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Ecommerce Customer Research

Ecommerce Customer Research

Why carry out Ecommerce Customer Research? What are the Key Variables Involved in it?

Ecommerce Customer Research is an attempt to understand customers and consumer behaviour who engage in the eCommerce/online shopping journey. For eCommerce entrepreneurs, a pertinent question that they have to answer all the time is – what do customers in eCommerce want? But before they are in a position to answer it, they need to first know about their customers. For instance, if you own an online premium sports shoe brand, it is relevant for you to know the income levels in the target market, the popularity of sports in the region, the availability of sports training facilities, etc. ECommerce Customer Research helps online businesses gain meaningful and relevant insights into their target groups in the target markets.

In this blog, we shall emphasise the key variables involved in eCommerce customer research.

Language-based Grouping

Some poets say that silence is the best language; the rest are all noises. Momentarily, we disagree, especially when it comes to understanding customers better. The languages used by customers play a pivotal role in reaching out and appealing to them. For example, if English is not a popular language in a region, trying to communicate with customers in the English language will be less effective. And that is, to say the least. It may be even taken as an offence. The popular languages must find a priority in web stores, shopping apps, customer support, digital marketing campaigns, press releases, etc. Given below is a snapshot of an eCommerce customer research carried out by YRC depicting language-based clustering of online audiences (social media handles) for a group of competitors in a region.

Visual 01

Household Income-based Grouping

Having a fair assessment of the prevailing income levels in a region is helpful for businesses in focusing their merchandising efforts and making their pricing strategies more competitive. In the social media research snapshot below, it could be seen that a majority of households fall in the gross income category of 10-75k. That is a fairly big range. Bear in mind that this is not disposable income. But it provides ample hint that the market has an appetite for a product line with a varied price range. For example, there are many hand sanitiser brands in the online market space. If we consider the data shared in the visual, then, in this case, it could be said with a high degree of certainty that products will be available at a wide range of price points.

Visual 02

Geographical Clustering

In social media geographical clustering, audience users are classified based on countries, states, and cities. For instance, if you are intending to sell smartwatches in another region, it is relevant for you to ask about the activity levels of audiences on various social media handles of your competitors. For example, if a majority of the competing brands have strong social media traction in that region, it would not be difficult for you to gauge that their products and services are popular over there. On the other hand, it is also possible that only one brand is enjoying high popularity or none are. Geographical analyses give you a fair idea of how your competitors are faring in the selected markets. Take a look at the visual below for a quick grasp.

Visual 03

Ethnicity-based Classification

Ethnicity is a critical demographic factor reflecting the long-held cultural and social values. These values have a certain degree of bearing on consumer behaviour. For eCommerce businesses, the key takeaways from ethnicity-based classifications are the major dos and don’ts. Now, for example, eCommerce businesses can initiate promotional campaigns during festival seasons. At the same time, they can also align their marketing and promotional activities with the values and sentiments of the local population. On the other hand, not knowing the cultural and social values and trends in the targeted market regions could end up with wrong demand assessments and merchandising decisions, ineffective advertising, misplaced PR activities, etc. The visual below shows an ethnicity-based grouping in a selected market region.

Visual 04

Grouping based on Age, Gender, and Literacy

Knowing the distribution of age, gender, and literacy rates in the target group helps eCommerce businesses in multiple ways. At the onset, they could directly comprehend whether and which of their products have potentially interested customers in the market. It also becomes easier for them to formulate their marketing strategies encompassing merchandising, pricing, digital marketing, distribution channel, etc. The visual depicts relevant insights for an eCommerce brand whose target group comprises females in the age group of 18-45 years.

Visual 05

Now, the brand wants to find out if social media could be harnessed to promote and sell its products in four selected countries. ECommerce customer research deduces that a large segment of the target group is present on popular social media platforms. This combined with other encircling positives – a very high percentage of the total female population in the age group of 18-45 years, high literacy rates indicating greater independence and higher participation of women in the society and workforce, and nearly half of the total female population in the given age group are online shoppers, indicates at the presence of a strong market for the eCommerce brand.

Grouping based on Preference for Payment Methods

Different customers have different preferences for payment methods. Some customers are okay with all methods. Some are averse to using credit cards. Some prefer masked payment methods like the UPI in India where the payment ID is only a mobile number followed by a three or four-letter domain name. The way customers could prioritise and choose a payment method could be nearly endless. In the bigger picture, these preferences can be clubbed, classified, and segregated for different regions, states, or countries. For example, in the visual below, Cash on Delivery is the most preferred form of payment in the UAE as compared to the other three countries.

Visual 06

If an eCommerce brand is targeting the UAE market, it should develop strong cash collection and remitting systems at the local levels. Qatar, on the other hand, reflects a contrasting picture. Customers here show more trust in online payment methods. This proportion between online and offline payment method preference has a bearing on working capital management and short-term payment policies and obligations of a company.

Digital Behaviour

Digital behaviour could be treated as a subsection of consumer behaviour. It can cover consumer or target audience behaviour pertaining to social media usage, online product/service search activities, the inclination for online shopping, online payment preferences, and any other behavioural trait that involves a digital medium or touchpoint in the shopping journey. The chart below shows various aspects of the digital behaviour of a target group.

Visual 07

The third quadrant represents social media usage statistics in four countries, say countries A to D, each with a unique colour highlight. Multiple insights are available from this data set. For instance, if the target region is country A (highlighted in brown), YouTube has the highest penetration. That makes the platform suitable for targeted advertising. In the second quadrant, we have the statistics on the popularity of various messenger apps. The fourth quadrant shows a more specific data set of female social media users. And Snapchat emerges as the most popular social media platform for the target group in all the four countries. Coming to the first quadrant, here we have the data set on the target group with readiness for online payment.  An important insight from this data is that the percentage of women having credit cards is proportionate to the percentage of women making online transactions in the four countries.

Determination of the Target Group’s Buying Behaviour

An important outcome of eCommerce customer research is that it should enable you to identify and segregate your target groups into the four broad buying behaviour types that are:

Visual 08

A detailed and objective eCommerce customer research provides everything that is required to define the buying behaviour of the target group with a refined understanding of your customers and their shopping/buying behaviour. But to be able to derive the required insights, expert planning and implementation are required with the use of the right eCommerce market research tools and methodologies with a holistic and strategic approach. 

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Author Bio

Nikhil Agarwal

Nikhil Agarwal

Chief Growth Officer

Nikhil is a calm and composed individual who has a master’s degree in international business and finance from the United Kingdom. Nikhil Agarwal has worked with 300+ retail e-commerce brands and companies from various sectors, since 2012, to define their growth strategy and achieve operational excellence. Nikhil & his team have remarkable success stories of helping brands achieve 10X growth.

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    PROCESS AUTOMATION

    The idea of having Ecommerce Consultants on-board from the beginning itself points towards reducing the involvement of the promoters in daily operations. Ecommerce Businesses willing to be a brand reaping profits & sustaining the competition must ensure that most of their processes should be automated. The more the manual intervention, the more would be the errors.

    In Ecommerce business, you get only 1 chance to impress the customer & if you mess up there, you lose the customer for long.

    Process automation in respect to all the activities pertaining to customers from order receiving to order fulfilment is a must for a seamless experience for the customers.

    Task Management is another grey area where most deadlines fail as 90% of the tasks are assigned manually & are forgotten, unheard, misunderstood or mistaken.

    YRC Team of Ecommerce Management Consultants helps to make maximum of the processes system-driven to ensure minimalistic manual intervention.

    VIDEOGRAPHY & PHOTOGRAPHY

    No matter how good your product is, the customer would know only if it looks good.

    Photography includes the following steps:

    • Cataloguing your products
    • Cataloguing your images
    • Backup your images (A few cloud storage solutions include Dropbox, Google Drive, Bitcasa, Apple’s Cloud Storage etc.)
    • Choose the right camera & lens (You may also outsource the photography to a third party agency)

    DIGITAL MARKETING

    Digital Marketing includes SEO & SMM. SEO i.e. Search Engine Optimization includes activities like back-linking, meta tags, blog-writing etc. to ensure your website ranks on the 1st page on Google Search.

    Next comes SMM i.e. “Social Media Marketing” which as the name suggests including promoting your products on all the social media sites, email marketing, influencer marketing & several other BTL activities.

    These activities are going to be recurring & would decide the traffic on the website, the conversions, whether the right target market is tapped, the likes, the views, the orders, the reviews & much more. YRCs Ecommerce Consultants create a budget for digital marketing right from pre-launch to launch & for each month thereafter.

    Building digital marketing strategies in coordination with the agency, selecting them to signing them off would be the role of YRC.

    This ensures seamless coordination, detailed interactions & desired execution as it is always advisable to work with a single agency than multiple of them.

    IT INTEGRATION

    Selection of the right software for smooth functioning of back-end operations right from production to webstore display would be suggested and integrated by YRC Team.

    YRC’s Team defines SOPs of Product Movement, maps it with the locations & people. They then create a blueprint of all the features required in the software & help in shortlisting & selection.

    IT Integration involves connecting your offline inventories with real-time online webstore so when a sale occurs, inventories get deducted real time across offline as well as online platforms.

    This helps in accurate inventory management, maintaining the MOQs, re-order levels & achieving the optimum inventory levels.

    Some popular software include unicommerce, viniculum for your front-end website management & Genisys for your entire back-end Purchase, Production, Accounting, Invoicing etc. management.

    WAREHOUSE & LOGISTICS PLANNING

    • How many cities or countries you wish to sell in?
    • Where should your Warehouse be located?
    • Should you have one warehouse in each country or city?
    • Should you be having your own delivery team in your base city?
    • Would the 3rd party vendors be reliable? What happens when they lose or misplace your product during delivery?
    • How should I manage the logistics if my goods are coming from different countries?
    • How should the goods be stored and barcoded?
    • How much space do I require for warehouse?
    • I am sure several such questions must be haunting you while you think of starting your own fashion ecommerce brand.

     

    At YRC, our warehousing and logistics experts can help you devise a strategy for all of the above mentioned queries and much more.

    We design the layout of the Warehouse considering the inward, goods processing, software entry, barcoding, outward, goods return, scrap storage, goods stacking & much more.

    Logistics route plan is devised considering the manufacturer to your warehouse and from there to last mile delivery locations.

    UI & UX DESIGNING

    This Step involves 03 distinct parts:

    Part 1: Choosing the right Platform:

    From several platforms available in the market right from Shopify to magento, woocommerce, prestoshop, wordpress etc. you must choose the one that fits best for your business

    Part 2: UX Designing:

    “UX” denotes User Experience, which if put in simple language is building the functional requirements of the website.

    UX Designing includes designing the features required in the website, customer journey map, website features, the browsing features, navigation features, ecommerce order management process flow, checkout cart features, catalogue management, ecommerce payment system, cross selling features & much more.

    “As per statistics, 68% of the customers abandon the carts before payment”

    An interesting UX ensures the customer sticks on to the website for a longer time.

    Part 3: UI Designing:

    UI stands for User Interface, which means designing the look and feel of the website. UI includes using the right colours, elements and the entire aesthetics of the website.

    A good User Interface ensures the user completes the task that he has come for. It navigates the user through the journey of the brand in the simplest but most effective way.

    The UX designer maps out the bare bones of the user journey; the UI designer then fills it in with visual and interactive elements.

    If User experience is the bare bone, user interface wraps it up with an attractive cape.

    At YRC, our team if experts can help you develop the entire User Journey to ensure it is engaging!

    SAMPLING & PRODUCTION

    This step follows the “Designing” Phase, whether you have an in-house design team, freelance designers or an outsourced design company. It is one of the most exciting phases, as here you see your designs turning into products & your ideas turning into reality.

    In most start-up cases, production is outsourced i.e. brands tie-up with the established manufacturers/ job-workers to get their products manufactured.

    Sampling involves multiple 04 Stages, Fit-Sample, Prototype Sample, Pre-Production Sample & the Production Sample.

    Prototype Sample is the first sample provided to the buyer. It can be in any fabric/ colour. This sample is just to understand whether the product design looks equally great in reality.

    Fit Sample, as the name suggests is prepared to check the fit of the garment i.e. the various sizes, length, width etc.

    Pre-production is made by the actual production line. Here the stitching quality and other aspects related to manufacturing are checked. This is the last stage where rejection can be accepted.

    Production Sample is made before the production which is the replica of what is going to be finally produced.

    Once you are through with all this, you are good to go ahead & get your goods manufactured.

    PRODUCT DESIGNING / SOURCING

    Product Designing or Sourcing is the heart of the Ecommerce Fashion Brand.

    Product Designing / Sourcing can be done in several ways, as follows:

    • In-house Design Team
    • Freelance Designers
    • Outsourced Design Team
    • Ready Product Sourcing (From Manufacturer or Wholesaler)

    At YRC, we evaluate your business strategy & business model to arrive at the decision, which of the above ways would be best-fit for your business. In certain cases, product sourcing may be a combination of the above.

    These are the people who are going to build your brand! Whether they are the designers or merchandiser, your brand look is going to be in their hands.

    If you are designing each garment from the scratch, the sourcing would play crucial role in developing design identity of your brand.

    Sourcing includes fabric, trims, lining & all the raw material required to build the garment.

    BRANDING

    Branding is the “Look of the Brand”, right from logo to tagline, the colours used, the brand story, the brand communications on social media, the packaging & all the other aspects which speak directly or indirectly to the customers. Branding constitutes the look & feel of the brand & hence must be thoughtfully planned to match with the product that we are selling.

    Branding must appeal to our target audience. Example : A golden colour logo depicting finesse, art, richness, premium, however beautiful it may be individually cannot go with a brand selling affordable kids wear products. So, your logo must be in-line with your brand positioning, whether you are an expensive brand or a luxury brand or a value for money brand, it must be depicted from your “Branding”.

    It is an integral part to attract the target audience.

    ORGANOGRAMS & SOP’s

    Organogram is the “HR Blueprint” of the business which is created at the onset, to map out the team required across each function at various stages of the business. At the launch, only key people need to be got on board to ensure the project gets started & at this stage, all of them need to multi-task. Similarly, certain financial as well as operational goals are set for addition of the further team. Example, for the operations team, we hire 1 operations manager during the pre-launch phase & we add 1 more only when the business kicks-off & we reach a volume of selling more than 1000 pcs/ month or a turnover of more than 0.1 million USD.

    SOPs are Standard Operating Procedures, a bible to run the entire organization right from Sales, Purchase, HR, Order receiving to Order fulfilment, Inventory Management, Accounts, Warehouse, Logistics, Supply Chain, Production & all the other relevant functions for the business. Business must be organized from its first day of operations; only then the tasks can be delegated.

    At YRC, we design the organization structure, the processes, and approximate time taken to execute each process, job profile of every member within the organization, their KRAs, KPIs & the Reporting Structure.

    CRITICAL PATHWAY

    Critical Pathway Analysis (CPA), is a project management technique which cannot be overlooked while launching an ecommerce fashion brand. Brand launch process is cumbersome with multiple inter-dependent & time-bound tasks involved, which need to be tracked to ensure the project remains on track.

    CPA outlines key tasks across the project, their turnaround time (TAT) & the dependencies of tasks upon each other. It identifies the sequence of tasks, their interdependent steps from inception to completion, their criticalities, and their dates of onset, target dates of completion along with the key responsible person for the respective activities. Critical Pathway helps in understanding the unimportant & not urgent tasks which may jeopardize the execution of the project because of an unexpected snag! It also maps out the potential bottlenecks which might be posed because of the dependencies of tasks upon each other & cases where the next task cannot be commenced before the completion of the previous one.

    CPA detects the minimum & the maximum time involvement of a particular individual or team to execute the task, thereby arriving at the overall deadlines associated with the project.

    At Your Retail Coach, we design the Critical Pathway & review it periodically to ensure the project is on track & the progress is measurable.

    BUSINESS STRATEGY & BUSINESS PLAN

    Business Strategy includes the vision, mission, goals, business model, business plan & strategy for all the functions within the organization.

    Business Strategy is a well-defined plan that outlines who, what, where, why, how & when for the company; for example, who would be the target market, how to attract the target audience, when to launch new products, where to operate from, how to handle competitors, what would be the USP, what would be long term goal of the organization & several other answers to the 5Ws of Strategy.

    Business Strategy aligns the organization towards a common goal. Business SWOT helps company to identify & overcome their weaknesses & focus to sharpen the strengths. Business strategy forecasts future risks and helps business in building skillsets to overcome the potential threats.

    YRC’s Business Plan focuses on creating a “Blueprint” of the business, thereby deriving the feasibility of the concept & gauge whether the opportunity is lucrative to invest time, energy & effort. Business Plan creates cash flow understanding i.e. building inflow & outflow cash projections from Week zero to week 60 i.e. 05 year projection. Business Plan calculates the capital investment, operating costs, one-time costs, recurring costs & all the other numbers relevant to obtain the breakeven sales, return on investment, return on capital, internal rate of return & several other ratios. Business Plan is also one of the important requirements if you are targeting the “Investor Route”. Fund raising becomes extremely transparent & channelized. With business plan panned out clearly, the business will know until what point must it be stretched & where to stop, which reduces the probability of unplanned investments.

    MARKET RESEARCH

    Starting the concept of Ecommerce Fashion brand with Market Research ensures we get detailed understanding of the industry & this research report also acts as a social confirmation for your concept. Market Research helps in understanding the target locations, their population, potential online buyers for your product, competitors for each category, and top selling products of the competitors, competitors’ price range, offers & their responses & much more. Market Research helps in thorough understanding of your brand position as compared to our competitors. It helps in identifying gaps in the market, in your category along with the scope of the said product in the desired market. This will help in validation of your concept & prevents you from making the same mistakes as your fellow brands, eventually saving your time, energy & efforts. This phase is also a make or a break phase, as the market research study may at-times come up with some eye-popping numbers & statistics which might compel you to re-think on your product or category that you are planning to sell or alter your entire concept itself!! Market Research Reports analyse the competitors’ webstore for their traffic, conversion & sales. This is extremely valuable information to derive our inventory budgets & projections, which takes us to our next phase.