What is Market Research For eCommerce?
Market research for eCommerce is a type of market research consisting of collecting market data like competitive landscape, profitability, demand trends and consumer behaviour regarding a specific product or market niche.
This data enables Sellers to gain valuable insights about their target audience, make better decisions regarding strategy, marketing campaigns, and new product launches and position their offerings at the right market price.
How Do You Conduct Market Research for eCommerce?
One of the most efficient ways to conduct market research for eCommerce is to follow the six-step process described below.
Identify the Trends
Identifying the products and markets or market segments that will be most popular in the following years is one of the most important and challenging steps of eCommerce market research.
There are two methods you can use to identify the trends: manually or using technology-enabled tools.
The manual method involves using one’s connections network and news sources like industry publications. The disadvantages of this method are:
- it is time-consuming: the Internet is flooded with industry articles, blog posts and news and going through all of them every day can take forever;
- it provides uneven results as people with extended networks of connections are at an advantage compared to those with fewer connections;
- it doesn’t offer a competitive edge since by the time a publication or the network starts talking about it, it’s no longer a trend but most likely a developing fact, and it doesn’t allow you to reap the benefits of being a trendsetter.
Google Trends is one of the most popular technology-enabled tools that can help you conduct your eCommerce market research as it shows the latest consumer trends. You can track the interest in a product (like the one you want to put on the market, for example) by typing in a keyword relevant to that product and checking a desired period.
If the interest is moderate but stable (as opposed to seasonal), you can use this to develop your business with the products you searched about.
Collect Relevant Data
The next step is to collect quantitative data. You can check sources that provide free market research reports containing consumer insights like market demographics, key pain points of customers or information about their spending, growth forecasts or market share statistics.
This data enables you to identify the growth trajectory of the market. However, it only includes information about specific data that you will extract with the help of dedicated sales data tools.
Learn Who Your Competitors Are and What They Do
The first thing you need to do is to find out how many competitors in the market sell the product you want to launch. Search for the product and list all the companies that sell it.
Four to five competitors indicate a market for this product and, most likely, a profitable one. No direct competitors can suggest there is not a steady demand in place yet, and the product is either very new or very niche.
This information will help you understand what could work for you (compared to your competitors), the weak points of your competitors (like a slow-loading web page) and what you can improve compared to them, for example, faster shipping.
Studying your competitors enables you to gain a competitive edge and compete against established companies, no matter how big they are.
Conduct Keyword Research
Keyword research enables you to identify opportunities for generating organic traffic through Search Engine Optimisation (SEO).
You can conduct this research using free tools like Google Keyword Planner or paid tools. The premium tools allow you to search by keywords related to your product or service, expand the list with the same terms search and then filter the results based on various criteria.
Once you have this, check on Google the top ten ranking websites for that keyword and use a similar type of content, but in your style. Consider publishing high-quality posts and content, as quality is more important than quantity.
Engage with Existing and Potential Customers
Talking to existing and potential customers is the safest way to learn if they are interested in your product. This step (also known as primary research) is critical for your eCommerce market research.
You can discuss with potential and existing customers using consumer surveys, interviews and reviews.
If you have customers who buy from your eCommerce shop, you can ask them by e-mail if they want the product you intend to launch.
If not, you can approach potential customers by sending them a survey through a third-party platform or by creating a partnership with a company that has the audience you target.
The survey should contain questions about competitors, the challenges or problems they face when interacting with a product or service and their customer journey in general.
Consumer interviews address customers who already use your product and enable you to address follow-up questions to understand each customer’s pain points.
First, send a survey by e-mail and then offer the customers who accept to discuss with you (and have used the product) a gift card in exchange for a 15-minute call. This call will help you see your product from the customer’s perspective and make necessary adjustments to ensure a higher success of your product.
Reading customer reviews lets you establish your customers’ likes and dislikes and identify their “pain points”. You can understand better their expectations or dissatisfactions if you also check the reviews on your main competitors’ page. This way, you can turn their weak points into advantages by making the improvements your customers seek.
Put the Theory into Practice
After going through the five steps described above, it is time to put theory into practice and launch your product on the market. The response of your customer base is all that matters, and that’s why you need to ensure your product launch is flawless. Use SEO, content marketing, social media and paid marketing to promote your product on all relevant platforms to reach your target audience.
The feedback you receive will enable you to see what works and what doesn’t and to continually adjust your product until your sales show it is what customers want.
How Do You Research an eCommerce Niche?
Once you identify the niche you want to enter, check its market demand and competition using tools like Google Trends to establish its popularity and profitability. For your product to stand out, you need a niche where the demand generates sales and the competition is not too fierce.
Do your “homework” (as described in steps 1 to 5), then test the feedback and the market response to your product. Conduct customer surveys, create responding website pages and use ads on social media to assess if enough interested customers are willing to pay the price for your product.
An efficient eCommerce market research enables you to launch your product into a profitable market segment or niche, understand and exceed your potential and existing customers’ expectations, and constantly grow your business.
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