Diversification is an excellent way for eSellers to minimize their exposure to risk due to marketplace fluctuations. Since interests shifts throughout the year between products, having a limited product assortment can be a risky strategy since a slight market change could negatively impact your operation.
That is why eCommerce businesses should use the start of the new year to evaluate new items and add new products to their current offering.
The following is an overview of key strategies, tips, and insights to help you effectively diversify your e-commerce business inventory in 2019 and beyond.
Expand into Related or Complementary Products
Expanding is ineffective if you do it haphazardly or without proper planning. Businesses looking to diversify their product offering need to maintain business focus to avoid confusing, and potentially losing, customers.
Thus, when looking to diversify one’s portfolio, consider looking at complementary or related products that suit your current clients’ needs. If you sell computers and related accessories, for instance, it would be logical to diversity offering and include additional electronic devices, even from other categories, however, it would make less sense to offer beauty products. If your niche is home furnishings, you could easily explore different categories within this sector that you don’t already offer while making sure there is some connection to your current offering.
By extending into related areas, you can create opportunities to cross-promote to existing customers and to present add-on sales and bundle packages to potential ones.
Use Data Analytics to Identify the Best Opportunities
If looking to diversify your product offering, consider utilizing data analytics to identify the best opportunities. Top eSellers often examine data to take the guesswork out of product diversification. Analyzing data as well as business or product reviews can provide valuable insight into market demands, as consumers point to missing products and accessories that would improve their buying experience.
Create a buyer persona for your core segments to get an in-depth personal and behavioral profile of the audience you target. Remember to pay close attention to intent data that reveals the buyer’s journey and shopping habits of your customers to learn how they buy, and what they buy. Doing so will make it easier to identify potential items that your clients are interested in and would complement your existing offering.
Leverage More Online eCommerce Platforms
Beyond product expansion, another way to diversify your e-commerce business is by selling on other e-commerce platforms. Many eSellers concentrate only on Amazon because of its size and dominance. While it makes sense to sell on Amazon, other eCommerce platforms offer distinct features and access to different types of customers that you might not reach on Amazon.
Shopify, for instance, offers a lot of data and insights on top-selling product categories and the makeup of the market, making the platform valuable for many eCommerce sellers, particularly those looking to diversify their offering. Niche eSellers should also consider selling on niche eCommerce sites such as Etsy which is focused on craft and home decor products.
Markets fluctuate in an ongoing way, and the best way to ensure that market changes do not impact your eCommerce business is by having a diverse product offering that can be continually modified based on customer demands. The tips above can eSellers diversify their offering in the best way possible.
With 2019 just getting started, now is the time to build your product portfolio and insulate yourself from the risks of an overly-concentrated approach.
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