The growth of eCommerce has been extra-ordinary. More and more new entrepreneurs to start selling products online. But unfortunately, the majority of them don't do proper market research, which leads to an early end of their dream to build the next Amazon or eBay or Aliexpress.
Following craze can only get you a short way and eventually cause a downfall. In order to build a successful business, you have to find profitable niches or products where you still have scope to shine. Take Leisa Papa’s Little Kids Business or JOSHi as an example.
Thorough market research can help you come up with products that have demands that are not fulfilled by any current market players or products that are still untouched.
In this blog, we will write about a tremendously important guide on eCommerce market research. If you are someone who's planning to open a shop online, this is a must-read article for you.
The Rise of eCommerce
The rise of eCommerce is a long talked matter. It has come to a point when giant offline companies like Walmart are now forced to sell online because that's where the customer's shop! If you look at some stats, it becomes quite apparent that eCommerce is not the future but present.
The fact that the eCommerce sales figure has increased by almost 3 fold in just a matter of 6 years is not a surprise. It has been steadily increasing not just in the USA, but all over the world. Here's a stat from Emarketer, demonstrating the region-wise eCommerce growth, and you can see the number is going upwards everywhere around the globe.
These figures are both inspiring and tempting. So people often want to start an eCommerce website and start earning a big sum without analyzing the market and the product they want to sell. That is where the eCommerce Market Research comes in to save.
What is eCommerce Market Research?
eCommerce market research is not a complex term. The definition is fairly simple. According to the Oxford Dictionary, the term market research means The action or activity of gathering information about consumers' needs and preferences.
So, we can put together that definition with eCommerce, and safely say that eCommerce market research is the process of gathering information on which products your customers want to buy online.
Market research for eCommerce lets you know the demand for which products are growing and which products are losing market day by day. It helps you smarter decisions before you start a new eCommerce or launching a new product.
How Does Market Research Help to Grow and Win
Market Research was not a big thing for eCommerce even a couple of years ago. Nowadays it is becoming essential. If there is anything we can all agree upon, that is –
Data may disappoint, but it never lies.– Jay Samit
With market research, you can get real data that can help you decide the market demand for a product. This way you don't need to rely on your intuition or the buzz.
The advantage of not following the buzz all around you is that you get to know what exactly your customers need.
For example, let's say you want to create an eCommerce marketplace and sell Wooden Ornaments as you saw some of the people around you wearing those. But you don't even know if the Wooden Ornaments are popular all around your country.
Now if you do a quick research on Wooden Ornaments on Google Trends, you'll find something like the below image.
You can see clearly from the data that Wooden Ornaments are most popular during November-December every year. Now you know that selling Wooden Ornaments throughout the year is not a good idea.
This is how market research can help you choose the demand and potential of a product. Albeit this is just a small part of what we will be going through in this blog. But you got the idea, right?
Choosing the right product to sell at the right time and find a product whose market is still not saturated with too much provider is the key to be successful for a new eCommerce, and that's what you can find out with market research.
Fundamentals of Market Research
Market research is a part of your overall marketing strategy. To know market research from its core, you have to know it's fundamentals or basics. Market research can be divided into four primary categories. Which are –
- Exploratory market research
- Descriptive market research
- Causal market research
- Predictive market research
Now don't get worried, we're going to explain all the types of market research in detail.
Exploratory Market Research
Exploratory market research is the preliminary stage of your research. In this stage, you haven't yet decided on a product. In this stage, you will try to find products that you can sell. Make a list of all the potential products that you can find through several methods, such as Google Search, Google, Trends, Amazon, and even your nearest supermarket.
Next up, formulate a strategy by which you can eliminate all the ideas that are impractical, does not match your available resources and skill set. Now only those are left that you think you're interested and possible with your resource. That gets us in the next step, which is descriptive market research.
Descriptive Market Research
Descriptive market research looks deeper into your selected products and helps you finalize the ultimate niche. In this phase, you will have to find answers for question's like – who are the potential buyers of the product?, What is the demand of the product?, When does the demand hit its peak? Who are the potential competitors?, and What are their specialties?
These questions can help you find your long sought answer, the perfect product to sell, when and to whom.
Causal Market Research
Casual market research is the next step of descriptive market research. It basically deals with the aftermath of one decision to another. For example, let's say you decided to sell Wooden Ornaments. Most of the competitor sells Wooden Ornaments made of ‘X' trees. But you think ‘Y' tree would be more cost-saving. So, if you go with the ‘Y' tree, what impact it would have on product quality? Or, you decided to use a new type of color on the ornaments, what would be the effect of that? These are the things casual market research helps you find.
After you choose your product finding a cost-saving way of production becomes a big challenge and casual market research is necessary for that.
Predictive Market Research
Like the name suggest, predictive market research is about predicting or forecasting the future growth opportunity of a product. But prediction these days are not all about your gut or intuition, we depend more on data gathered from sources like google trends, statistics than our sixth sense.
Predicting the growth of a product perfectly can essentially help you make a better decision on a product.
How to Conduct a Market Research
We have all the basics of how market research works, and now is the best time to get to know how to conduct one. Now, there are four different part of an eCommerce market research, which are –
- Discovering Products
- Understanding Consumer
- Analyzing Industry
- Analyzing Competitors
In the next few paragraphs, we will show you how to perform the four different parts of market research for eCommerce. Without further ado, let's get started!
How to Discover Products
Discovering products is the first and foremost thing to do while you're performing market research. You can try out several methods to find and seek the values of a product. Some of the most popular tools to do that are Amazon Most Wished-For List, Keyword Research, Google Trends, SERPs, and Social Media.
Amazon Most Wished-For List
Amazon's most-wished-for list is extremely useful when it comes to finding products that have high demand. You can choose different categories after visiting this page of Amazon Most Wished For List. You will have all sorts of products to choose from and get the perfect products for you to sell.
Keyword Research is a broad field and we will not get into the cores of it. But to find products that have good demand, keyword research can come in very handy. There are many tools to help you do keyword research, but we will only talk about Google Keyword Planner. It works like this, you either enter the name of the product to discover related keywords that people search a lot about. Or you can get search volume and probable search forecast for a certain product. If you already have a list of products and you're now scrutinizing your options, keyword research, especially Google Keyword Planner, can help you do that.
Google Trends is a great way to find new products and check whether the interest of people increased or decreased in the last few years or so. The way it works is fairly simple. Visit Google Trends, search for any product it'll show you something like the image below.
You can easily determine from the result whether the interest has increased or decreased over time for that specific search term. You can also filter your result with your preferred country.
If you are not yet sure of a product you can use another smart feature from Google Trend.
The above page will be shown when you visit Google Trends. You can see there are three options down below that can help you know top interests worldwide and country-wise. From here, you can easily find some products that you can sell.
SERPs or Search Engine Result Page can also be a great option for discovering products. In the image below, you can see that we searched on google with the term “products for car” and scrolled to the bottom of the page, and as you can see it is showing search terms like best car cleaning products, best car wash products, best car detailing products. Got an idea of how it can help?
The main purpose of Social media is not doing market research but connect people. Yet, there are no better places to know people's interests, psychology, and everything that has to do with market research.
Facebook groups, in particular, can be very useful to know the interest of people on a product. You can also try researching the most popular hashtags. You will be amazed at how much data you can get from social media for your market research.
How to Understand Consumers Needs & Wants
As of now, you already decided which product you want to sell, right? Now it's time to know the people who are going to buy your products. There are several ways you can try to understand your customer base. Some of the most effective ones are –
- Consumer Report
- Facebook Audience Insight
The consumer survey is one of the most common practices of knowing your customer better. There are many online platforms like google survey, to do surveys. Apart from that, you can also conduct surveys on big Facebook groups that share the same interest with the permission from group owners.
Sales reports can bring out some very key information for market research, such as does free delivery influence purchase decisions? Is Instagram more important than Facebook to run your ads? Which platform saw the highest conversion rate? These are the things that you'll get to know from consumer reports. You can find many of them just by searching on google.
Facebook Audience Insight
This is one of our favorite ways to gather customer insight. Facebook audience insight can provide data like your potential audiences' demographic overview, other interests, and even their lifestyles.
How to Analyse Competitors
There is no business without competition. To step up your growth, you have to keep a close eye on your competitors and what they are doing. Luckily, we have a complete guide on competitor analysis. You can check that blog for an in-depth review.
In short, competitor analysis is about knowing your competitors. Understanding your competitor analysis can help you make your business strategy more easily. Thus you can choose how to market a product in a better way than your competitor.
Finalize Your Market Research Outcomes
Every operation has a result. Market research is no different. In fact, proper market research creates a good foundation for a long-standing business.
After completing market research, you will get to know the following things and get your business started.
- The right product to kick-start your eCommerce business.
- Best time to sell your product.
- Insights to your potential customers such as their age group, location, interests.
- Information about your competitors to give you an edge over them.
Grow Your eCommerce Business with The Market Research Finds
Business competition has been increasing day by day. To cope up with it, and be successful, you need to follow a continuous strategy. A paid marketing on google alone can not save a business without potential. Market research is a part of your strategy that boosts your business growth fundamentally when it is still relatively new, or you are launching a whole new line of product.
Finding the right product with high demand yet low competition means a better chance to be successful. With market research, you can find products that have a higher chance of standing out.
You can also know which audience group to sell your product to. Finding the right audience can make advertisements cost much less as you will not have to spend and try to know your audience. By market research, you will get to know your audience even before you launch your products.
Last but not the least you can also get ideas on your competitors content strategy, brand messaging, new products, so that you will know the competition you are going to face once you launch the product. And luckily, you will also know how to survive and outperform them with a proper strategy.
This is how market research helps you grow your business or product, even before you launch them. A solid foundation can make your business go a long way.
You can't build a great building on a weak foundation. You must have a solid foundation if you're going to have a strong superstructure.
– Gordon B. Hinckley
Experts Suggestions for a Successful eCommerce Business
Every successful eCommerce has two things in common, proper strategy and hard work. But some extra tips from experts can enhance the chance of making it successful. We have years of experience helping people making successful marketplaces using Dokan. Very few can help you with effective suggestions than us, so let's get to it.
Think How a Customer Would
Whether you are still deciding on a product or you are convinced with one, there is one thing you must keep on doing. Think like a customer. Ultimately it's not about what you like, but what people like. So be sure to choose a product that most people prefer. Otherwise, nothing can stop a pile of never-ending inventory.
Try, Try, and Try
No matter how much you read, you can't possibly know everything before you experience them. Whether you are a new entrepreneur or, launching a new product, experimenting with different things is a must.
If something doesn't work, move on to the next plan. An advertisement doesn't work, move on to a new one. A strategy failed miserably, form a new one. This is the only way you can eventually see the lights of success.
Market research has been a norm for large companies for a long time. But day by day it is becoming essential for newer eCommerce businesses as well. Great market research will not create immediate value, but you'll start to experience benefits as your business grows.
Often eCommerce owners select a trendy product that ultimately results in devastating failure. These things can easily be stopped by performing market research.
If you are also an eCommerce owner, there's a good chance you have heard of multivendor marketplace. Given the popularity of Amazon, eBay, Etsy, Aliexpress, it would be no wonder if you'd like to build one yourself. Trust me, it's relatively easy to start one! If you ever wondered about how to build a multivendor marketplace, we have a link for you below, do check it out!