The Top 10 Reasons So Many eCommerce Projects Fail
Online marketplaces & stores powered by eCommerce platforms such as Shopify, BigCommerce, WooCommerce, commercetools, Shopware, Magento and Shopline have reshaped the retail landscape, enabling businesses to extend their reach to global audiences. Despite this, many eCommerce projects run into significant challenges that can lead to failure.
Working in eCommerce for over 20 years, my involvement in eCommerce project rescues is increasing and not decreasing as you may expect with the seeming commoditisation of eCommerce functionality "out of the box" that many platforms espouse.
Project rescues have exposed me to recurring issues causing these difficulties. Often, these fall into the realm of insufficient governance, inadequate customer acceptance criteria, suboptimal project tooling, ineffective communication, and misalignment with internal business processes. Here are the top 10 generic reasons that contribute to the failure of many eCommerce projects.
1. Oversimplification of eCommerce Complexity
The convenience and seeming simplicity of setting up an online store with eCommerce platforms can lead businesses to underestimate the actual complexity of such projects. From optimizing UX design and managing data security to seamless system integration, each aspect requires dedicated expertise and effective governance. Overlooking any of these intricate elements could compromise the project’s success.
2. Incorrect Platform Selection
Choosing an eCommerce platform without considering the unique needs of the business and its customers can significantly hinder the project’s progress. Selecting the appropriate platform is more than just ticking off feature-lists; it involves a strategic alignment with the business’s current needs and future aspirations. This includes the scalability potential to cater to increased demand and enhanced customer expectations.
3. Poor Adaptation to Internal Business Processes
An eCommerce platform’s tooling must be intuitive and align seamlessly with a company’s internal business processes. Especially for teams like marketing and sales, if the platform’s tooling creates operational friction, it can lead to inefficiencies, user frustration, and ultimately, project failure. Hence, understanding and aligning the tooling with business operations is critical.
4. Integration Complexities
As businesses adopt advanced headless commerce solutions, the complexities associated with system integration increase. These complexities, if not handled properly, can lead to functional difficulties, impacting the user experience and the project’s overall success. I think headless commerce has its virtues but it is not a once-size fits all antidote for every eCommerce store. Keeping projects simple, getting early shopper feedback and reducing the scope of your first release are all recommendations I try to communicate.
5. Inadequate Project Management
Successful eCommerce projects are built upon a sturdy framework of effective project management. However, it’s crucial to understand that project management extends far beyond merely having a project plan. It involves intricate task coordination, resource allocation, timeline management, and constant communication, all of which demand an experienced hand at the helm. Lack of proficient management can result in missed deadlines, inflated budgets, misallocation of resources, and communication breakdowns, leading to significant deviations from the project’s objectives and potential failure.
Having an experienced eCommerce Project Manager on your team is invaluable. These professionals have the skills and understanding to navigate the unique challenges that these projects present, ensuring that each aspect of the project aligns seamlessly with the overall objectives.
What further adds to the complexity of eCommerce projects is the involvement of multiple parties for solution delivery. From designers and developers to subcontractors, integrators, agencies, marketing professionals and stakeholder representatives, numerous individuals and teams contribute to the project. This necessitates robust Programme Management to oversee and coordinate all involved parties, ensuring a harmonious workflow and, ultimately, the successful completion of the project.
6. Failure to Set a Clear Scope and Phased Approach
Trying to build a complex solution all at once often leads to problems. Instead, a clear scope should be set with a phased approach to project implementation. This allows teams to become familiar with the solution and provides opportunities to gather early customer feedback, which can be used to refine the solution over time.
When projects become big they become much more complex. If you do have the luxury of starting small with a specific customer group or with a smaller territory I recommend looking into that option.
7. Undefined Customer Acceptance Criteria
Lack of well-defined customer acceptance criteria can create a rift between what’s delivered and what’s expected, leading to dissatisfaction and project derailment. Businesses must ensure that they have a clear understanding of their requirements and the standards for acceptable outcomes. It is important for a business to understand what they are procuring and how they are going to accept the solution.
Agile development methodologies are great and despite what some may claim, they do not mandate being loose with requirements. Your backlog of features should be understood before you commence alongside an understanding of how these features are to be accepted by the business. In my experience, many a requirement has been uncovered in the acceptance criteria and when these are not well defined, the project always suffers.
8. Poor Project Tooling
Substandard project tooling can trigger disorganization, hamper productivity, and lead to project failure. Employing comprehensive tooling can help streamline workflows, manage timelines effectively, and foster clear communication among team members, significantly reducing the risk of failure. Tools such as Jira, Confluence & Slack are the basic industry norm but not as many people as you may think know how to effectively configure these to be powerful project aids and if not setup correctly these can become hinderances.
9. Ineffective Communication
Communication is the glue that binds every aspect of a project. Lack of clear, regular, and effective communication can result in misunderstandings, overlooked tasks, and delays. Implementing a structured communication plan, supported by appropriate project tooling, can ensure everyone is on the same page and contributes significantly to project success.
Different communication is required at different levels of the business and on the project. At a minimum, project communication should include daily stand-ups, weekly project updates, Sprintly reviews / retrospectives & monthly stakeholder/board updates.
10. Lax Technical Governance
Technical governance encompasses aspects like code quality, security, system integration, and managing technical debt. Neglecting any of these areas can lead to system glitches, security vulnerabilities, and overall instability, posing a serious threat to the project.
Conclusion
In conclusion, a successful eCommerce project demands more than just choosing a platform like Shopify, BigCommerce, WooCommerce, commercetools, Shopware, Magento or Shopline. It requires robust technical and managerial governance, clearly defined customer acceptance criteria, efficient project tooling, effective communication, and a platform that aligns intuitively with internal business processes.
This list is the tip of the iceberg and eCommerce projects fail for a host of other reasons but focus on these to get you on the right track. By understanding and addressing these top 10 reasons for failure, businesses can navigate the intricacies of eCommerce projects, reduce risks, and significantly increase their chances of success.
