5 Myths About E-commerce That May Be Holding You Back

5 Myths About E-commerce That May Be Holding You Back

In the past decade, e-commerce sales have grown from $572 billion in 2010 to $4.2 trillion in 2020. That’s a growth of over 6x in the past decade as the shift to digital opens up new opportunities to reach a larger population of consumers. Especially with the help of e-commerce platforms like Shopify, starting your own online business is now easier and faster than ever. But setting up an online shop is one thing; actually doing it well and making sales is another.

Whether you are just starting your e-commerce journey or have been in business for a while, there are some common myths about doing business online that you’ll want to keep a look out for. Falling for these misconceptions could be holding you back from growing and scaling your business to the next level.

5 Common Myths About E-commerce That Are Hurting Your Business

Myth #1: The only way to win customers is with lower prices

This is likely one of the biggest myths that retailers fall for. While pricing is the primary driver in a purchasing decision, choosing to only focus on it will hold you back from countless opportunities to truly grow and differentiate your brand.

Today’s consumer is complex and multi-faceted in their decision-making. Every individual has their own unique checklist of considerations in mind that could include factors like convenience, trust, ESG, brand alignment and much more. If you know that your brand offers high-quality products and services compared to others, reducing your price will likely not work for your profit margins. Aside from that, it could also tarnish customers’ perception of your brand.

What’s often not talked about as much is how low prices can also push customers away. Consumers will constantly wonder what the “catch” is and question your brand's quality, effectiveness and even legitimacy. So to truly win over customers is more than just being able to offer a low price tag. As a retailer, you want to offer a reasonably competitive price, but also ensure that you communicate the number of other factors that differentiate you from competitors.

Myth #2: I don’t want to bother my customers

Over-communication is a common fear for many small retailers. However, they fail to realize that not communicating at all also leads to missed opportunities. Spamming customers with irrelevant emails and offers will drive them away, but not sending anything will make customers forget about you. The key is to find just the right amount of communication and to be strategic about identifying and reaching out to interested customers.

Start by analyzing your existing customer data and segmenting them into different groups accordingly. You want to be able to distinguish your customers between those that are highly engaged and those who haven’t interacted with your brand for a long period of time. Doing this will give you the confidence to send more personalized and relevant messages to customers based on their level of interest and engagement. 

To tackle your concerns about spamming customers, invest in setting up an automated email strategy. The Shopify platform comes with built-in features for retailers to create simple automated email journeys that trigger messages based on specific actions a customer takes. If they are consistently interacting with your messages and showing interest, you can continue to send them more emails. If not, you can customize their journey to taper the frequency of communications.

It’s important to remember that customers need to be nurtured and nudged. They often need multiple touchpoints and reminders before they take an action, so don’t be afraid to communicate with them more frequently. Just make sure your messages are relevant.

Myth #3: There is too much competition

As starting an online business becomes easier, the concern of not being able to compete in an increasingly saturated market is a limiting belief holding back many small businesses. While it is true that competition is fiercer than ever, it’s also easier than ever to reach more potential customers globally.

Before the digital age, businesses were generally limited to their small local population. Today, e-commerce businesses have the ability to reach any customer they want around the world through digital ads, promotions and social media. For small niche brands, this enables the ability to hyper-target specific customers that fit your ideal profile, so you can focus on competing for customers you actually want, instead of ones that don’t particularly fit your business.

Aside from expanded reach, today’s new generation of consumers also values brands differently. As mentioned, price is a primary driver for sales, but it’s not the only consideration. There are many ways small retailers can stand out, like focusing on novelty and brand alignment. Believing that there is simply way too much competition in the market will limit your creativity to differentiate your brand and reach your ideal customer. What’s important is to get specific about who you are going after and what need you are filling for them. It’s better to focus your time and resources on targeting a smaller set of ideal customers rather than trying to compete for all customers.

Myth #4: I can’t afford to do marketing

Not only are small retailers worried about too much competition in the market, but the fear that they are losing because of their lack of resources is a common concern. There is a misconception that paid marketing strategies are the only way to acquire new customers and generate sales, but it’s difficult to make meaningful sales when larger competitors are buying up your customer’s attention with aggressive digital ads or promotions.

While paid marketing is an effective strategy, most e-commerce businesses start with limited resources. They build their businesses by effectively leveraging organic marketing channels. Consistently posting on social media, sending email campaigns, providing quality customer service and building word-of-mouth referrals are all organic tactics that don’t require a huge budget.

Once you start to build some traction, that is when you can consider scaling by doing paid marketing tactics like sponsorships, digital advertisements or influencer marketing. Every business starts from zero. It will take time and patience to build up e-commerce sales, but there will always be ways to do marketing, even on a limited budget. There are no excuses, it just takes time, effort and creativity.

Myth #5: Consumers aren’t spending while inflation is high

Throughout your e-commerce journey, you will come to learn that there are many things out of your control that will heavily impact your business. One of them is the state of the economy. When GDP is up and the economy is steadily growing, consumers are more apt to spend which is naturally good for business. On the flip side, that means when the market is down, businesses will suffer.

During these economically challenging times when inflation is high and consumers are in a fearful or cautious state, it’s easy to assume that businesses will suffer. While there will be certain industries that will collapse, some others will also thrive. For instance, during the global pandemic, we naturally saw a decline in travel, leisure and specialty retail sales. However, industries like fitness, home and technology saw a significant rise in sales to fit the consumer’s new lifestyle.

So, while customers are certainly more cautious about spending during a recession-like economy, this doesn’t mean that they’re not spending at all. As a retailer, you will need to understand where your product fits in your customer’s hierarchy of needs during these times and strategically position your brand accordingly. This could also be an opportunity for smaller brands to win over customers from traditional go-to brands while loyalty is down and consumers seek lower prices and better deals.

Moving beyond the myth

To grow and scale your business, you have to move beyond these common e-commerce myths. A successful retailer is one that is willing to go outside of the box, be innovative and creative. Sticking to these myths will rob you of opportunities to take your business to the next level. So the next time you catch yourself with these thoughts, consider the other side of what your business could be missing out on.
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