When there were only brick and mortar stores, businesses would know where the next potential customers are coming from.
With ecommerce stores, the possibilities are limitless, and the handful of entrances have now been replaced by ‘n’ number of them. So, where and how do you start your marketing research endeavor becomes more vital when it comes to ecommerce.
Today, there are multiple ways to undertake ecommerce market research. Not to forget the increasing number of tools that promise to make your task easier and more fruitful. But it is imperative to remember that one size doesn’t fit all in this landscape.
This article discusses the basics of ecommerce market research and how you should go about it.
Ecommerce market share and statistics
Do you have any idea of how vast the ecommerce space is?
Well, as per Statista, there were over two billion people who purchased goods or services online in 2020. The same year, e-retail sales raked in over USD 4.2 trillion globally.
2021 was even better for retail ecommerce sales, with volumes surpassing USD 4.9 trillion worldwide. Further, it is expected to do exceedingly well in the next four years and grow another 50% to cross USD 7.4 trillion by 2025.
Read more in our article on “4 Statistics That Should Convince You to Start an eCommerce Business Today”
What is the purpose of conducting market research in ecommerce?
Market research refers to the process of ascertaining the financial viability of a new idea from real people. It can be with regards to a new product or service or a change in an existing offering. It can be primary research or secondary research, depending on what you are looking to achieve.
But why do we conduct market research? Here are the primary reasons –
Understanding the target audience
Ecommerce businesses cater to a wide variety of audiences with different tastes and preferences. As per a Statista report, internet sales formed 19.6% of all retail sales globally. As per a forecast, the share could go up to 25% or more by 2025.
Given the massive importance of the vertical, it is imperative for businesses to keep developing new marketing strategies that help them consistently woo existing and new customers. But for that, they will have to start with devising and understanding ecommerce personas. It will ensure that you voice customers’ needs and give them more reasons to lend their trust to you.
When it comes to understanding your niche audience, it is no longer merely about bifurcating them based on age or demography. Instead, you will have to dig deeper and understand the target customer’s thoughts, feelings, and values.
Understanding customer behavior
Your product cycle should be in line with the needs of the customer. For example, buyers would demand more umbrellas during the rainy season.
While these anticipations are mere surface level, you will have to delve deeper into how your target market purchases and then use the information to improve their user experience.
The primary idea behind ecommerce market research is to reduce friction throughout the buyer’s journey and ensure a holistically positive buying experience. Decoding customer behavior and using it to develop your marketing strategies opens up new markets to cross-sell and upsell, enabling you to improve conversions and rake in more numbers.
Tapping new business opportunities
Ecommerce market research is an integral part of business expansion strategy too. You cannot decide to sell in a new online market from tomorrow and start preparing for the listing process unless you have thorough research to back it up.
With robust ecommerce marketing strategies in action, you can undertake cross-regional sales, figure out opportunities to develop new business models and products/services, and define new ways to reach your target audience.
Ecommerce market research tools
Now that you know why you should undertake ecommerce, the next step is to understand the best ecommerce market research tools that would help you reach there.
Listed below are some of the tools and techniques for building an efficient ecommerce market research strategy –
1. Eke out your competitors
The first tool that would prove handy for your research endeavor is to eke out your main competitors and what they are up to.
For this, it is imperative for you to look beyond your competition’s ecommerce businesses and instead focus on their overall market proposition and how they position themselves.
It would enable you to figure out what works for them, where they fall short, and the opportunities that you can seize to get ahead of them.
2. Decode current trends
The next tool to focus on is key trends currently.
You can use tools like Google Trends to understand if the demand for the product/service is consistent/increasing/decreasing. For this, you can use different timeframes to better gauge the shifts in the market and accordingly use them to anticipate future trends and how you can benefit from them.
Not to forget, it is great that you are using the current trends to gain traction, but make sure your business has a stable and robust foundation to keep it floating even when you miss out on specific trends.
3. Establish an ideal customer profile
Ecommerce market research is about developing customer personas. Every business has a target audience. The faster you understand who they are and what they prefer, the better you get at marketing.
So, once you have completed your preliminary or secondary research and are convinced of the product/service viability, the next step is to develop a detailed ideal customer profile. Online surveys focus groups, interviews, social listening, and more.
Congregating all the data generated carefully and using it to develop buyer personas would bode well for the ecommerce brand.
4. Keyword research
Keyword research is a good start if you want to understand your potential customers. It also helps you know if there is a demand for the product/service you want to sell.
While high search volumes on search engines are an excellent place to start, it is not always a direct indicator of the demand surrounding the offering. But you can use it for SEO purposes, reach new markets, and enable people to find your offerings.
If you are short on budget, you can use tools like Ubersuggest and Google Keyword Planner that are free to use and get the basics right. But if you are looking for granular and more in-depth ecommerce market research reports, you will have to resort to paid options, such as SEMRush and Ahrefs.
5. Use the power of social listening
Social listening is an underrated tool for ecommerce marketing.
While many people think it is the same as social media marketing, social listening is anything but that. With social listening, you can look for relevant conversations all over the web, such as on a social media site like Facebook or a public forum, and analyze the underlying emotions that drive them.
These conversations can be pertaining to a specific keyword, your products or services, or your customer experience.
You can even perform competitor analysis with social listening. This will enable you to understand what they are up to and how they are using the plethora of marketing mediums to gain traction.
6. Utilize customer feedback for strategy building
Once you have collected the relevant results with the help of social listening and other methodologies, the next step is to use them for building your marketing strategies.
Pay attention to the overall vibe of the feedback to understand customer emotions and accordingly develop plans that are best suited to cater to these responses.
7. Run analytics on the ecommerce site
When you have a retail website that accounts for some of your ecommerce market share, you can also use it to generate vita insights pertaining to your business and its target audience.
For this, you can plug paid software, or you can use Google Analytics to build a rough idea of your visitors’ behavior when they are on your site.
These analytics would help you develop actionable insights that can help you supercharge the overall customer experience.
8. Utilize SEO tools
SEO tools are an effective way to garner deep insights pertaining to your ecommerce marketing strategy in play and how your customer base responds to it.
These tools are multidimensional and allow you to embark on competitor research by understanding the keywords they are targeting and ranking for.
In addition, paid SEO tools churn out full-fledged reports that point out what you are doing right and areas that require work. All of these helps amplify your ecommerce market research strategies and make them more conducive to generating significant results.
The key purposes of ecommerce market research are to analyze the industry, understand your customer behavior, and figure out what your competition is up to.
While we can feel that we know the nerves of our customers and that we have built the perfect offering to cater to their needs, it is always safe to test the waters before making the final move.
Given the plethora of excellent tools on offer today, most of the ecommerce market research responsibilities have shifted to them. They perform the bulk of the work and give us actionable insights which we can use to improve traction and gain a wider audience. Reach out to us at &makers for more queries on ecommerce market research.