One of the most difficult things to understand when you are launching a website is the level of demand that exists for your ecommerce offering.
Many ecom websites dis-intermediate the supply process for products that have been established through real wold stores through traditional distribution. As a result there will be a wide number of distributors and retailers, and they aren’t going to willingly hand your their sales numbers to get a handle on demand.
You can purchase the information but it is often very expensive and may have little weight on the actual demand from internet shoppers. At start-up stage the business is also cash poor. Ballparks serve better than definitive figures in these instances. There is free information that can give you current demand on the internet, so you can use your money elsewhere.
Google keywords should be the first stop for assessing the interested and active market for your product. With some application of typical consumer behaviour, the way people use the internet and applying your own market position you can quickly assess the level of demand that can be tapped.
Take books as an example. The UK saw 30 million searches for “books” in December with average search volumes of 15 million. Many people will look at a number of suppliers if they have choice available, let’s say 4 suppliers, so there were at least 7.5 million people searching for a book, that did not already have a supplier in mind.
However, if I have a niche in children’s books, all of a sudden I’m looking at less than 2 million searches in December and less than 0.5 million potential uncommitted visitors.
But these only tell me half the story. There are also a lot of loyal, repeat customers of websites out there and they won’t use the search engines, they’ll go straight to the brand of choice. I might believe I can take some of the business away with a better proposition so to complete a demand assessment I need to know what there traffic is. Getting these figures is more difficult without paying.
Go through press releases and visit industry websites like the IAB. According to a press (skite) release Amazon UK put through 15 million visitors leading up to Christmas. Books are a big part so we can start to make some ball park assumptions. People will often visit 2 or 3 times before purchase and Amazon has other products to sell. So lets be generous, add 2.5 million and there are probably at least 10 million people buying books online each month and about 0.6 million wanting children’s books.
You could also check alexa rankings or draw on free information published by Netratings, Hitwise (their retail data centre) or Deloitte’s to size up how much market share the internet has. All of these websites provide press releases and proportions of traffic that allow you to reverse engineer the actual numbers.
All up, current internet demand data describes a healthy demand for books in the UK and even niche opportunities like children’s books. These can be taken back and slotted in to any websites capacity planning, system scalability plans and market share targets and ultimately a business plan. And hopefully this blog post just saved some out there a few thousand dollars in research.