Ecommerce can be a double-edged sword. Rewards are plentiful but pitfalls are many – with ecommerce bringing about a specific set of challenges that ‘bricks and mortar’ businesses don’t face.
How companies can manage risk when trading online
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Alan Linton, a Scottish Enterprise specialist in information and communications technology, examines five of the most common problems facing ecommerce businesses and offers a range of practical solutions to help you overcome them.
1. Low visitor numbers
This means one of two things: either people don’t know you exist, or they simply can’t find you. Using search engine optimisation (SEO) properly, you can tackle both of these issues.
You’ll need good content – not a site stuffed with keywords. Think about what people will be searching for to lead them to your site – it’s all about understanding the customer mindset.
Consider paid advertising
It’s a proven method for getting people to your site. Google Adwords, for example, can be particularly effective for targeting a niche market. Google can be expensive for advertising (the more popular the keyword, the more it costs) but less in-demand keywords are cheaper, making it ideal for niche products or markets.
Equally, even those selling a mainstream product will be able to find niche terms which can be used. You might only get 100 customers using niche search words, but they'll be the right 100 and more likely to buy.
Social media
From Facebook to Twitter and Instagram, social media is an invaluable referrer of traffic to your site. To make the most of this, you must get into the mindset of your customer and tailor your content. Think about the customers you’re targeting – and where they’re likely to be. For example, Pinterest has an 80% female audience – so can be ideal for targeting brides planning their wedding.
It's more than promotion – it’s about engaging in a conversation with your customers. We advised one self-catering accommodation owner in Crail to use social media to talk about the town’s food and arts festivals instead of directly about their own business. Potential customers searching for festival accommodation would naturally find their business by searching for the festival.
Scottish haggis brand Macsweens uses social media to “extol haggis as a versatile ingredient, for all seasons, occasions & places”. They’re talking about food with foodies, not just haggis on Burns Night.
Retweets are free advertising, and only interesting things get retweeted. You need to define your audience, understand how to talk to them and think about which platform is best to reach them.
2. Low conversion rates
Are your customers browsing but not buying?
Google Analytics can help. Free, widely used and with a huge amount of available intelligence on how people travel through your site – it helps you determine what your problems are so you can begin to apply solutions. You need to understand why customers are leaving the site – and why they leave it when they do.
Are people leaving your homepage as soon as they arrive? Finding what they expect to find? Maybe your product descriptions don't quite hit the mark. Is the layout jarring or confusing?
It can be very hard, as the business owner, to be objective and put yourself in the shoes of a person who doesn’t know the product like you do. It can be very hard, as the business owner, to be objective and put yourself in the shoes of a person who doesn’t know the product like you do. If you’re too close to the product, it can be hard to describe it objectively – but failure to do so is asking someone to buy what you sell on a leap of faith. And that’s a big ask.
A clear, preferably free, returns policy will also help to encourage a purchase. It’s a small gamble for the retailer – but it’s unlikely to be used too much if you’ve been clear about the product description. A clear, preferably free, returns policy will also help to encourage a purchase. It’s a small gamble for the retailer – but it’s unlikely to be used too much if you’ve been clear about the product description. You must make sure that the customer isn’t left with questions. There’s nothing stopping them from walking away when they’re online – so you have to eliminate people’s reasons not to buy.
Anything that gives the customer pause to think is a reason for them to walk (or click) away. If a customer has to think, that's the point at which you will lose them.
However, a FAQ section is not the way to answer their questions. That’s actually indicative of bad site design and product descriptions. If a question is frequently asked, it should have been answered within the content of the site.
3. Cart abandonment
Often, customers can go through the process but leave before its completion. Often, this is to do with the check-out process, which could be confusing, unclear or seemingly untrustworthy.
Also, if customers have to register before making a purchase – this can be another hurdle in the process. Time-consuming and invasive, this step can disuade many shoppers. You wouldn’t be asked to give these details when purchasing from a high street shop – so why should you when shopping online? Think carefully about which details you actually need from customers beyond the shipping and billing info - if any.
Undeclared shipping costs can be another barrier. Being confronted with unexpected shipping costs at the purchase stage annoys customers and can cause them to walk away.
To consumers, it can feel underhand. To the customer, the item cost and shipping cost are not separate – they have to pay all of it.
Technical issues at payment stage are also likely to make the customer abandon the purchase – these undermine trust and make the customer worry that they have already paid but won't receive their goods, have paid for them twice, or that their card details have disappeared into the ether.
4. Cost and how to cut it
There’s a perception that ecommerce is expensive. Whilst it can be, it doesn’t have to be.
With lots of psychology around ecommerce, it’s important that ecommerce companies are aware of the concept of ‘best practice’ and apply it to site design. Global companies like Amazon spend a fortune on tailored sites, but the cost of a design agency can be a barrier to smaller businesses.
Sites like Shopify and Big Commerce offer hosted solutions, where you pay a relatively small monthly fee for an ‘off the shelf’ ecommerce site. Designed along best practice lines, this fully realised site will handle everything from customer reviews to imagery and security.
Wordpress, the popular ‘open source’ content management system, also has an e-commerce plug-in called WooCommerce, which gives you a fully-functioning commerce site. There are also third-party sites like Etsy, Not on the High Street, Amazon and eBay that allow users to set up shops with design and functionality features already in place.
Lacking the fine-tuning you can apply to your own site, these aren’t right for everyone. But they are a fraction of the cost, and you’re getting the in-build trust of these already trusted third party sites. For very small businesses or those just starting out – they could be a desirable option.
5. Trust and how to build it
Trust is a major issue in ecommerce. It’s an essential component in every part of the transaction - from honest product descriptions through to secure checkout procedures. For consumers, trust is an absolute priority. You must convince them – so they don’t buy from already-trusted large retailers like Amazon.
With campaigns encouraging consumers to support local, independent businesses – there’s a definite shift in spending.There is an undeniable fact – consumers trust the giants. They know the product will arrive and will match the product description.
To offer any form of competition, you must describe your products and returns policy accurately. The full journey of your site must provide the buyer with full confidence in you.
Third-party validation is another very useful way to do this. You could post customer reviews on your site (making sure not to omit the two and three-star ones, as consumers value honesty), or use a third-party review site, like Trip Advisor, Feefo, Trust Pilot, Google Reviews or Yell.com to do so. People respond well to these as they trust the opinions of other consumers.
Scottish Enterprise and how we can help
If you’re looking to expand your business through domestic or international sales – or you need practical support to get started, we can offer a range of services to help.
Why not attend one of our free ecommerce workshops, run at a range of venues throughout Scotland.
Ecommerce events