Perhaps you are a new retailer looking to nail down your product lines. Maybe you’re a veteran retailer looking to shake things up. Either way, the process of choosing which products to sell is arguably the most important one in your business. The items you put on your shelves (and offer on your website) play a huge role in defining your brand.
Alas, many companies don’t use a rigorous enough process when choosing their products. Worse still, many throw darts in the dark…and hope for something to stick. Retailers must do their due diligence and ensure that they sell products that connect with their ideal customers.
Dig in and do some research. This can be the difference between growing a company…and seeing shelves filled with unsold products. Choosing wisely depends on finding items with “product-market fit.”
What is Product-Market Fit?
This is simply 1. How well your products fit the demand within your market and 2. Whether or not they sell.
Of course, this is a basic tenant of running any kind of retail business. The goal is always to sell products that customers want. But, by defining the goal and creating processes around it, you give yourself a repeatable strategy for success that can be tweaked as needed to improve results.
Your own data offers the best path to finding product-market fit. Which items have traditionally sold well for your business? Are there tangentially-related products that fall into the same categories? What products haven’t sold well?
Determining which products are the right fit should take a wide array of different things into account. Does a product complement your current line of products, and does it make sense to add to your store thematically? Do your competitors offer the same or a similar product? How does it perform for them?
Identifying trends and rising products within your industry offers a great way to grow your customer base (and generate revenue on a short-term basis). However, you should aim to identify solid short and long-term fits for your shop.
How to Identify Product-Market Fit
For eCommerce operations, different strategies exist to determine product-market fit. A good strategy for identifying new products must be well-rounded. It should incorporate your own data, customer feedback, and competitive intelligence. As you look to identify new products, consider these strategies:
- Identify and solve customer pain points. What issues are truly plaguing your customers? This is often referred to as the heaven/hell dynamic. What hell are your customers suffering from? What heaven can you deliver in a product that solves those problems? Pay attention to the searches that your customers are doing on your site to identify products that they expect you to carry.
- Conduct Keyword Research. Keyword research will help you gauge customer interest in everyday products. Product keywords with high search volumes in search represent demand and interest within your market.
- Ask Your Customers. It seems like common sense, but many companies overlook the value that the opinions of their current customers can present. Ask them what they would like to see you carry.
- Look for Gaps, Capitalize on Trends. What product categories are your competition failing to cover? What recent trends have given way to opportunities within your industry? Not every product needs to have staying power. A six-month trend can be a huge driver of new business if you position yourself right.
Finding new products that are a good fit for your customer base isn’t a one-time task. It’s an ongoing battle. You can’t plan for new industry trends, and you should always try to stay on top of even small changes in demand.
Trust Your Data
Trust it your own internal data. It should reveal what your customers want, what they are willing to buy, and what products just aren’t resonating with them.
As you identify new products that you believe are a good product-market fit, check the temperature of your customers with soft-launches. Maybe consider advertising the product on your homepage and sending out some marketing emails, and see how well it does.
It’s much easier to convince current customers to buy a new product than it is to bring a new audience to your business. While there are circumstances that make either strategy the right choice, your focus should typically be on growing the customer lifetime value (CLV) of current customers. As we’ve mentioned previously, this is much less expensive than acquiring new ones!