Market research is essential for understanding the target demographics, market conditions and competition.
Here’s how to do market research for ecommerce to collect high-quality and relevant insights about your target market.
1. Conduct keyword research.
Keyword research can help you figure out whether there’s a demand for the product that you want to sell online.
Even though high search volumes don’t mean the product’s idea is profitable, they do indicate genuine interest among consumers.
Moreover, keyword research is also useful when you are working on your inbound marketing strategy since it allows you to pinpoint opportunities for generating organic traffic with search engine optimization (SEO).
Some of the popular free keyword research tools are:
At the end of the day, traffic quality beats traffic quantity. When you are considering a particular keyword, ask yourself whether ranking for it will lead to more sales, not just extra traffic.
2. Scope out the competition.
You can learn a lot about a market by analyzing the competition, so figure out who your main competitors are and scrutinize them.
Note that even though you are doing market research for ecommerce, you shouldn’t only look at ecommerce businesses.
Once you have a list of the key players in your industry, you should look into their:
- Business model. How are they sourcing their products? Are they dropshipping or carrying inventory? Do they use third-party logistics (3PL) services? What is their pricing strategy? What is their marketing strategy? What is their returns policy? Jot down all the answers.
- Sales funnel. How do they attract potential customers to their website (content marketing, paid advertising, SEO, etc.)? How do they convert those site visitors into paying customers? Do they upsell? Cross-sell? Down-sell? Do they send automatic abandoned cart emails? You may want to go through their entire sales funnel to see how everything is set up.
- Website. Which type of platform do they have? How long does it take for their site to load? Does their online store design look professional? What branding elements do they use? How does their checkout flow work (the number of steps, the number of field forms, etc.)? Overall, do they provide a satisfying user experience?
Researching all this will help you determine:
- What works. You shouldn’t outright copy your competitors. But there’s no need to reinvent the wheel either. Cherry-pick the best practices and apply those to your own business.
- What doesn’t work. You might come across common frictions such as slow loading pages, confusing navigation, low-quality product images, etc. Take note of all that and make sure that you don’t make the same mistakes in your business.
- What can be optimized. When you dig into the logistics of a competitor’s business, you might uncover optimization opportunities that can then help you offer better products, lower prices and faster shipping.
And don’t be intimidated by established companies.
Remember that even the largest corporations in the world, such as Google, Facebook and Amazon, were once fledgling startups.
You too can carve out a space for yourself in your industry. In fact, extensive market research is precisely what allows small businesses to compete against big companies. You just need to uncover something that will give you a competitive advantage.
3. Research current trends
When you are doing product research for ecommerce, you should always look into the latest consumer trends. Use Google Trends to uncover those.
Here are the two questions that can help with online product research:
- Is the interest in this product declining, stable or growing?
- Is the interest in this product seasonal or does it remain the same all year?
Simply type in a relevant keyword and pick a time period.
For example, if you type in “artificial plants” and pick “Past 5 Years” as your timeframe, you will see that the interest in this keyword has been stable, with a noticeable increase in the last year.
A moderate but stable level of interest like that may indicate an opportunity for building a sustainable, long-lasting business.
Also, when you see an upcoming trend, analyze it from different angles. Be wary however, when a trend has a crazy upward trajectory at the moment. Because a real-time spike in interest might turn out to be a short-lived fad.
While it’s okay to capitalize on hot trends, you shouldn’t build your entire business around them. Make sure that your foundation is stable.
4. Utilize social media
Social media is a treasure trove of consumer insights. It’s the place where people broadcast their complaints, wishes, preferences and aspirations. But to find those golden nuggets of wisdom, you need to go on a deep dive.
To avoid getting too deep down the internet rabbit hole, keep your online business research focused on:
- Following influencers in your industry. Analyze their opinions, conversations and past partnerships with brands.
- Monitor relevant hashtags. Identify the most relevant hashtags for your products and then make it a habit to monitor them regularly.
- Analyze competitor sentiment. Keep an ear on what people are saying about your competitors. This is a great way to figure out what their strengths and weaknesses are. Note that the most valuable information often lies in posts that mention a competing company or their products but don’t tag them.
Picking out the language your customers use — words, slang, metaphors — to express their preferences is a short-cut to writing better copy. By infusing the voice of customer data into your messaging, you make your pitches feel more personal and relevant.
5. Leverage forums and customer feedback
Niche online forums are another leeway into learning about your customers’ preferences.
To get the best scoops, do the following:
- Find out which online forums are the most popular in your niche.
- Register to those and check back regularly.
- Contribute to the discussions to build up your credibility.
- Pose questions and engage in conversations to better understand your audience.
Alternatively, you can ask your current customers to provide feedback.
That’s even easier to do:
- We can help you create surveys of your existing customer base, and provide detailed statistics on the performance of these survey campaigns
- Conduct one-on-one customer interviews. Ask super-fans to jump on 15-minute calls with you. People love to express their opinions and want to feel heard. So getting some respondents might turn out to be easier than you think!
- Send automated emails asking for feedback. After you buy something from Amazon, you probably get an email asking you to rate it. You can do the same in your business. In addition to receiving feedback on your products/services, you’ll also generate customer reviews.
Finally, pay special attention to unsolicited customer feedback, even if it’s negative. People voicing their opinions online must have felt that something was important if they decided to go through the trouble of reaching out to you.