Today, understanding your customers is more important than ever. However, it’s hard to read their minds. Moreover, customers have more choices than ever before when it comes to their retail options. As a retailer, that means you must find out precisely what your position in the market is relative to your competition.
Just consider all the factors that come into play when customers make purchase decisions. People really do consider things like your return policy, your overall reputation, and how different you seem from others selling similar products.
If you’re just starting out and dipping your toes into the market, you can’t bet your success on guesswork or a gut feeling. You need to have hard data to back the decisions you make. That’s why we put together a quick list of three market research methods for retail companies that you can put into practice before you launch.
What is market research?
Before getting started, it’s a good idea to understand what constitutes market research. In essence, it’s research that you conduct directly with those most likely to be your customers. It allows you to acquire vital information about your industry as a whole and in-depth insight into what makes your target market tick.
Through market research, you can get thoughts, opinions, and other feedback that broaden your awareness and understanding of the societal, cultural, geographic, and socioeconomic makeup of your target customers. By conducting thorough market research, you can discover whether people even want the products you have to sell. If they do, you can get an understanding of how many people are likely to make a purchase and more.
With the above in mind, let’s talk about some market research methods you can employ.
This kind of market research is exactly what it sounds like. You send a survey to potential customers and get their feedback. You can administer a survey in a few different ways, such as:
- Send it in the mail (along with an envelope and postage that allows them to send you their response)
- Over the phone
- Email the survey to customers
- Use an online survey service
- Sit with customers and do the survey one-on-one
Remember that survey questions can be open-ended or close-ended. For example, you can ask open-ended questions and then allow customers to write out their answers in one or more paragraphs. In contrast, close-ended questions are usually answered through any of the following:
- Multiple choice
- Providing a “yes” or “no” answer
- Rating a scale
- Picking options placed on a grid (also known as a Matrix)
The truth is that there is a wide range of survey formats from which you can choose. You should carefully consider the format and the content of your questions to get the most relevant information from respondents possible.
Further, your questions should be clear and concise. They should not lead the respondent or coax any specific response.
Keep in mind that there are various tools and preformatted templates you can use online to help you create surveys. However, no rule says you must use them. You can also create surveys entirely from scratch.
Speaking directly with your potential customers can provide a wealth of knowledge. That’s what interviews are all about. This type of research is much more personal, and it allows you to communicate with respondents in a way that other types of market research don’t. For instance, you can ask a question, get a response, and then ask for clarification.
Open-ended questions work well with this format. Moreover, with an interview, you can dig deeper into individual questions to get at the heart of the matter.
On the flip side, interviews can also cost a lot, and they can be time-intensive. If you choose to use this method in your market research, be sure to plan ahead so that you can effectively allocate your resources.
It sounds terrible: Observation. You’re the researcher, while the subject under observation is the monkey in a zoo. The truth is that while this qualitative research method does share some similarities with the scenario just mentioned, those you’re observing aren’t animals in a cage.
In practice, this kind of research could be the researcher going to a retail store and simply observing the shopping behavior of those making purchases. Ideally, this type of research takes place over time, with the observer taking notes over the course of weeks and seasons.
A couple of downsides to this market research method are that you’ll rarely have control over the environment, and it can be time-intensive.
Market research never stops
The main factor in conducting market research for a retail business is remembering that it won’t ever end. It’s an ongoing process.
Remember that the market fluctuates. It evolves. It moves on. To keep from being left behind, you need to be on top of trends. You also need to update your offerings to stay ahead of the curve. With that said, consider what you want to achieve and the kind of information you need right now. Then, choose the market research method that’s most likely to supply you with it.
When done right, market research is well worth your time and effort.
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