Fear, Uncertainty, Doubt
Ian Lurie May 2 2006
I read an article in the Wall Street Journal yesterday that discussed e-commerce and how it’s now a requirement. Which leaves me wondering: Why do so few retailers do e-commerce right? I have my suspicions. Read on and see why so many online stores fail, and how to avoid their mistakes.
Yet so few businesses I know do a good job of selling online. IKEA has an online store where you can’t actually BUY anything online. You have to wait for a phone call to confirm shipping. Many online stores still require you to ‘create an account’ to complete a purchase. And many other sites just don’t have any store at all.
So what’s keeping folks? I think it’s FUD (fear, uncertainty, doubt). For every story of successful e-commerce, there’s a story of a spectacular failure. Retailers see that and say “See, e-commerce isn’t a reality yet.”
Poppycock. I have clients who sell products of all shapes and sizes online, from salt to bullet proof vests (to the military only, by the way). None of them have gone out of business.
E-commerce initiatives do fail. But they fail for clear, avoidable reasons:
Bad planning. Many retailers launch stores that have little or no online marketing strategy. So their store goes live, they sell nothing, and they fail.
Wimpiness. Sorry, there’s no other way to put it. Retailers let the web developers building their stores bully them into unreasonable compromises. I’ll bet IKEA’s developers said calculating shipping on the fly was impossible. Really? Then how do so many other online stores manage it?
Ego. Retailers also go to the other extreme, forcing features and content into their stores that are just ridiculous. I went shopping for a bicycle component and landed on a site that told me about the CEO’s car. The CEO’s car?! I’m not shopping for a car. I’m shopping for a seat.
Lack of patience. Online sellers seem to expect they’ll achieve a return on investment in record time. Unfortunately, that’s not the case. A successful online store requires time, marketing and patience.
If you have an online store, or are going to launch one soon, follow a few simple pointers and you’ll do better:
Have a backbone. If a developer or designer tells you something is impossible but you think it is, look around the web. Do other sites have the feature you want? OK then. Look in the mirror, tell yourself ‘I am in charge’ and then go ask the development team to please give you an estimate for that feature.
But follow sound advice. If, on the other hand, you’re asking for something and meeting resistance – note that ‘resistance’ is different from someone just saying ‘that is impossible’ – step back for a moment. Does your request make sense for your customers? Or for you? Table your ego.
Have a plan. Approach an online store like you’d approach a brick-and-mortar one. You need to have a month-by-month plan for how you’re going to get customers, how you’ll keep them happy, and what products you’ll introduce when.
Be patient. Count on a one year path to profitability. Don’t count on anything faster. If you do get a faster return, great! If not, you’ve planned for it and can build a sound, healthy online business.
Be flexible. Getting a lot of requests for a product you weren’t going to sell online? Add it! Is another product not selling at all? Drop it! Online sales provide a great source of feedback. Listen and respond.
Did you know Tiffany’s online store brought in $110 million last year? E-commerce can work, for everything from $3 batteries to expensive jewelry. The key is to know what you want, have a plan and stick with it. Do that, and maybe you’ll end up in the Wall Street Journal…
Ian Lurie is CEO and founder of Portent Inc. He's recorded training for Lynda.com, writes regularly for the Portent Blog and has been published on AllThingsD, Forbes.com and TechCrunch. Ian speaks at conferences around the world, including SearchLove, MozCon, SIC and ad:Tech. Follow him on Twitter at portentint.He also just published a book about strategy for services businesses: One Trick Ponies Get Shot, available on Kindle. Read More