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MarketingSignals

Poor marketing to blame for eCommerce business failures

The majority of eCommerce startups are set to fail within their first 120 days of operation, with marketing deficiencies among the most common causes, new research has revealed.

A survey of 1,253 owners of failed startups in the UK, carried out by Marketingsignals.com, revealed the top ten reasons why e-commerce start-up businesses are failing.

According to sources (including Forbes and Huff Post), 90% of e-commerce startup businesses end in failure within the first 120 days. The Marketingsignals research found that the two main reasons for failure are poor online marketing performance coupled with an overall lack of search engine visibility.

Of those companies who were surveyed, a staggering 37% said that their failure could be attributed to an inability to compete or deliver online marketing, with 35% saying a lack of online visibility was the main factor.

Further research found that the same proportion of respondents (35%) felt failure was down to them being too small to compete or there being no market for their products/services, whilst 32% reported that it was due to them running out of cash.

Completing the top five reasons for failure were price and costing issues, with 29% of failed startup owners claiming this was the reason why they folded.

When further quizzed on the reasons why their online startup business failed, 23% said that it was due to being outcompeted, whilst 19% blamed retail giants such as Amazon for dominating a large share of the consumer online retail market.

16% felt that their business collapsed due to their lack of customer service, whilst 14% felt it was due to the poor team they’d built around themselves.

Completing the top ten reasons why e-commerce startups fail was product mistiming, with 11% of startup owners claiming that the reason why their business failed was due to ‘right product, wrong time’.

Gareth Hoyle, managing director at Marketingsignals, said: “It’s clear to see that having an online presence and being visible on search engines is a key area e-commerce startups need to focus on to ensure they succeed.

“As nine in ten online startups fail within their first 120 days of businesses, it’s incredibly important that business owners put provisions firmly in place well before launching – this must include a bulletproof search visibility and online marketing strategy, as well as ensuring there is a market for their product offering.

“A targeted, strategic approach to digital marketing is vital to the success of any online business in this day and age, only more so for small businesses who are just starting out. Many tools can be used to increase their brand awareness and search visibility in their first few days and weeks, where consumer trust and loyalty hasn’t yet been established.”

The top ten reasons why e-commerce startups end in failure:

  1. Poor online marketing – 37%
  1. Lack of online search visibility – 35%
  1. Little to no market for their products or services – 35%
  1. Running out of cash – 32%
  1. Price and costing issues – 29%
  1. Got outcompeted – 23%
  1. Retail giants dominating a large share of the market – 19%
  1. Lack customer service – 16%
  1. Poor team around them – 14%
  1. Product mistiming – 11%

Image by StockSnap from Pixabay

Retailers failing at simple eCommerce best practice

Online retailers could be making more in revenues if they applied simple measures, such as appropriate product imagery.

That’s according to research carried out on 1,213 UK adults by agency MarketingSignals, which found a staggering 61 percent of those polled were put off purchasing from a website by insufficient or poor product imagery, followed by 57 percent that found product descriptions inadequate.

The survey also found that more than half (52 percent) of these businesses are failing potential customers with their lack of customer service, while 47 percent have overly intrusive discount pop ups on the home page, which can potentially detract users from making a purchase.

43 percent of those polled were put off by websites that has an over complicated checkout process, while 41 percent would be deterred by an e-commerce business which has little or no social media presence.

A third (34 percent) of those questioned said that a lack of delivery options would deter them from from making an online purchase, whilst a website that wasn’t optimised for mobile devices would put off 27 percent of respondents.

16 percent said they’d be put off from making a purchase if they couldn’t see company information or an ‘about us’ page. Completing the top ten reasons which deter users from making a purchase was customers who prefer to use alternative payment methods, with over one in ten (11 percent) saying that they’d seek to make their purchase elsewhere if a website did not accept the PayPal or Apple Pay.

Gareth Hoyle, managing director at marketingsignals.com, said: “It’s clear from the research that many potential customers are being put off from making a purchase from websites they are not familiar with, which makes it so much more important for e-commerce businesses to make the checkout process as simple as possible in order for them to complete their transaction smoothly.

“In this social media age, it’s perhaps unsurprising that 41 percent of Brits would be put off from making a purchase from a website that is unfamiliar to them and doesn’t have a visible social media presence.

“Internet savvy consumers are always keen to spot a bargain, though can be put off by over complicated or seemingly untrustworthy websites when attempting to make a purchase, instead opting to buy from a site they already know and trust. So what this research demonstrates is that it’s clear that there are simple steps e-commerce businesses can take in order to improve conversion rates from first time visitors to their site.”

The top ten reasons that deter customers from making an e-commerce purchase:

  1. Insufficient or poor quality product imagery – 61 percent
  2. Inadequate product descriptions – 57 percent
  3. Lack of customer service – 52 percent
  4. Distracting/Intrusive pop ups – 47 percent
  5. Over complicated check-out process – 43 percent
  6. Little or no social media presence – 41 percent
  7. Lack of delivery options – 34 percent
  8. Desktop-only site design – 27 percent
  9. Insufficient or lack of company information – 16 percent
  10. Not accepting alternative payment methods including PayPal and Apple Pay – 11 percent

Image by StockSnap from Pixabay

37% of UK businesses ‘still not GDPR compliant’

New research shows that over a third of UK business haven’t fallen in line with GDPR, while a similar amount still send marketing emails without consent.

A survey of 1,021 UK workers carried out by MarketingSignals.com, revealed 37% confess they are still not following the General Data Protection Regulation (GDPR).

When asked to elaborate on why the business wasn’t falling in line, 35% said they are still sending marketing emails without the expressed consent.

In addition:

  • 31% say they still have the data of those who haven’t agreed to opt in to having their data stored.
  • 27% say they haven’t secured the data in case of a ransomware attack.
  • 22% say they have a longer process for those choosing to opt out from receiving information.
  • 14% say their firm hides privacy choices from people
  • 17% say they are still unsure as to what the benefits of GDPR are

Gareth Hoyle, managing director at MarketingSignals.com said: “The research shows there are many ways that businesses are admitting to not following the newly enforced GDPR regulations. GDPR is the most fundamental change to ever happen to data privacy, so it is imperative that businesses follow this and complete the process as soon as possible.

“Businesses need to understand that acting responsibly and ethically with customer data is crucial to protect and enhance brand reputation and ensure customer trust. Not only this, but it will enhance the quality of data collected which is a good thing for UK businesses.”