To expand, e-commerce companies aim to go beyond their backyards. But stepping into a new market is easier said than done. Quality products, a robust operating model, and a talented team are not enough to ensure a successful expansion. Setting up a shop in a new market also requires market research, involving user surveys, focus groups, product testing, and other techniques.
Here’s a drill down on why it practically tops the list.
Improving Customer Understanding and Segmentation
Who is your target market in the new location you plan to expand to? Young women between 22 and 30? Newly married couples living in large metropolitan cities? Your brand’s success in this new market depends on answering such questions and knowing who will find your products appealing to buy. By identifying your target market, you can take steps to ensure that your products appeal to these buyers and get them to open their wallets to your brand. For this, you need market research.
As important as market research is, you must also focus on market segments. So, regardless of your broad target market, you should segment them further based on factors like income, location, employment history, etc. The only way to unpack which segment prefers a particular product and why is to conduct market research.
To Reveal the Competitive and Supply Chain Landscape
Your business may have a solid competitive position at home but the same may not be true in a new market. In a new space, there may be other more established players who have been around for a while and understand what their customers want. All of them could pose a threat to your business and minimize its chances of success.
Market research helps you get the pulse of the competitive landscape. You will be able to gauge the number of potential competitors and their power and assess how your brand stacks up against them. You can then use these insights to decide whether you want to expand, and if so, how, when, and where. For instance, you may find that a particular city is already saturated with similar products. In this case, you could make a strategic decision to expand into a different town to give yourself a better chance of reaching your target audience and beating the competition.
A strong supply chain is invaluable for e-commerce businesses. Regardless of which market you operate in, it’s not enough to just have a significant or unique product. To get this product to the market, you also need to nurture a network of suppliers, vendors, distributors, fulfillment partners, inventory management vendors, and last-mile delivery partners. To identify and understand these entities in the new market, you need market research.
To Inform Product Differentiation and Guide Marketing
Market research can help you see how your brand and its products are perceived in the target market and judge the interest and enthusiasm of potential consumers. You can better understand whether your offerings will fly in the new market and when it does, whether the customers will find them more appealing than the others.
You may even uncover some opinions that you were not previously aware of and understand whether customers hold these same opinions about your competitors. Equally important, you will be able to evaluate what your competitors are doing to attract, convert, and retain customers to inform your own acquisition and retention strategies.
Market research is also vital to developing and implementing a successful marketing plan for your new venture. Once you get a good handle on your target market and competitive landscape and have a product differentiation strategy, you can think about how to communicate the unique qualities of your brand.
The insights revealed by market research can help you design a strong value proposition to make your product more attractive to your audience, highlight its distinct features, and take action to improve, upgrade, and differentiate your offerings. You can tweak your marketing messages and advertising campaigns so consumers can see exactly what value they can get from your products.
Market Research and E-commerce Brand Aggregators
Now you know why market research is the vital first step to e-commerce expansion. But what if you lack the resources to conduct market research in-house or the funds to outsource the effort to an agency? Here’s where a brand aggregator like Ergode can help.
E-commerce brand aggregators bring advanced expertise to operate e-commerce businesses in different markets. They conduct market research to understand a target market, its competitive landscape, supply chain ecosystem, and regulatory environment. They also manage your company’s branding, marketing, and advertising and explore ways to improve customer engagement and build strong customer relationships. In effect, they do all the heavy lifting to prepare you before you step into an unfamiliar market.
Conclusion
In sum, market research can help you approach a new market with confidence. It will provide an accurate view of the marketplace, show your customers and competitors, and reveal how prospects view your products and business. If your goal is to expand the boundaries of your e-commerce business, do market research.
Our expertise lies in increasing the base of e-commerce brands and helping them grow. Contact us if you have plans to expand your business into a new country or a region. Let’s discuss your needs and figure out how to get your e-commerce business closer to its expansion goals.
