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How to Do Market Research on Etsy

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What is Market Research?

Market research is a systematic and strategic process that involves collecting and analyzing information about a specific target market and its consumers. It serves multiple crucial purposes, such as evaluating the potential success of a new product, refining existing products or services, and gaining insights into how your brand is perceived.

The ultimate goal of market research is to enable informed decision-making and ensure effective communication of your company’s value to your audience.

Market Research on Etsy

Etsy market research examines the opportunities and challenges your Etsy store might encounter while operating and expanding within the Etsy marketplace.

Market research encompasses both qualitative and quantitative approaches, depending on the specific objectives and insights sought within your industry.

Qualitative Research gauges public opinion and understands how the market perceives existing products. In contrast, Quantitative Research deals with data analysis to identify trends and patterns from public records.

There are two primary types of market research: Primary Research and Secondary Research.

Primary research

Primary Research involves collecting firsthand information about your market and its customers. It is valuable for market segmentation and developing buyer personas. Primary research can be exploratory or specific:

  • Exploratory Primary Research focuses on identifying potential issues and often includes open-ended interviews or surveys with a small sample of people. It precedes specific research.
  • Specific Primary Research follows exploratory research and delves into previously identified problems or opportunities present on Etsy. It involves targeted questions to solve specific issues within a smaller audience segment.

Secondary research

Secondary Research involves utilizing existing data and public records to draw conclusions. It is especially useful for competitor analysis and falls into several categories:

  • Public Sources are readily accessible and often free. A good source would be Etsy’s annual reports & proxy.
  • Commercial Sources provide industry insights through market reports from research services like Sale Samurai (recommended), EverBee, EtsyHunt, eRank, etc. These reports and tools are usually available for a fee.
  • Internal Sources encompass your Etsy store’s existing market data, such as average revenue per sale, reviews, sales volume, and historical account data. This information can be instrumental in understanding current customer preferences.

Types of Etsy Market Research

  • Buyer persona research
  • Competitive analysis research
  • Customer satisfaction and loyalty research
  • Product use research
  • Market segmentation research
  • Pricing research
  • Brand awareness research

Buyer Persona Research

Buyer persona (ideal customer avatar) research provides a comprehensive understanding of your target audience. It delves into your audience’s challenges, motivations for seeking your product or service, expectations from your business and brand, and other critical insights.

Questions that you should ask yourself when doing buyer persona research:

  • Who is your product designed for?
  • What type of person would like to use your product?
  • What is the age range your product mostly fits?

Competitive analysis research

Competitive analysis research is invaluable because it provides a profound insight into the competitive landscape within your market and industry.

This research allows you to discern what is thriving in your industry, understand the preferences of your target audience regarding products similar to yours, identify competitors you should strive to outperform, and devise strategies to distinctively differentiate your products on Etsy from the competition.

Questions that you should ask yourself when doing buyer competitive analysis research:

  • Who is selling similar products like yours on Etsy?
  • How does your product compete or compare to your competitor’s products?
  • How can you make your product more enticing so customers buy from you instead of your competitors?

Customer satisfaction and loyalty research

Customer satisfaction and loyalty research provide insights into how to encourage current customers to return for repeat business and what incentives will motivate their loyalty. This may involve strategies such as adding future purchase discount coupons to the product, unexpected product bonuses, or exceptional customer service.

Questions that you should ask yourself when doing customer satisfaction research:

  • What kind of reviews customers have left on your competitor’s products?
  • What kind of methods do your competitors use to foster customer loyalty?
  • What kind of replies do your competitors leave to customer reviews?

Product use research

Product use research provides valuable insights into how and why your audience uses your product and the specific features that resonate with them. This type of market research also offers an understanding of the item’s usability within your target audience, helping you fine-tune your offerings to meet their needs and preferences better.

Questions that you should ask yourself when doing product use research:

  • How is your audience going to use your product?
  • How are your customers currently using your product?
  • Why should they use your product?
  • How is your product easier, better, or faster to use than your competitors?
  • What makes using your product a superior experience compared to your competitors?

Market segmentation research

Market segmentation research is a critical process that enables you to classify your target audience into distinct groups or segments based on unique and defining characteristics.

This segmentation approach enables you to tailor your strategies to effectively address their needs, comprehend their challenges and expectations, gain insights into their objectives, and ultimately enhance your ability to connect with and serve them more effectively.

Questions that you should ask yourself when doing market segmentation research:

  • What pain point is your product going solve for your customer?
  • Why will your product solve your customer’s pain points better than your competitor’s product?
  • What outcome is your product going to deliver to your customer?
  • What do your customers expect from a product you are about to sell on Etsy?

Pricing research

Pricing research provides essential insights into the pricing landscape within your market. It encompasses understanding the price points of similar products or services, gauging your target audience’s expectations and willingness to pay for your offerings, and determining a competitive yet fair pricing strategy for your product or service.

Questions that you should ask yourself when doing pricing research:

  • What price point do your competitors use to sell their products?
  • What is the average market price for products similar to yours?
  • Why you should price your product higher or lower than the average market price?
  • When studying your competitors, what can you learn from the sales count and pricing?

Check out: How to price digital downloads

Brand awareness research

Brand awareness research offers valuable insights into what your target audience knows and recognizes about your brand. It provides a window into the associations that your audience forms when they think about your business and sheds light on the perceptions they hold regarding your brand’s identity and values.

Questions that you should ask yourself when doing brand awareness research:

  • Is my brand on Etsy strong enough for it to differentiate itself in the market?
  • What is the overall customer demographic and psychographic my brand on Etsy is attracting?
  • What are the perceptions people have about my brand?
  • How does your brand compare to your competitors?
    • Overall store design, use of fonts, graphic elements used, overall store message, product images, etc.

How to Do Market Research on Etsy

  • Define your ideal customer, your buyer persona, the one customer avatar.
  • Identify and list your primary competitors in the Etsy marketplace.
  • Research your specific market segment or niche.

Define your ideal customer

The ideal customer, buyer persona and the one avatar are all often called marketing personas, imaginary yet highly detailed profiles representing your ideal customers. They help you envision and understand your audience, refine your communication strategies, and guide your marketing approach.

Things you can define about your ideal customer:

  • Age
  • Gender
  • Living location
  • Job title(s)
  • Family/ no family
  • Income level
  • Pain points and challenges
  • Outcome expectations
  • Dreams
  • Goals
  • Habits
  • Mindset

Defining your ideal customer is beneficial because it will help you communicate and craft the right message type. When your potential customer sees your message (brand, logo, fonts, product images, product description, product title, Etsy ad, etc.), they feel like it’s made for them.

Identify and list primary competitors

Identify and list the primary competitors in the market segment or niche you are about to enter. The whole Etsy marketplace is not your competition but the ones who sell the same type of products you intend to sell or already sell.

Things to note from your competitors:

  • How many sales has the competitor made?
  • When was the business or store established?
  • What is their value proposition?
  • Product images, videos, and overall branding.
  • Product title and product description.
  • Product pricing.
  • Product listings.
  • Product design and layout, including color choices, font choice, vibe, and tone of voice.
  • Product delivery method.
  • Customer service.
  • Customer feedback.
  • Who do they sell their products to (business, consumer)?
  • Earned Etsy badges: bestseller, star seller, Etsy’s pick.

Use Etsy SEO

Etsy SEO (search engine optimization) is how your competitors get organic search traffic to their stores. Use this to your advantage and use Etsy’s search bar to find your competitors.

When using Etsy’s search bar, filter the results by Item format and then Sort by Top Customer Reviews. Look at the best-selling stores and offerings and see how to enter the market.

Pay close attention to sellers who have achieved exceptionally high sales numbers. These sellers have likely been in the Etsy marketplace for a long time and have consistently dominated the market. Study their product listings and understand the key factors contributing to their success.

Note! Sale Samurai (Etsy market research tool) helps you get an edge on the Etsy market with Etsy SEO, competition research, etc., as it will do all the heavy lifting for you.

Research your specific market segment or niche

Research how your product or idea can help an unserved market segment or a niche fill a market or product gap with customer demand. You don’t want to enter or be in a market that doesn’t want to exist. Competition is good, as it will show there’s money to be made in the market.

Look out for what your competitors offer and how your product can serve the market better.

Things to look out for when finding or selecting a niche and a market segment:

  • How many sales an Etsy store has made in that specific market?
  • What is the average price point of a product in that specific market? Is there money to be made?
  • What is the market segment lacking, and what could you bring to it to fill product gaps?
  • Are there Etsy ads being used to promote products inside the market segment?
  • Is the market segment new, growing, declining, trendy, or old?

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Okuha

Digital Artist

I’m a digital artist who is passionate about anime and manga art. My true artist journey pretty much started with CTRL+Z. When I experienced that and the limitless color choices and the number of tools I could use with art software, I was sold. Drawing digital anime art is the thing that makes me happy among eating cheeseburgers in between veggie meals.

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