Online store, online market space – part 1 of a new series exploring new and emerging opportunity
I network with a wide reach, and have come to share ideas with colleagues who approach business and technology from a wide range of perspectives. One of my colleagues, a successful entrepreneur from Korea has been working with younger and first time entrepreneurs from his country, and we have been exchanging emails as to their areas of interest, focus and need. One of his more recent emails said in part:
“Korean entrepreneurs want to know more about specific steps to startup business in the field of online shopping store. There are a few people who try to startup business like press, informative blog, but most of Koreans want to open a store in online.”
I understand as online offers tremendous opportunity and both for established bricks and mortar businesses seeking to expand their markets, and in building stand-alone online businesses that do not carry the fixed operating expenses associated with bricks and mortar. There are real opportunities, and also some very real challenges, some of which are common to any business and some of which are unique to online.
I told James that I am going to systematically address some of this as a new series in this blog and this is my first installment to that. And in this posting, I want to start out with a basic inventory of core starter questions.
• What products and/or services do you wish to offer online?
• Who would, by demographics, constitute the natural target market for these products and/or services?
• Do these potential customers actively research possible purchases online and if so where and for what?
• Do they then buy online or do they primarily use online for research alone?
• If you are going to offer physical products are they products that the average consumer would want to pick up and hold – physically see and touch before making a buying decision? What types and levels of information detail would they need to make a purchase decision?
• If you will be selling services, what would these potential customers want to see and experience as they conduct their purchasing decision due diligence?
• Would your products and/or services primarily address the needs of impulse buyers, or at least of customers when they are susceptible to this type of purchasing?
• Would your natural customer base primarily be making planned purchases, and perhaps with a requirement that they consider several sources for any purchase over some threshold cost level?
Basically, I am listing with the above, a start to a possible set of questions about what the business will offer and to whom, and with an emphasis on the purchase decision making processes of that whom. Are your products and services a good fit for online? I start with the product or service and with identifying the potential marketplace for that product or service, at least at the preliminary analysis level.
• Who is already selling the same or similar products and services? Are you walking into a blue ocean strategy situation where you would be offering something that is in some substantial way new, or are you preparing to dive into a blood red, highly competitive marketplace with many others offering precisely the same as you? And this is important – when I say “the same as you” I mean as viewed by potential customers in that marketplace. A distinction you see and value but that your potential customers will not also appreciate is not going to be a difference.
What I am writing of here is the need to do an effective market analysis and to be able to accurately describe your products or services as you would in a business plan. Here you want to dig into the details in both product/service description and market analysis but at the same time you need to be able to summarize these in simple language. You want to be able to quickly, succinctly state what you offer and what sets you apart and to whom, and in a few brief sentences free of any buzz words or jargon. You want to be able to outline what you will be doing in elevator pitch format (see Structuring an Effective Elevator Pitch as included in my Guide to Effective Job Search and Career Development as I cover many of the essential points there.) This is in fact a crucial reality check exercise to help you develop and move forward with an effective focus.
I am going to assume in what follows through this series that you have a product or service that offers some unique value proposition, and for which you can find and develop an active marketplace, and an online marketplace at that. I will follow through on this by looking into a whole range of issues including cost and price point, fine tuning your product or service as you fine tune your target markets and as you develop your initial marketing campaigns, and of course issues related to web site and other-format online businesses per se – and selecting the right mix of online formats for you.