HOW TO MAKE AN EFFECTIVE MARKET RESEARCH part 1

Before you invest a lot of money on your online store, market research (figuring out what to sell online) is a much more involved process than most people think it is. You can’t just pick something based on a couple of criteria and go with it. You need to understand things like basic keyword research, competitive pricing, competitive SEO research and more. 

One of the things you need to understand are the potential Points of Failure of a product line in Ecommerce; reasons why a product might or might NOT be a good idea to sell online. 

Something you need to do before you do any other Market Research when choosing what to sell online, is to assess whether or not that product is likely to actually sell online. 

The simple fact is that some products just don’t sell well online, for a variety of reasons. “Qualifying” a product is what we do to figure out whether it will sell well online or not, BEFORE we spend time researching the product in depth. 

To Qualify a product, we look at two things: Demographics, and Points of Failure. 

Read: HOW TO RESEARCH A COMPETITOR

Understanding the Demographic

Understanding the product’s likely Demographic is the first thing we do in the Qualification process. 

The word “Demographic” simply means “Statistical characteristics of a population”. In Ecommerce marketing, when we say “Demographics, we are referring to the characteristics of the people who might buy what we’re selling. Some of those characteristics are Gender, Age, Income, Location, Career, Home Ownership/Rental, etc. Having a good idea what these things are helps us decide what other characteristics they might have. 

For example, older people are more likely to be homeowners, likely to be more financially stable and are likely to be able to afford more expensive purchases. They’re good candidates for higher quality, more traditional products. 

Younger people are more likely to follow popular trends but tend to have less money, so they’re better candidates for slightly less expensive but trendier products. 

There are products that cut across multiple demographics to some degree or other, and products that are very specifically targeted to just one particular set of demographics. 

Forming a picture in your mind as to who might buy the product you’re thinking about selling is extremely important, as you’ll see.

Points of Failure

Points of Failure are reasons why a product simply doesn’t lend itself well to selling online.

We need to Qualify our potential product choices using some Demographic assumptions, and the 5 most common Points of Failure are:

*Market Segment

*Size

*Integration

*Visualization

*Urgency

Allow me to take you through these Points of Failure and explain what they basically mean. 

Market Segment

For our purposes, we’re concerned with three potential market segments. Which are Consumer, Prosumer and Professional products.

Size

This refers to a product’s actual physical weight and dimensions. For example, products that weigh more than 150 pounds (68Kg) are over the standard UPS, FedEx and USPS shipping limits and have to be sent using special delivery methods. 

Those special delivery methods (Motor Freight, LTL [Less Than Truckload], etc.) are more expensive, and their pricing changes weekly as fuel prices fluctuate. This makes it impossible to provide your customers with standard shipping rates, and that causes problems with customer service and sales.

Integration

Integration refers to whether a product is a complete product in itself, or if it is a component that has to be integrated with other components from other sources in order to function. 

For example, a BBQ Grill is a complete product in itself, and can be sold without worrying about potential Integration. However, outdoor BBQ grill components that are designed to be built into a brick BBQ enclosure are not complete products in and of themselves. Somebody has to build the brick enclosure and integrate the components into the enclosure in order for the BBQ to be used.

Visualization

There are products that people are willing to buy without seeing and touching them, and there are products that people are not willing to buy without doing those things. 

For example, it’s very difficult to sell Wedding Rings online. The Bride and Groom want to see the rings, inspect the jewels, try them on, have them sized, etc.

 If a consumer can easily visualize the product and doesn't feel like they need to see and touch it physically before buying, that product doesn't have a Visualization problem. Otherwise, it does, and is not a good candidate to sell online.

Urgency

There are products that people are willing to wait for, and there are products that people feel they need RIGHT NOW (Urgent Need). 

There are also situations in which a single product can be both Urgent, and Non-Urgent. That depends on the consumer’s frame of mind at the time of the need. The best potential products are those that don’t generally associate at all with a sense of Urgency. 

Understanding who is likely to buy the product (the Demographic) goes a long way toward telling us which, if any, of these Points of Failure might apply, and whether they apply enough to decide against selling the product online.

Read: HOW TO MAKE AN EFFECTIVE MARKET RESEARCH part 2

Credit to worldwidebrands.com