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8 reasons for “Why do Online Shops Fail?” (Solutions included)

July 4, 2022

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Table of Contents

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1. Poor marketing plan

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2. Bad website design

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3. Shipping, exchange and return problem

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4. Lack of call for action

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5. Not convincing product photos and description

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6. Not differentiating your store

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7. Not doing localization in terms of currency and language

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8. Not understanding your customers from data

In recent years, more and more people are setting up their own shops online, however, most online shops fail. Let’s take a look at some common reasons for online shops to fail and how you can avoid them. 
Photo from Unsplash

In recent years, online shops have become a trend. To sellers, it is easier and cheaper to set up when compared to a physical store. As for customers, products in online shops are usually cheaper and it is more convenient to shop online. In addition, lockdowns due to COVID-19 have boosted the growth of online shops. As a result, more and more people are setting up their own shops online, however, most online shops fail. Let’s take a look at some common reasons for online shops to fail and how you can avoid them. 

1. Poor marketing plan

Owning an online shop is not just building a website and people will come and purchase from you. You need to promote your store with different marketing strategies for people to learn about your shop.
Photo from Unsplash

Owning an online shop is not just building a website and people will come and purchase from you. You need to promote your store with different marketing strategies for people to learn about your shop. To plan your marketing strategies, you will first need to know who your target customers are. Then think of what platforms they are likely to use, it can be social media like Facebook, Instagram, Tik Tok or even other online media such as community groups, forums and so on. You should also consider what visual or influencer is likely to attract them. Based on the information, you can start to plan out where you will be placing your ads, which influencer you will work with, and is there any discount that can encourage your target customers to shop. 

You can also try to use apps from Shopify App Store to help you do Search Engine Optimization(SEO). Since most transactions start with a Google search, doing SEO can increase the ranking of your product in the search results and make it easier for people to find your product. 

Once you have generated a customer base, then it’s time for you to think about marketing strategies that can help you retain your customers. One way to do so is to use email marketing to reach out to your past customers and attract them to shop by reminding them of upcoming events or notifying them about your new product. Another way is to start a membership or loyalty program, reward your customers when they spend. Then, whenever they need to do their purchase again, they will come to you before they come to your competitor. 

Photo from Shopify

2. Bad website design

Website design will directly affect customers’ impressions and experience and there are a few common mistakes in the web design process. 

First of all, incoherence and messy design. When customers click in and find the store messy, they will perceive the store as not credible. They are likely to be discouraged to shop since the shop’s lazy design makes it feel like a scam. Therefore, you should use the same color scheme and font for every page to make the whole thing look more coherent. If you are using a theme when you are designing a store, don’t forget to do customization. Otherwise, your store may easily overlap with other stores using the same template and seems unprofessional. 

Another thing to pay attention to is mobile design. According to Oberlo, in 2021, about 72% of e-commerce orders were made using mobile phones. However, as most of the time, people are designing their store on desktop, it is common to see people overlook how the site will be displayed on mobile phones. In order not to miss out on such a huge business opportunity, you have to make your site mobile-friendly. Make sure that the layout and visuals are not misshapen. You can preview how your site will look on mobile and modify the design on Shopify before launching it. 

Make your site mobile-friendly to capture sales from mobile users.
Photo from Unsplash

When designing your store, you will also want to organize your product to make it easier for customers to find what they want so that there will be a higher average order value. Shopify allows you to organize your products into collections. You can divide your products into collections and put some of the best-selling or new collections on the home page, allowing customers to know what your store is selling with a glance. This can help to return customers too as they can have a better user experience and know what is new to the shop since the last time they purchased, and thus encourage them to try the new product. 

To learn more design tips, you can read another article: 5 Tips On Web Design when Building Your Online Store.

3. Shipping, exchange and return problems

Shipping is another important part of doing online business because it is how your customers get their product, therefore clear shipping and return policy is fundamental. You can add a policy page on your site for customers. But even with a clear policy, high shipping costs and poor shipping experiences such as long waiting times or broken packages will affect a customer’s shopping experience. 

To make the customers feel like they are paying for a lower shipping cost, you can adjust the price to cover the shipping cost and then provide free shipping to your customers. If your product is $35 and the shipping fee is $10, then they will feel like they paid an extra $10 for nothing and thus are less likely to checkout. 

However, if you set the price to $45 and offer free shipping, they may feel like they are enjoying a discount and thus increase their likelihood of checking out. You can also set a free shipping amount, like free shipping for spending $500 or above. This will increase the customer’s willingness to shop as well as the average order value. As for the poor shipping experience problem, there is not much you can do because you are not the one sending the order to your customer. So the solution is to find logistic companies that are fast and reliable. Or, you can install apps that allow your customers to choose their desired logistic company to fulfill their orders.

Long shipping time and broken packages will make a customer not return to your store.
Photo from Unsplash

If you want to serve more customers, you can try to provide more delivery options. Such as cash-on-delivery, smart lockers, pick-up in convenience stores or oil stations. Customers prefer different delivery options. Therefore providing more shipping options means more people’s shipping requirement is fulfilled and makes them more likely to purchase from you. 

4. Lack of call for action

Some store owners may find that even though the traffic to the store is high, the conversion rate is still low, which means not many people are checking out. One of the reasons is that there is no call for action on the website and the customers do not feel the need for immediate purchase. 

To solve this problem, you can try to create an urge for customers to checkout, and give them a reason to buy today. It can be a Father’s Day promotion that ends today or letting the customers there are only a few units left in stock. To further increase the effectiveness of such measures, try placing announcement bars, pop-ups, or banners in eye-catching positions and remind customers to check out their limited offers. 

Another way to encourage customers to act is to ask them to sign up for a newsletter by providing them with a discount code. With such subscriptions, you can inform them about the latest promotion of your store through email and encourage them to purchase. To create the urge, you can set a unique discount code for each customer so that each of them will have their own expiration date and have to spend before the code expires. 

Shopify also allow you to send cart abandonment emails. You can make use of this function to ask customers to check out again if they accidentally quit the checkout page. 

Sometimes, customers may encounter difficulties while shopping and seek help from live chat. It can also be Instagram direct message, Facebook Messaging or WhatsApp as long as people can reach you. Providing a communication channel on your site can not only help increase the customer engagement rate, it is also a good place to call for action. But this is only effective when you are responding to your customers quickly. You cannot expect people will wait for three days for your reply and still buy from you, right? 

5. Not convincing product photos and description

Unlike shopping offline, customers cannot see the product visually. The only thing they can rely on is your descriptions and visuals. So if your information is not detailed and the customers are not certain about what they are going to get, they usually purchase elsewhere. Even worse, if your information is misleading, they are not going to return and may even share their unhappy experience with people around them. To avoid this, you need to provide as many details as possible and a channel for them to clear their doubt, like a Live Chat. 

Moreover, poor quality images turn people away from your store. No one wants to see blurred, out-of-focus pictures or images with an unpleasant background. Therefore,  make sure the pictures you use should be clear and consistent in size on all devices and should include a video of the product if possible. If you are doing dropshipping, don’t just use the picture provided by the supplier. Buying the product and using your own image can help you stand out from other shops that are selling the same product and make it more attractive to customers.  

6. Not differentiating your store

You have to differentiate yourself in order to convince your customers to buy from you but not your competitor.
Photo from Unsplash

Many other stores are selling similar products to you. You have to give a reason for people to buy from you but not your competitors, otherwise, you are just losing sales. Just now we mentioned differentiating by making your own picture. But there is so much more you can do to differentiate yourself from your competitors. 

Most of the online stores have an About Us page, but not everyone includes their story, making some of the stores less convincing. Studies have shown that customers are more willing to buy from a store that shares the same value with them. Therefore, you should put more effort when you are telling the story behind your brand on the website. If your story is attractive, your customers will remember you and feel connected with you. 

Web design is also another way to stand out. On top of the coherent and organized design we mentioned earlier, you can use a unique color pattern, pictures, and logos to create a memorable design. By doing so, you can leave a strong impression on your customers, and thus they may think of your store first when they want to do online shopping. 

Good customer service can also help an online store to stand out. Quick and friendly responses can also help leave a good impression of your store. This can also increase their chances of return since they had a pleasant experience in your store. 

7. Not doing localization in terms of currency and language

When a business becomes stable, many merchants will start thinking about expanding their business overseas, but sometimes the journey can be tough because they are not doing localization. Without localization, it will be inconvenient for customers from other countries to shop since they do not understand the content of the website and the currency they have to pay in is not their usual currency. 

If you know where you will be expanding your business, then you should add the native language there to your page. So for example, if you are doing business with Japanese customers, then you should include Japanese on your site. If you do not know where your potential customers are from, then at least include English on your site, since it is the most universal language in the world. You can install apps from the Shopify app store to help you do the translation with a few clicks.

To make it convenient for your customers, you can also set it to accept different currencies, so that your customers can pay with their native currency. Shopify Payment plus Shopify Markets already provide you an option to enable that.

8. Not understanding your customers from data

Using the data generated by your store can help you optimize the performance of your site.
Photo from Unsplash

One of the common mistakes made by e-commerce beginners is that they apply the mindset of running an offline store into their online store. We always talk about ”location, location and location”. Location is the key of sales revenue. When operating an offline store, the handiest data is how much sales the store brings, but when it comes to the digital world, website tracking provides you with much more than that. It’s so powerful that you can’t ignore or you will be falling behind in the vigorous ecommerce battle, therefore you should be collecting customers’ behavioral data. 

Through Shopify, you can get a lot of data from your customers. But many people fail to understand the data and make appropriate changes and many potential incomes have gone to waste. 

Shopify has its own analyzing tools and can integrate with external tools like Google Analytics or Facebook Pixel. These analyzing tools can provide you with many numbers like conversion rate, online store by location, top landing page, and more. With these numbers in hand, you can know their customer journey, from where they know your page, to how they make their decision of purchasing. Then you can improve your site according to the data to generate more sales. For example, you can modify your site and do A/B testing to find out which modification performs better and thus optimize your site. You can also measure the success of your email marketing by the open rate, click rate, and conversion rate to see how many transactions are actually from your email. 

Conclusion

Hopefully, if you are thinking of starting a store, you will know what traps to avoid after reading this article. Or if you are looking for advice on how to improve your store, this article can give you some inspiration. And lastly, if you are looking for Shopify consultation service, feel free to contact us.

Written by Aiman Lam

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