Whether you’re opening your first retail shop or you’re expanding to a new location, market research will help you make several important decisions. Your store’s location, merchandise selection, interior design and marketing campaigns are all affected by your target market. Without a clearly defined audience, your efforts to market your shop may fail to achieve your desired goals.
Conducting market research can be fun! Here are a few steps you can take to get started:
Hit the books
Let’s say you have a unique product, such as customizable jewelry. You probably have some idea about who the target market is – in this case, women aged 18-65. The first thing you might do is check online to see what the competition looks like and what they’re doing to appeal to this audience. By doing so, you’ll see how members of your target demographic are reacting to those messages. This is great way to get started, but it shouldn’t be your only method of conducting consumer research.
Entrepreneur Magazine suggested visiting the business reference section of your local library for some helpful materials such as the Statistical Abstract of the United States, a publication from the U.S. Census Bureau. You may also find other stats and information from local government sources. Bring a notebook with you and be prepared to take notes – this can help you narrow down your online research later. Take notes on statistics such as average income in your area as well as other demographic information such as education level and employment rates.
Strategically narrow your target market
While you may want to sell your merchandise to the widest possible group of consumers, going too broad can introduce business risks. To continue with the example of customizable jewelry, you might need to take local economic statistics into consideration when setting prices and creating marketing campaigns. Using data from the U.S. Bureau of Labor Statistics, you could determine which age group is the wealthiest, and therefore most likely to purchase premium items. Depending on your location, you might find that women over 40 have more disposable income, or you might discover that your shop is located in an up-and-coming millennial neighborhood. This factor alone will drastically alter how you market your products.
This data can affect your store design, too. Environmentally conscious millennials may find a burlap lace ring display appealing. A slightly older consumer group may be more drawn to an understated brushed charcoal display. These are small touches, but as part of a cohesive brand look, they can make a huge difference in your store’s visual appeal.
The emphasis here is on strategy. Market research will help you make informed investments with lower risk. Strategies are also flexible and should be assessed regularly. Once you have the bulk of your research completed, you can make confident marketing decisions and adjust your plan as you gain more experience.