eCommerce is booming, and now’s the best time to maximize your online business’s growth and capture more traffic than ever before. For your business to thrive in its industry, you’ll need to know how to do accurate, thorough market research.
Market research is a cornerstone business operation across industries, and no entrepreneur or company executive should go without it. Today, let’s break down how you can practice informative market research for eCommerce businesses in detail.
How Does Market Research Help Your eCommerce Business?
Simply put, market research helps you understand the market in which your business operates. If your business is a machine generating products in exchange for revenue, that machine operates in a distinct environment called the market. The market includes:
- The buying behaviors of general individuals and people in your target audience
- The broader economic conditions of the market, which affect how much money people have to spend and how you should price your products
- The reputation of your brand and competitor brands
- How many competitor brands are working against you in the same industry
By performing market research, your company will know how to operate within its market more effectively. You will learn:
- How people perceive your brand, and how you can improve that perception over time
- How much people are willing to pay for your products, and how to maximize that range for as much profit as possible
- What your target audience wants from products in the industry
- Who your target audience is in terms of demographics
In other words, market research helps your eCommerce business become more efficient, profitable, and effective at marketing. Without good market research, you’ll be floundering in your attempts to capture more traffic, succeed with a marketing campaign, or generate profits. Sure, you might get lucky from time to time, but any success will be random instead of predictable.
Fortunately, it’s easier than ever to perform accurate market research thanks to online analytics tools and platforms.
What Are the Types of Market Research?
Before you can leverage market research to boost your eCommerce business, you need to know what types of market research are available. Although definitions vary from company to company, there are eight main types of market research.
Primary market research is the core form of this strategy. This is any research your company performs itself by directly examining your target markets. You create your own data and then analyze the data set for use for your marketing and other business goals.
When you perform primary research properly, you’ll get two types of data results:
- Exploratory information, which shows you the nature of a problem that you haven’t fully defined
- Conclusive information, which helps you solve a problem you have already defined
For example, say that you find data showing that your target audience is not spending as much as they used to in your industry. That’s exploratory information.
Conclusive information, in contrast, is data that answers questions you already knew about, such as your target audience feeling like it’s tough to make purchases online through secure means (thus answering the question of why you see lower sales).
With this information, your brand could come up with counter strategies to position your company for success. For example, you might decide to start offering cryptocurrency at your online store. This would enable your target audience to make online purchases more easily and securely than before.
You can gain primary research in a variety of ways, including:
- One-on-one interviews with your core audience members
- Surveys and focus groups
Secondary research includes any type of data your company automatically collects or that has been previously collected, analyzed, or published. Secondary research is often referred to as desktop research, which includes public domain data from research journals, research centers, and official government statistics.
Furthermore, secondary research can include passive data you gather from running your eCommerce business. These include data points like your total sales, the number of visitors your site gains over a month, how much money the average customer spends on your site, and so on.
Generally, it’s wise to use both primary and secondary research together. That way, you benefit from targeted research methods to find out specific data points and can supplement that research with the data you gather from everyday activities.
The key difference between primary and secondary research is that primary research is data you specifically seek out. Secondary research includes data that you gather incidentally or that you get from secondary sources. For example, your total sales or the number of hits your eCommerce site receives is secondary research because you would have gathered that data anyway.
In contrast, a survey you specifically set out to complete is primary research. You will not gain the information from that research unless you set up and perform the survey.
Quantitative research means collecting either primary or secondary numerical data. Because of its numerical nature, quantitative research is easy to collect compared to qualitative research, which you can learn more about below.
Quantitative research is important since it offers historical benchmarking and allows you to directly compare results and activity levels across different time frames. For example, you can compare your sales for this quarter this year to the same quarter last year and derive conclusions.
Qualitative research, in contrast, means collecting non-numerical primary or secondary research data. Since it isn’t based on numbers, qualitative research is a little harder to measure. It’s still important because it may offer depth or context to the quantitative data you do collect.
Generally, qualitative research is performed more efficiently and successfully by experienced marketers or analysts. Qualitative research also oftentimes includes written or spoken statements by your target audience, such as the responses to survey questions.
Customer research is research focusing on your target consumers and the key influences that may affect their decision-making. The goal of customer research is to better understand your target audience and learn about how they currently interact with your company and how they may interact with your brand in the future.
During customer research, you may focus on elements like:
- Customer satisfaction
- Customer loyalty
- Customer segmentation (i.e. who your target customers are in terms of demographics)
Branding research is leveraged to help you build and maintain a great company brand identity. This may involve researching things like marketing tone, images associated with your brand, your company’s logo, and much more.
This type of research can be carried out through a variety of means, including surveys, focus groups, interviews, and A/B testing on website pages. Most branding research focuses on elements like brand perception, brand value, and brand loyalty.
When done properly, brand research can help you determine whether your brand is performing well relative to competitors plus show you ways to boost your brand identity. It’s very important in the earliest days of building your brand.
Product research means researching how well specific products perform in the current market and how you can improve them in the future. It may include research focusing on:
- How customers perceive a product
- Whether your products are utilized and enjoyed “correctly” (i.e. how they are intended to be used by the design team)
- How well products are branded and marketed
Last but not least is competitor research. Competitor research focuses on researching the methods and results of your closest competitors in your niche. For instance, you may research your closest competitor’s site layout and see if they change it after an update.
The goal of competitor research is to make sure that your brand stands out from the competition and that your core audience more reliably chooses you instead of your competitors. You can perform competitor research by interviewing customers about buying preferences, gathering sales data from your competitor, and other factors.
How Do You Do Market Research?
Now that you know the types of market research available, let’s break down how you can practice good eCommerce market research. Below is a step-by-step breakdown of how to do market research in a generalized sense. You may need to tweak the steps or switch their orders depending on the specifics of your brand or niche.
Most often, market research begins by researching and establishing keywords relevant to your industry or niche. Fortunately, there are many high-quality tools you can use for this purpose, such as Google Keyword Planner or SEMrush. Many of these tools allow you to search for popular or high-traffic keywords by industry.
However, you can perform an even more basic version of keyword research: Just run a query on Google and check out the SERP or search engine results page for that query. This shows you what people are searching for and allows you to tailor marketing or brand awareness content to those keywords.
For instance, say that you run an eCommerce brand that sells customized clothing and graphic tees. You can search for keywords like “customized graphic tee,” “custom shirt gift,” and other relevant phrases. Then you’ll be able to find related keywords to those searches and make content with the keywords used thoughtfully throughout.
Done properly, keyword research will allow your site to rise on Google’s search engine rankings and bolster your eCommerce site’s search engine optimization (SEO).
Identify Your Target Audience
While keyword research is important no matter what, you’ll also need to thoroughly research and identify your target audience. Also called the ideal customer profile or customer avatar, your target audience is the group of people most likely to make a purchase from your brand.
Say that you run an eCommerce store selling jewelry made from sustainable resources. Your target audience is likely female and aged anywhere between 21 and 54. Further research might uncover that your target audience is most likely to live in metropolitan areas like big cities.
Once you identify your target audience, you can then:
- Make sure that your marketing materials and advertisements target your core consumers more directly. It’s better to tailor your marketing materials specifically to catch the people most likely to make a purchase than it is to make generalized ads that don’t speak to anyone
- Ensure that your products speak to the needs of your target audience more fully. This, in turn, will make people who shop at your brand more satisfied
- Let you know how your target audience wants to pay. For instance, if your target audience usually pays with crypto tokens, you can accept cryptocurrencies on your website and connect even more easily to your target audience
These are important elements for building and maintaining a successful eCommerce brand for years to come.
Investigate the Competition
Investigating your competition is also important for mastering eCommerce market research. Getting the exact numbers of your competition — like their sales figures or monthly visitors — might be impossible. But you can still perform good competition research by:
- Checking out their website from time to time and taking note of interesting things or practices
- Seeing how the competition changes their site over time, including how they change their prices or how they adjust their marketing
- Researching news articles about the competition, as even heavily filtered press releases or PR speeches can hide insights into how your competition is thinking
Once you have this information, you can leverage it to either improve upon their best ideas or avoid their mistakes.
Begin Monitoring Social Media
Social media marketing is a necessary part of eCommerce branding in this day and age. Therefore, you should set up social media profiles and start communicating with your target audience frequently.
As you do this, monitor social media conversations to stay informed about the buzz around your brand. If a lot of people are talking about a new product from your company, that’s great! However, if they’re taking to social media to complain to their friends and family members, you need to step in and correct the narrative or offer compensation to disgruntled customers before it affects your market growth.
In many ways, social media research and monitoring is the best way to “take the pulse” of your target audience and the general public. It can even help with competitor analysis, provide insight into market share and market size, or help improve your growth rate.
Stay Abreast of Industry Trends
Similarly, be sure to read papers or news articles about your industry and developments that affect all companies within that industry. Say that you operate a software company — naturally, you’ll need to remain up-to-date on industry trends regarding security, consumer data practices, and more.
This staple of market research shouldn’t be avoided. The eCommerce industry is a highly competitive landscape. If you fail to notice market trends, you could accidentally make your brand seem outdated or miss opportunities to capitalize on competitor mistakes within your product category.
Use Analytics Tools for eCommerce
You can and should set up and utilize analytics tools for your online retail site. Google Analytics is the easiest and go-to choice for startups and established eCommerce companies alike. This allows you to collect data on your visitors and product purchasers, then use it for future business strategies.
For instance, Google Analytics and other research tools might show that your marketing is firing on all cylinders and getting people to your site’s landing page reliably. But your company has a high rate of cart abandonment, meaning potential customers are putting products into their online shopping carts and leaving before finishing a purchase.
Upon further investigation, you find that you don’t offer enough payment methods for your target audience — who are tech-savvy and international — while other online marketplaces do. You can then make a change, such as offering crypto payment gateways, to reverse this trend, improve your user experience, and capture those lost sales consistently.
Build a Community
Lastly, you can conduct market research from people close to your brand by building a community. Consider setting up a forum on your eCommerce site and hosting surveys with prizes for your most frequent respondents to improve your customer experience and conversion rate. These methods provide several benefits, including:
- Helping customers connect with your brand for long-term satisfaction
- Building relationships with your target audience and customer base
- Allowing you to ask questions directly to your consumers or monitor conversations and consumer behaviors that happen on your eCommerce site
At the end of the day, knowing how to do market research is crucial for your eCommerce store. After all, market research reports can tell you just how important it is to accept cryptocurrencies and maximize your profit potential ASAP!
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