Before starting any business, you should conduct a market research for your business idea. Business involves fierce competition and starting one without conducting a proper market research may give your competitors an advantage over you, diminishing your chances of success. There are many methods of conducting market research. However, it is advisable to use more than one method as this ensures that you have a more accurate picture of the market enabling you to make an informed decision. For an ecommerce business, you will need to conduct your market research both online and offline. Online market research will be critical because you are targeting online customers. Market research can be categorized as:
- Primary research
- Secondary research
Primary research involves collecting raw data from the source. It includes interviews, questionnaires, and surveys. You may conduct the research online through telephone or send questionnaires by email. Primary research is critical in gathering data through analysis of current sales as well as current practices. It also gives you information about your competition. To be effective, you must use open-ended questions. Closed questions suggest answers to the person you are soliciting information from making it impossible to get the true picture of the market.
In secondary research, your aim is to analyse already existing data. The purpose is to help you establish benchmarks, identify your competition and identify your possible target segment. You must have a target segment identified by such criteria as a lifestyle, age, class or behaviour.
In conducting market research, you should avoid the following mistakes:
Using only secondary research
secondary research is a good place to start. However, relying on it entirely will be disadvantageous because you may miss out on some facts relevant to your research especially where such data is outdated.
Using web resources alone
Using the web to conduct your research will give you the information that is available to everybody else. It may also fail to give you the exact information that would be essential for your research as it may be missing online. Online research should be complemented with other methods of research.
Surveying only people known to you
Surveying friends, family, and colleagues alone is not the best way of obtaining useful information. You need to survey real potential customers. This is not to say that your friends cannot be your customers but they may fall outside your target market segment.
Big Commerce provides detailed steps to follow if you decide to conduct a purely online market research. The main points include:
- Conducting a keyword research
- Finding the trends to putting the big picture into perspective
- Examining social media
- Building an online store to test the waters and gain momentum
- Leveraging on your network to get a temperature check
- Determining the scope of the competition