If you’re looking for a way to grow your ecommerce business, market expansion might be the answer. When you expand a company into new markets, you begin using additional strategies to generate more profit — such as selling your products in a new geographic area, introducing a new product line, or otherwise offering yourself to a new market. The idea is to branch out and make yourself available to new customers in new ways so you can grow your revenue.
Ecommerce continues to be popular among customers, with U.S. shoppers each spending an annual average of $5,831 online. But ecommerce markets can easily become saturated. And for many companies, if they want to continue to profit, it’s time to grow.
Here’s how to know whether it’s time for your company to expand into a new market — and, if so, where you should start.
Why expand your market?
Is ecommerce market expansion the right choice for your business, right now? The answer depends on a few different variables.
Signs it’s time to expand
Here are some signs that it might be time to expand your company:
- You have steady cash flow
- Customers are asking for more
- You’re running out of room
- You have more business than you can handle
- You’re meeting or even surpassing your business goals
- Your current operational systems can easily scale
- You have an internal team who can support an expansion
- You’ve been profitable for over three years
- Your industry is growing
Expanding into a new market is not something to take lightly. It’s a lot of planning and work — just like when you originally started your company. But if it’s the right choice for you at this time, you could stand to benefit on many different levels.
Benefits of ecommerce expansion
Expanding into a new market is a great way to grow your ecommerce business. By successfully completing a market expansion, you can enjoy benefits such as:
- Higher profits and revenue
- Better brand recognition, awareness, and trust
- A stronger customer experience and higher customer satisfaction
Common expansion strategies
The most common ways for companies to expand are:
- Market penetration — Growing into the existing market using the existing products
- Market development — Growing by expanding into new market territories
- Product development — Growing in the existing market using new product development
- Diversification — Growing the business by diversifying its offering with new products and services
5 market expansion tips and ideas
Think now is the time for your ecommerce store to expand? Here, we’re breaking down five ideas you can use to branch out into a larger market. Take a look:
#1. Do your research
Before you jump into anything new, market research is an important step for making sure your ideas are viable. When you conduct market research, you gather information about your consumers and what they want — helping you better understand your audience, your competitors, and the industry overall.
As you complete market research with an eye toward market expansion, it’s helpful to ask questions like:
- What is the current market offering?
- What is the demand for your product in the new market?
- How will your business have a positive impact on the marketplace?
The answers can help you narrow in on what type of market expansion will be most effective for you.
#2. Go local — or go big
If your ecommerce brand has a high amount of brand awareness, web traffic, and sales, you might consider opening a brick-and-mortar location. This isn’t a fit for every ecommerce business — you need to sell a physical product or service, and there needs to be an audience and demand for that product or service in your local area. Do plenty of research on local markets to help decide if this might be a good choice for you.
Another option for U.S. or single-country ecommerce businesses: Begin offering international shipping. This opens up a whole new world, giving you access to consumers in other countries who might also be interested in your product. You’ll have to make sure your product can clear customs in certain countries, research transit times for shipping an item, and make sure you get any necessary documents and paperwork correct.
#3. Narrow into a niche market
New markets aren’t always about getting bigger. Sometimes, the answer is to go small. Niching down — focusing on a market that’s smaller and more specific — can help boost your sales because you’re competing in a market that is less saturated. (This is why micro-influencers, who often focus on a niche market, see higher engagement rates than bigger influencers.)
Moving into a more niche market might look like targeting Gen Z cat owners instead of all pet owners. Or maybe you decide to create a product that’s specifically meant for first-time moms rather than any mom. Whatever you decide, with less competition, you’re likely to see stronger brand loyalty and experience good word-of-mouth growth.
#4. Acquire a new business
Another way to expand your own business is to buy or acquire an existing company. You might already have a business in your network who’s willing to sell for the right price. You’ll need to research the company and meet with the owner before making an offer.
A business in your industry or one that offers something complementary to you is a good fit. And of course, conduct due diligence, making sure the other business is in good financial condition before moving forward. In the end, your goal is to generate more value and higher revenue by running both companies together.
#5. Launch a new product
One final way to grow your ecommerce business is by launching a new product. Again, starting with market research is key. Figure out what your customers are looking for. What do they need? What do they want? Then brainstorm an idea for a new product that will complement the other items you currently offer.
If you don’t want to create an entire new product, consider trying out a different model for your current products, such as a subscription model.
Expand into a new market with Jabio
As you research the market to figure out where you can expand, customer reviews are a helpful way to get your finger on the pulse of where your customers are at. Ideally, you’re already collecting customer reviews on sites like Google, Yelp, and Sitejabber. You can also use Sitejabber’s business platform, Jabio, to monitor reviews and distribute reviewers. Click here to get access to a suite of digital business tools that can help you connect and gain trust with customers as you expand into new markets and beyond.
