive Analytics diagnoses a problem, suggests corrective action, and helps us gauge the success of these measures.

Shoptimize offers a next-generation recommendations engine that delivers Prescriptive Analytics and insights to not just identify problem areas, but also to remedy these in an effective manner. The engine analyses data from multiple sources such as demographics, channels, trends, user actions, and more, interprets this data and provides recommendations to help you make key decisions on marketing, strategy, and sales.

Several eCommerce brands enter the industry every year and fall out of it, most commonly due to the smallest of mistakes that could easily be avoided with some research. Since the industry is beginning to mature now, it is important to note that several brands have already made certain mistakes in the past, and taking lessons from them is a great way to improve your odds of success.