Why Does E commerce fails?

Literature Review:

The last five years have seen an explosion of online sales activity with growth rates in almost all verticals in the fourteen to twenty percent range. However, ninety percent of all online businesses fail. Most of the explanations for why so many online initiatives fail to achieve their objectives are tactical and fail to address the more urgent strategic issues relative to the webs business environment.

E-commerce projects eat up vast amounts of internal resources and funding, and most importantly, a failed e-commerce project means your company is losing out on one of the most dynamic and fastest growing sectors in our economy.

E-commerce projects fail because leaders do not have the knowledge and understanding of the online world. Every other argument detailing the many issues related to online business failure come in at a distant second to these basic principles. You must understand the nature of the online world if you hope to be successful online. It is a vastly different landscape where your business strategies must be tailored to its dynamic nature.

There are three things your e-commerce initiative must take into account. 1) Brick and mortar businesses are visible for all to see; online your company and products are only as visible as the search engines say you are; 2) In the online world the user/customer dictates what companies will be in there field of view based upon the keywords he or she uses; 3) The World Wide Web levels the playing field, large and small companies have little differentiation. Economies of scale are diminished and do not carry the same weight as they do in brick and mortar.

Visibility on the Web

Location is still everything, just not physical location. In the physical world retail store location is everything. Studies show that the same is true on the web; it is just that the best locations are on the first page of Google’s search results page, Not just any first page but Google’s first page, which represent 80% of all search traffic. Winning front-page placement on Google requires a through understanding of how search engines operate, web honed marketing skills, time and technical expertise in search engine optimization.

Finding out how and what people are searching for is very simple and requires no investment and very little time, a popular website of search marketers provides the user with the number of times a keyword was searched for in the preceding month. You will find marketing information on the web readily available; search engine marketing has evolved from a form of abstract art into a science, however interpreting the marketing data requires some experience and a through understanding of how search engines rank websites.

Relativity of Keywords

On the web, people leap from site to site with the click of a mouse, driven by information search engines return, the relative nature of the keywords they use, and the online stores ability to satisfy the users query

Because users are so mobile, websites must be designed with a certain amount of stickiness. This stickiness is not produced with expensive graphics and Webmaster tricks but in the sites ability to address the users needs based upon their keyword query.

The Flat Nature of the Web

The fact that anyone can setup a website and become a competitor with very little investment means the competition from small online stores is significant and can even be dominate in some verticals. Brick and mortar advantages due to economies of scale become less significant, online merchants do not need buildings, inventory, (drop-shipping is a significant force on the web) or a sales staff.

The quantity physically available, and product display attractiveness and merchandizing give way to content and the ability of the online store to display enough information for the customer to make purchase decisions.

Conclusion

Building an online business is a lot like buying and implementing a business system, the software and hardware are purchased and installed, users are trained and then comes the realization that ninety percent of the cost and work are in the implementation. The rate of failure in business system implementation is very high, and for the same basic reasons, leaders are not armed ahead of time with the knowledge and understanding to improve their probability of success.

Online businesses that fail do so because leaders are not armed with the knowledge of just what the landscape of the web world looks like and an understanding of how the online community shops. The web is a new frontier, a buyer driven world with different rules where buyers enjoy a seemingly unlimited variety of choices, which successful sellers must conform to.

The same basic principles of business still apply to the online world, marketing, customer support, product marketing and capitalization are just as important. Strategy is still important; however the strategies employed require a paradigm shift in thinking, and must take into account another world, one somewhat foreign to what have been used in business ventures of the past.

So here are the simple steps to take in order to beat the odds. 1) Get a firm grasp of just what it takes to get good search engine positioning; 2) Understand what the relative keywords are for your business venture and what it means to own them on the web; 3) Build a site that gives you advantage over the competition, a website that takes into account the issues consumers deal with when buying online.

Creating a website where customers can purchase your products is a relatively simple technical task. Creating a web presence where your website is actually selling product for you is not a simple task, it is expensive and it is not a fast track to increasing sales. Businesses ignorant of the dynamic nature of the webs landscape are destined to repeat the failures of the past and join the growing number of failed initiatives. Companies with an informed approach are in a great position to cash in on the webs fourteen to twenty percent yearly growth rate.

Research question:

Why Does E commerce fails?

Data Collection:

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