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What is eCommerce Demand Research?

Imagine that a businesswoman from South Africa wants to sell her beauty and personal care products in the GCC market via the eCommerce route. But she is not sure which regional market in the GCC she should target. The selected market must meet the required demand volumes and the market share she expects her brand to capture. Demand analysis can provide her answers to these questions.

Ecommerce demand research is ascertaining the demand levels of a product category and its variants in a market/region with an emphasis on the online behaviour of customers. From the example used above, remember that the businesswoman does not have a presence in the GCC market. She does not possess any business data of her own to carry out demand analysis. Therefore, she is reliant on external data for demand research.

In this blog on online market research, we shall examine the important elements of demand analysis for eCommerce. The focus will be on drawing and deducing conclusive materials for business decision-making.

Drawing Insights from eCommerce Demand Research

Demand analysis is not an alien term. But before carrying out a demand analysis, the objectives must be put forth. These objectives determine what we want in the outcome i.e. research reports. The second prerogative is to be able to analyse and read these reports accurately and relevantly.

Product Category Demand Analysis

The product category demand analysis is a reflection of how products within a particular category are sought by people in one or more regions. This is based on curated search volumes. It gives clues as to the overall demand sentiments for a product/product category. For example, the demand for umbrellas and raincoats is higher in regions that receive relatively more rainfall than in rain-scanty regions. The visual below shows the search volumes of beauty and personal care products in four GCC countries. These numbers may not immediately translate into demand but provide strong clues for further planning, formulation, and decision-making.

From the chart, it could be easily read that the UAE has the largest search volumes for beauty and personal care products and Kuwait with the lowest among the four countries. This gives some macro answers. Should you target the UAE market or Kuwait? These are simple statistics but significant enough to steer the course of your business. And if you select a market from this data for further evaluation, it also gives you the numbers that help you decide if the market is big enough for venturing into. Of course, you cannot determine the micro aspects from this data set alone. This data is a composite of all the products in the beauty and personal care product category. You may be dealing in a product type (say skincare) that has very low popularity in these countries. The next data point will provide you further with insights into the market demand.

Product Type Demand Analysis

In Product Type Demand Analysis, we take into consideration the demand search popularity of the different product types. This analysis is specifically useful for businesses with deep and wide product mixes. The data gives them enough insights to formulate their product-market strategies. However, if they are aiming for niche-building or targeting an intensely competitive market, further research becomes necessary. Coming back, the chart below shows the search analysis of ten product types (including skincare) in the four GCC countries.

Because you are dealing with skincare products, it is natural for you to notice that the UAE has again emerged as a promising market. The country has the highest search volumes for skincare products beating the other three states. But even within skincare products, there could be many subtypes. Let us say that your lifting & firming product has a strong value proposition for the Middle East region that made you turn towards it. But from this data set alone, the popularity of lifting & firming products could not be ascertained. For instance, Kuwait has a search volume of 2730 for skincare products and the same figure for Saudi Arabia is 10,000. Does it mean Saudi Arabia is a better market for your business? These numbers do not shed light on the popularity of the product subtypes under skincare. And in your case, you cannot precisely gauge the popularity of lifting & firming products in the given countries from this data. But the next set of data would be much more conclusive.

Product Subtype Demand Analysis

Product subtype demand analysis is the data filter set that shows the demand search popularity of a particular subtype of product within a product type. The visual below shows the break-up of the search volume data of the lifting & firming product across the four GCC countries.

If you look at the data on “lifting & firming” product, you can see that Qatar has the highest search volume. If you had considered only the Product Category Demand Analysis or Product Type Demand Analysis, you might have mistakenly concluded that the UAE is your best market because it has the highest search volumes for beauty and personal care products. But because of the Product Subtype Demand Analysis, now you know that your “lifting & firming” product has higher chances of success in Qatar. Similarly, if there is a face-peeling product in your product mix, then Saudi Arabia would be your ideal target market.

The statistics from product subtype demand analysis also help businesses shape many of their strategies and decisions. Once the demand cues are available, it becomes easier to ascertain the direction of the decisions pertaining to distribution, inventory allocation, warehousing, team structuring, digital marketing efforts, etc. For example, if the search volumes are less than 100 in a given period, for such quantities, you may consider hiring 3PL services instead of having a fulfilment setup of your own. Also, in this case, your digital marketing has to be more focused because the size of the audience is small.

Per Capita Spend Analysis

Even though search volume-based demand analysis is a good indicator of market potential, it cannot be directly construed that search necessarily leads to purchase. Demand analysis followed by purchase/spend analysis is a more confidence-boosting measure in eCommerce demand research. Given below are the statistics for average per capita eCommerce spending per year in the four GCC countries.

Continuing from the previous analyses where Qatar emerged as the best market for lifting & firming products, we will carry forward the assessment with these points in focus. Like in most of the macro parameters, the UAE has the highest per capita spending on eCommerce followed by Qatar, Saudi Arabia, and Kuwait. Although Qatar has a better per capita income than UAE the latter outperforms Qatar when it comes to per capita eCommerce spending.  One plausible reason for this is that the UAE’s eCommerce market is many times larger than that of Qatar. In terms of population, Qatar is only a third of the UAE and a tenth of Saudi Arabia. Qatar appears to be a relatively smaller market but consumers here exhibit strong spending habits – second to the UAE. The demand volumes are likely to remain relatively low. But it is a good market entry point with the need for long-term focus on the markets in the UAE and Kuwait. For considering Saudi Arabia, a lot will depend on further demand research going into the future.

The potential of a market is reflected in its demand levels. And the demand levels are reflected in the existing and predictable consumer behaviour. For an eCommerce brand, an important element of this consumer behaviour is search analytics. In this blog, we saw how search-based demand assessment can help eCommerce businesses zero in on evaluating a target market using the right eCommerce market research tools and methodologies. Demand research combined with consumer research and competitor research can provide extensive details and insights into a market. These insights help eCommerce businesses in market evaluation and selection, market entry and other marketing strategies.

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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.