Conducting market research is an essential stage of any e-commerce business, particularly when it comes to encouraging growth. With an ever-changing sea of possibilities and challenges, market research can give you the guidance to navigate those waters without blowing your budget on the wrong moves.
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Market research, in short, is the process involved in learning about a market for the sale of a product or service. It involves gathering, analyzing, and interpreting data about the market.
You can also research the product or service you wish to offer for sale in that market.
The idea is to figure out who your target audience is on a deeper level, understand the competition, and keep an eye on whatever the current market trends are.
You can use it to improve your B2B sales and marketing funnel, and it can include a variety of methods, such as surveys and interviews, focus groups, and data analysis.
The desired outcome is to make informed business decisions for growth and success that maximize your resources so you get the most bang for your buck.
There are two main types of market research: Primary and secondary. Let’s delve into them here.
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Primary market research is research that you conduct yourself, or through an agency specializing in this. The information you gather is first-hand, which essentially means that you own it.
You can gather this information through a number of research styles, such as surveys, observations, structured or unstructured interviews, or focus groups.
The main pro of doing it this way is that you can get information that is the most relevant to your needs.
You can find out exactly what your target audience is into. You know that the information is up-to-date. And with social media, it’s now easier than ever to reach your target audience to ask questions.
The main difficulty with this method is resource intensity.
Either you need to dedicate time and effort into conducting your own research via your team, or you need to outsource the work to an agency which can be expensive.
Secondary market research involves gathering information from public sources. These could be things like industry reports, government reports, statistics published online, or academic papers.
Can be cheaper than doing your own research, since many resources are free. You can also enjoy a broader overview of the market, which has its own benefits.
Some content comes behind a paywall. You also don’t get information that is hyper-curated for your e-commerce business.
There’s no reason why you couldn’t use both primary and secondary market research methods for your business. You can pick and choose what’s most appropriate for your budget and in-house skills.
This will help you to get both a broader overview of the market, as well as learning valuable information about your target audience.
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Market research is vital for the success of an e-commerce business because knowledge is power, especially where your budget allocation is concerned.
Here are some core benefits of market research for your e-commerce endeavors:
Entering into any market with a new product or service, or starting a new business is risky business. It requires careful market research to make sure that your hosted VoIP solution ideas, for example, are viable, that the market is open to your offerings, that your target audience exists.
You wouldn’t start an egg farm in a town with a saturated egg market. You wouldn’t open a cat cafe in a culture where animals are deemed to be dirty. And you wouldn’t start an after school club for teenagers in a town where everyone is over the age of 20.
You can lose a lot of money if you misjudge the market and target audience, since businesses usually require a substantial investment of time and money. You can minimize this risk by understanding who your competitors are, whether the market is saturated or not, and the size of the market.
You can also learn about the average income for people in the area, as well as employment rates. You can get info on the location and how others price their products.
If you acquire this knowledge, you can start to identify gaps in the market. You can also use this information to steadily grow your business and adapt to sudden and gradual market changes.
What works one season doesn’t necessarily work in the next.
We unfortunately operate in a system that forces us to compete with each other. As such, it’s vital that you keep an eye on your competitors so that you can offer something that they don’t.
You can take a look at their marketing methods, what customers are saying about them, and what they’re offering. Then, you can decide what it is you can offer that stands out from the others.
Do you have excellent customer service? More options? A nicer logo? It’s all gold.
Another clear benefit of doing market research is learning about your customers. Who are they, what do they care about, why would they connect with your brand? These are all vital questions you need to answer.
Market research can help you to unearth the needs, desires, and behaviors of potential customers in the market you want to enter.
Let’s delve into the steps you can follow to conduct your market research and grow your e-commerce business.
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Clearly outlining what you want to achieve through the market research you’re conducting will help you to make the most out of your market research efforts.
Whether it’s understanding your customers’ preferences, identifying potential new markets for your workplace management software, or improving what you can offer through your product, outline what your goals are clearly.
Other objectives could include things such as:
Establishing your objectives clearly at the outset will allow you to streamline your efforts and ensure that your data is relevant to your business goals. You can then make informed decisions, and enhance your e-commerce performance for sustainable growth.
Your next step should be to define your ideal customer profile and segment your target audience depending on factors such as demographics, consumer behavior, and your audience's personal preferences and values. To go into further detail, you should segment your audience based on some of the following:
Curating detailed customer profiles will allow you to personalize your marketing strategies, and eventually lead to higher conversion rates, increased customer loyalty, and sustainable e-commerce growth.
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The next step once you have identified and segmented your audience is to choose the best research methods for your goals, such as surveys, interviews, focus groups, or data analysis.
The different methods offer various unique advantages that can help you in gathering useful information from your target audience. Let’s go a little further into each of the ones we mentioned:
Finding the most appropriate research methods for your goals, target audience, and budget will help you to work efficiently to achieve your targets.
You can gather relevant data to inform your e-commerce strategy and drive business growth.
Traditionally, inventory management for e-commerce—whether automated or manual—has relied on a hindsight perspective. However, in today’s dynamic marketplace, it’s widely recognized that past performance is not always the best benchmark for predicting future success.
Be sure to pick methods that align with your research goals and provide meaningful insights. The goal is data-driven decision-making at all times!
When you have your data collection methods in place, it’s time to start gathering the data and organizing it to be analyzed in the next stage. You should transcribe interviews, and put them into your software of choice for analysis.
Make up some charts and graphs about your B2B sales and marketing funnel, for example, for easy dissemination of the information, and put it in a digestible and shareable format for your colleagues.
The fifth step is to analyze your data. This is the step that will help you figure out what actions you can take to drive growth.
You can identify patterns and trends, as well as opportunities to optimize your online business operations. You should consider the following key aspects of analyzing data for e-commerce growth:
Finally, you can take the opportunity to make informed decisions on the basis of your data analysis.
You can do this when it comes to developing your product, deciding how to price things, deciding on your marketing campaigns, when considering whether to buy leads, and how best to support your customers.
Data-driven decision-making can lead to more effective strategies and sustainable business growth.
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The market is not a static sculpture that you find your niche in once and only once. It is a quickly evolving, often elusive beast.
You need to keep in close touch with your industry by continuously monitoring for changing market trends, keeping on top of customer feedback, and paying attention to performance metrics to adapt your strategies and stay competitive in the e-commerce landscape.
Market research is a vital component of any business strategy, and taking simple and deliberate steps can help your business to grow and flourish in a competitive market.
Defining your goals, identifying and segmenting your target audience, choosing the best research methods to meet those goals, and collecting and analyzing your data are core steps towards getting actionable insights.
And it’s not enough to stop there – you want to make sure that you implement strategies that are conducive to your growth, and that you keep monitoring the market and your performance so you can remain ahead of the curve.