by Market research is defined as the data you gather about the industry you’re about to enter, your competitors and your target audience. This is one of the most significant ways to make retail partnerships, offer functional products, create an effective marketing strategy, establish competitive prices, and develop your unique selling proposition. In other words, market research keeps you on track and enables you to focus on the important aspects of both your physical and online stores.
There are two basic types of retail market research- primary and secondary. Primary is based on the data you’ve gathered yourself over time. It requires taking different approaches to collect information, such as online and offline surveys, in-depth customer interviews, consumer reviews, focus groups, sales records and your employees’ feedback. On the other hand, doing secondary research means analyzing case studies, industry trends and other reports relevant to your business, done by someone else.
Tools:
Mystery Shopping: Whether it be a sales associate’s knowledge or friendliness, store cleanliness, customer service experience, store management, product options or availability, or something else, there are a number of variables that impact a customer’s experience in a retail store.
Intercept Surveys: Intercept surveys, or intercept interviews, are a very popular market research option, especially within the retail industry. During a traditional retail intercept survey, an interviewer approaches customers leaving a store and generally asks them about their experience. Intercept interviews can be conducted using a tablet, laptop, or paper survey to record data.
- Taste-testing
- Merchandise-testing
- Customer satisfaction
- Brand awareness
- Opinions on packaging
Customer Surveys: It’s impossible to read a customer’s mind, and in a market that is crowded and competitive, retail stores need to be surveying their customers to stand out among their competitors.
- Customer Satisfaction Score (CSAT): How would you rate your overall satisfaction with the service you received at [store name]?
- Net Promoter Score (NPS): How likely are you to recommend [store name] to a friend?
- Customer Effort Score (CES): How easy was it to find the product(s) you were looking for at [store name]?
Competitive research: It’s no secret that retail is an extremely competitive market. With hundreds of options for customers to choose from, retailers are constantly competing with one another. Retailers, no matter what size, should be conducting competitive research.
- Pricing
- Product offerings
- Sales or promotion
- Marketing strategies
- Social media tactics
- Customer satisfaction scores
- Design or layout
- Reviews or ratings
Shop-alongs: Through a shop-along market research study, retailers are able to understand a customer’s journey from the entrance to the exit of their store.
During a shop-along, market researchers observe a customer’s behavior while they shop in terms of navigation, decision making, product selection, and overall experience.
Doing so, researchers are able to observe how customers respond to changes in the store layout, product displays, promotions or sales, marketing campaigns, purchasing motivators, and even how basket or cart size impacts purchasing behavior.
Social listening/monitoring: As a retailer, especially in a competitive space, it’s essential to stay in the know about the conversations that are happening online about your industry. There’s nothing worse than an unhappy customer rambling on about their negative experience with your company on social media for the world to see. Just one negative customer experience in a retail store can fuel a social media wildfire. Setting up alerts for these situations is important to putting out the fire before it’s too late.
- Trend tracking and analysis
- Reputation and crisis management
- Social impact of marketing
- Competitive intelligence
Geofencing: Geofencing is a fairly new methodology in the retail market research industry, compared to mystery shopping or in-person intercept surveys. Geofencing has similar advantages as mystery shopping and intercept surveys, with one major difference: there are no on-site interviewers needed.
So, how does it work? Geofencing surveys create a virtual boundry around your retail store. They can be created with GPS location technology commonly used in cell phones.
User experience (UX): Have you ever been shopping on a retailer’s website and then up pops a request asking you to participate in a survey about your experience? While this is a form of a “website intercept survey,” its purpose is largely to collect information about your user experience (UX) as an online customer.
For many online retailers, UX surveys can uncover important insights surrounding factors such as:
- Cart abandonment
- Website design
- Website load times
- Search terms used to find the website
- Website navigation
- Check-out process
Other Tools
- Market research tools: There are a wide range of platforms, including FedStats, Nielsen, Claritas MyBestSegments, SurveyMonkey and Survata that provide you with fresh data and updates on your industry, giving you a clear image of where, when and how to launch your retail startup.
- Customer targeting tools: The best way to collect this information is through surveys, interviews and focus groups. Fortunately, the rise of market research tools has made this process much simpler to you. Platforms like American FactFinder, Think with Google: Marketer’s Almanac, and MakeMyPersona will give you the invaluable information on your consumers and their buying habits.
- Competitor analysis tools: Country Business Patterns provides you with the data on the areas of the country with large numbers of certain types of businesses. Additionally, Business Dynamics Statistics draws census data and helps you see economic data on job creation, startups and shutdowns, business openings, expansions, and closures.
