E-Commerce Market Research – How to Conduct it?
Would you self-medicate without knowing what disease you have? Let’s go a little further… Would you enter an operating room without having a diagnosis? Then why do you think you are going to set up a successful online store without having done simple market research or a feasibility analysis on the Internet?
In this article, we will explain which are the variables that you should analyze about your digital market before launching into the e-commerce adventure.
Traditionally (in the offline world), doing a quick survey of your market and competition is something “relatively” simple. Being a marketer at essaywriter.nyc, I suggest to take for example a physical store; if you spend a day at the door of it, you can get an idea of what is the typical profile of the customer who visits it (age, sex, purchasing level …), the number of visitors it has and what percentage buy; at what times there is more influx of visitors, etc… In a quick way, you can perform competitive monitoring that allows you to draw conclusions about the viability of that store.
On the Internet these kinds of things are not so obvious, online stores that seem obsolete and, a priori, easy rivals, can have unsuspected levels of traffic that generate a high volume of turnover. So it is important to analyze a number of variables that we list below:
It is possible that the people who look for you on the Internet are different from those who go to your physical store. It is advisable to know these kinds of variations for further marketing or promotional actions or simply to know your universe and create a representative sample of it in future opinion studies.
On the Internet, it is not only the characteristics of buyers that matter but also what they search for and how they search for it. Carefully analyze the products you are going to sell, the brands, and the sector in which you operate. If you see declining trends across the board, it will almost certainly be a sector in decline. Take advantage of growing niches and detect seasonalities that will allow you to boost future advertising campaigns.
This factor is usually the most unknown and the one that most people who have the idea of setting up an online store get lost in. It is a key and decisive factor. It can happen that a person sets up, due to ignorance, an online store based on a very competitive keyword and in which it is difficult to be at the top of the search results (which means that the store will be very little visible to visitors) or even worse, and a keyword that has hardly any visits. If this were to happen, the desired or expected level of traffic would be slow to arrive (or may never arrive) and the viability of the online store would be jeopardized.
Needless to say, analyzing what your competitors do and how they do it is fundamental and unavoidable. This is where the dilemma arises for the vast majority of those unaccustomed to the Internet world: What do I analyze?
Quickly, take a look at the appearance and design of the online store. It will give you an idea of the amount of money invested. Take a look at whether it has been developed by an external agency outside the management of the store, or if the store is managed by the same people who developed it. If this is the case, it will almost certainly be managed by people who know their way around the Internet and digital marketing.
The most important factor in this section is undoubtedly the level of traffic coming to the store from your competitors. What percentage comes through search engines and what percentage comes through ads?
The more traffic, in theory, the higher the probability of sales. For an early-stage store, conversion rates (number of sales/number of visitors) of less than 1% are logical. As the store improves over time, it is logical to reach higher values of around 3%. We know of cases of up to 11% (a real barbarity). If the percentage of ad traffic is high, it is possible that your competitor’s online store has financial muscle, keep this in mind.
From there, look at other factors such as:
– Search Engine Optimization:
The better it is, the more investment in optimization your competitor will have had to make and their visits will be of higher quality. Perform a competitive watch on the pages pointing to him and the quality of those pages.
– Social networks:
Look at which social networks they are on and what their mobilization capacity is. The more followers on social networks, the more capacity to reach your target audience and, therefore, the easier it is to sell.
– Technologies used:
Does your competitor have a scalable technology to address the future? Analyze if they use open-source solutions such as Magento or Prestashop or if their e-commerce belongs to a proprietary solution. We recommend open solutions so that you don’t have to depend on the technology provider at the operational level.
A thorough competitor analysis should not underestimate the quality of the competitors’ content. A quality blog, with constant updates that provides value to visitors, is a very good way to attract and retain visitors, do not forget it if you want to set up a successful online store.
In principle and without going into specific details, these are the key indicators that a person who is thinking of setting up an online business should evaluate to study its viability of it.
Why is it so important to analyze the competition for e-commerce?
The market analysis benefits us in the sales strategy in three basic points. Customers, competition, and e-commerce itself. The study of the online market is important because it provides us with information that will serve to guide Internet marketing strategies and define the objectives of the virtual store.
Who they are, what they buy, and when they buy. A market study will help us to identify our target or group of potential customers to whom we can direct our product catalog. Their age, gender, origin, buying habits, and tastes or preferences. This data will help us to segment the market we are targeting and with it, the marketing strategies of our e-commerce that we will carry out. Orienting ourselves with them to the target audience and not to the market in general. This will result in less effort, time and money.
The study of the competition allows us to know which strategies we should imitate. What good practices of our competitors we should implement in our online store. Of course, there will be many others that we would like to improve. The best way to do this is to put ourselves in the position of a customer and, once we have imitated all the positive aspects, think about what we as users would like to see differently. More images of the product, a faster delivery, a customer service telephone number to solve doubts. These are some of the ideas that we can put into practice after analyzing the e-commerce competition.
On the other hand, the study of the competition will avoid repeating the same mistakes that others have already made, improving our e-commerce management. If not only before the launch but also throughout the life of your e-commerce you keep a continuous analysis of your competition. You will avoid repeating many mistakes that they will make for you. Nor is it a matter of constantly monitoring everything they do and then copying it. It is enough to observe from time to time what their trend is. If they have made some kind of change and what has been the effect of it. Obviously, if the change has a positive impact, we can imitate it in our e-commerce. If not, we know what not to do. In addition, seeing the results of the competition, their strong points, their achievements, and their improvements will be the necessary impulse to turn into your e-commerce all your eagerness to improve,
Analyzing the information obtained in the market study allows us to minimize the risks in our own online business. Obviously, a market analysis is not something that lasts a lifetime. The market changes and evolves. Analyzing it on a regular basis will allow us to know and anticipate this evolution. Or at least not be left behind without even knowing why. On the other hand, carrying out a market study before the launch of our online store can save us not only trouble but also time and money. A market analysis that analyzes the e-commerce competition is essential to know how we can start positioning our online store and also do it in a more economical way. The analysis allows finding the keywords that will position the virtual store in a more efficient way and with a lower investment.