Vital to achieving success in e-commerce is selling products and identifying product-market fit. Whether that means specializing in a single product or owning a market niche, the challenge is the same: finding a product that satisfies a desire or need of an audience large enough to sustain a business. Coming up with product ideas is not easy, and that is only the first step. It's easy to get stuck and feel like every good idea has already been taken by the big retailers that dominate the search engines.
Some entrepreneurs have found success tackling this problem by going with their gut instinct, but the most confidence can be found in data, much of which is widely available if you know where to look. In pursuing a data driven approach, it makes sense to take an iterative approach towards building a product for a specific customer set.
- Google Adwords: This program goes beyond what the name suggests, revealing insights into what products businesses are paying to advertise at any given time, which keywords are generating the most searches among consumers, and how much money potential competitors are willing to pay for sponsored listings.
Adwords has a suite of helpful tools, but the one you’ll find most useful at this point is the Keyword Planner. Set up your free Adwords account to access the planner, then tinker with general words that pertain to your idea before getting more specific. For example, typing in “sweaters” will not only reveal that it is a popular term that women search for, the Keyword Planner will also make keyword suggestions that show different types of sweaters competitors are bidding on.
Analyzing this data can provide inspiration for a new or improved product. In addition, AdWords can also help determine the validity of an idea.
- Amazon Reviews: Gather inspiration from popular products that are already proven in one of the world’s largest marketplaces. Browse bestselling products and read both the positive and negative reviews. Can an improved product address pain points? Or can a product be simplified down to one “killer” feature?
Once there is inspiration for a product, it is important to vet and test the market potential. Validating a market is critical because it provides a sense of the opportunity size prior to investing lots of time and money. Google Trends and Facebook Ads are two accessible tools for reaching product-market fit.
- Google Trends: While this tool will not break down the exact numbers, it will help to weed out ideas in comparison to one another. Start by plugging in top five product ideas and see how their popularity compares.
Google Trends is also a good place to see where search volume is coming from. For example, there may be certain sites popular among specific segments of people that represent a promising customer base for a particular product.
- Facebook Ads: Running a small Facebook ad campaign may be the easiest way to test the viability of a product in a specific market. This is not free, but can be done without spending large sums, so set a budget before testing this channel. In addition to choosing among demographics for targeting, there are also opportunities to segment according to interests (e.g. people who read a certain magazine and like desserts).
- Google Keyword Planner: Google Adwords will come in handy again as a helpful tool. Try out keywords you believe your target demographic may be searching, adjust the targeting filters and evaluate if there are popular opportunities that have low — medium competition. Changing filters slightly can lead to the discovery of untapped or underserved markets. For example, targeting the phrase “graphic tees for girls” will return high competition nationwide, but filter to Massachusetts and you’ve lowered the competition to medium.
Finding product-market fit is a challenge for all business owners. However, e-commerce businesses have the benefit of not risking much upfront by taking an iterative approach towards product-market fit with the above recommendations.
By Thatcher Spring, CEO and Founder, GearLaunch, a San Francisco based software company that makes e-commerce simple with its proprietary 360 degree platform. GearLaunch takes care of the backend for businesses, from on-demand manufacturing to fulfillment and customer service. Thatcher’s experience with merchandising and supply chains began when he founded a nationally distributed wholesale apparel company, Thatcher Spring Inc., shortly after graduating Georgetown University. Thatcher then went on to receive his MBA from UNC Kenan-Flagler and briefly worked at J.P. Morgan and Mars before his entrepreneurial drive led him to founding GearLaunch.
Outside of work, Thatcher is an avid sailor, and helped lead the Georgetown University sailing team to a national championship. He also serves as a Director of the Cape Eleuthera Foundation, Class Ambassador for Georgetown University, and an Associate for the Nantucket Conservation Foundation.