Top 5 Reasons Why E-commerce Stores Fail


At Frasca Digital, we manage E-commerce stores every day. To put it simply, what we have seen is that measuring the right metric(s) is always the key driver to E-commerce success. However, metrics alone do not determine the success or failure of an online store.

In this article, we’ll dive into what we feel are some of the primary reasons why E-commerce stores fail before they even get off the ground.

1.) Store Owners Don’t Monitor Metrics

We get it – it’s extremely difficult to run an entire business and have enough time to slow down and analyze things. But, without measuring, a store owner cannot grow.

Monitoring E-commerce metrics can be tricky at times. You might have an idea of how your “key” indicators are performing, but you’re also juggling many other concerns like customer service and improving usability on web pages.

What should we do if our KPIs start sinking lower than anticipated or worse yet dip below expectation levels? The answer for this question lies in understanding where these issues stem from before making any changes.

I’ve compiled a list of all the essential metrics I monitor when it comes to our E-commerce stores. Although there are many more, these essential metrics will give you an idea about how well your business is doing and if any updates need to be made in order for sales numbers or customer satisfaction rates to improve as needed.

Diving right into the summary:

  1. Conversion Rate
  2. Cost per Click (CPC)
  3. Cost per Conversion (CPA)
  4. Average Order Value
  5. Average Click Through Rate
  6. Bounce Rates
  7. E-commerce Website Traffic Sources
  8. Unique Visitor Count
  9. Customer Lifetime Value (CLV)
  10. Assisted Organic conversions
  11. Number of Non branded keywords
  12. Fluctuations in keyword rankings
  13. Number of page impressions
  14. Core web Vitals
  15. Indexation Status
  16. Search Analytics
  17. Return on investment (ROI)
  18. Number of keyword searches in Google AdWords
  19. Product Engagement

2.) There’s no Plan

The number 1 reason for E-commerce failure among newer sellers is not the inability to read reports and react. For most, it is the lack of a clear plan to start with. The lack of a clear understanding of purpose, their audience and being unable to remove their personal opinions from decision making.

After 12 years and working with dozens of businesses and sellers of all sizes, a huge problem that I come across all of the time is sellers who hyper-focus on reports and numbers yet they are clueless about driving traffic, who their ideal buyer actually is, and how to motivate the sale or increase their conversion rates.

You probably can answer these questions but we ask sellers this on a regular basis and most can not:

  1. Describe your ideal buyer?
  2. What leads them to need a product like yours in the first place?
  3. What issue or emotion are they trying to fulfill/resolve?
  4. Why should they buy from you instead of the next guy?
  5. What makes you stand out from all of the competitors and how do you ensure buyers know it before they spend?
  6. Why would someone purchase from you a second time?
  7. How far down your homepage do you convey the exact message from the last question?
  8. Is that message on most of the other pages on-site?
  9. Name one thing that each of your top 3 competitors do better than you?
  10. Where does your ideal buyer congregate on the web?
  11. Name 3 influences that your target audience worships?
  12. How have you collaborated with each?

3.) Not Understanding or Appreciating UX

A flood of SEO website traffic can cover up bad design, and your metrics can be used to flesh out those errors. Look at all of the new sellers from last year that did incredibly well, but this year cannot come close to reproducing those same sales.

That is usually because last year it could have been a fortunate time and place for luck, especially since COVID-19 sky-rocketed E-commerce sales in 2020.

Not understanding how to build relationships and not have a dialed-in site made it all one-and-done traffic.

Understanding how to tweak the page, message and layout can add tremendous value to your users, who are looking forward to becoming customers!

4.) Poor Customer Service

This is one of the biggest killers to any online store’s success because retention has everything to do with customer service.

We all learned in Business 101 that acquiring a customer can cost 5x as much as retaining one, so why get skinny on treating your customers right?

5.) They Didn’t Hire Frasca Digital (Duh!)

Ok, this one goes without saying. If you don’t work with Frasca Digital to help your e-commerce website grow, then it may not grow at all!

Contact us today for more information on how we can help your e-commerce store avoid failure!

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