4 Reasons You Should Concept Test Your Next E-commerce Idea

If you're a fan of ABC's hit show Shark Tank, you might recall that one of the most common questions the Sharks ask revolves around sales numbers.

Why? Because sales prove there's market demand for the product, it's the perfect question to ask as an investor.

But on the flip side, it's a risky way to prove a concept from the founders' perspective. It's possible to end up with lackluster sales and unwanted inventory if you hit the ground running instead of taking the time to test the waters.

Sadly, this is one of the many reasons 90% of startups fail. Even some of the big players experience product flops. Did you know that the highest five-year survival rate for new businesses is 51.3%. Remember Google Glass and Heinz EZ Squirt purple ketchup?

To avoid this dreaded fate, follow the "measure twice and cut once" mindset. In other words, focus on concept testing your e-commerce business model and your product ideas before formally launching them into the ether.

In this post, we share four reasons you won't regret taking the extra step to concept test your next big e-commerce idea.

Let's dive in. 

What is concept testing? 

Concept testing gives you an edge in launching a successful product by testing the viability with your target audience early on and using their feedback to improve it.

It's an essential step in product development because it helps you test the market before fully committing to a full-scale launch. And if you find that people don't love your idea, you can change it before you spend too much time and money developing it.

The best part of concept testing is that you can test even the most basic ideas generated from the ideation phase of the product development cycle.

Concept testing is a 2-way conversation that focuses on listening to your audience's unbiased views on how practical the concept is for them and turning that feedback into actionable items for attention. After making your tweaks, you might repeat the testing process until your audience is satisfied with the results.

You can perform qualitative research for concept testing in person, over the phone, in focus groups, or through surveys.

Surveys are the most common way to test product concepts, but more on that in a bit. Right now, it's time for the meat and potatoes: the benefits of concept testing.

Here are the four reasons every e-commerce entrepreneur should consider concept testing their next idea. 

1. Save time and money

Concept testing is a fast and inexpensive way to get honest customer feedback about your e-commerce idea.

Avoid costly outcomes by testing whether your idea has the potential to become a profitable product based on the needs of your target market.

You won't have to spend months or years developing an e-commerce site or product before finding out if it'll be successful. Prove your concept before going all in.

The same holds true for developing new product features. Industry data shows that 60–95% of features are never used, generating a yearly cost of $600,000 per product team. Ouch.

With concept testing, you'll score valuable insights into what people like and dislike, so you can make changes before you go ahead with whatever project you're working on.

The key here is that this process occurs early in development — you don't have to wait until you have a final product (or even close to it). So if you run into a problem, it's much easier to fix than if you'd waited until later in the process.

For instance, imagine testing a same-day freight service as an e-commerce offering. By surveying potential customers about their preferences for delivery speed, reliability, and willingness to pay a premium for faster shipping, you can validate demand before investing in logistics and partnerships. This approach helps you avoid costly operational missteps and ensures your service meets real market needs.

2. Improve your decision-making process 

Are you having trouble deciding what product to launch next?

Work smarter, not harder, by running a few concept tests with direct access to honest customer feedback at every step.

You'll quickly learn how people feel about your ideas, which ones they love and which ones they hate. And there you have it. Your target audience helps make the decision for you with no added stress on your shoulders.

Now you have more time to get back to focusing on more growth initiatives and the next stage of getting the product to market, like designing a marketing strategy, or developing your branding if you are launching a product for a new business. 

3. Understand what matters most to your customers

When you're developing an e-commerce product, there are many factors that you need to consider — but without talking to your customers, it can be challenging to identify which of these factors are the most important.

When you run your idea by your target audience, you'll have an opportunity to ask them about their pain points and determine if your product idea is currently meeting their needs.

The answers to these questions will help you determine if the idea is worth continuing through to development or if you should scrap it and go back to the drawing board with the feedback in hand to come up with something bigger and better. 

For example, imagine testing an e-commerce idea like a customizable RV carport. By showing potential customers different designs and features in a quick survey, you can learn which aspects matter most — like weather protection or easy assembly — before investing in production. This type of concept testing reduces risk and ensures your product meets real customer needs.

And if you are doing concept testing for a new business, you can also take the opportunity to test potential brand names and get feedback from the surveyors. Brainstorm some ideas or use a business name generator to come up with different alternatives and present them to your potential customers to see what they think. 

4. Identify gaps in the market

Concept testing also helps you identify gaps in the market and spark innovation.

For example, you might ask your customers what features they want to see in the next iteration of your product. Or if there are any available products on the market that aren't currently meeting their pain points.

To further illustrate, imagine you are a startup telehealth company that produces consumer-oriented products such as antidepressants, hair-loss products, and ED medications. Logically, you wonder if your venture will pay off. 

What better way to find out than through honest communication with your customers and receiving feedback directly from them on the results of the products?

Use these responses to determine where the gaps are and how willing customers are to try new things.

Soon, you’ll have the recipe for success sitting in your hands. 

How to conduct a concept test?

Are you ready to start testing your concepts? Follow these simple step-by-step instructions for the best results:

• Choose the proper survey methodology.
• Outline your objectives.
• Use the right language.
• Unlock the most promising concept.

Step 1: Choose a survey methodology

There are four different ways to conduct concept testing: monadic, paired comparison, proto-monadic, and sequential monadic testing.

Each method is helpful in its own way:

1. Monadic - Participants evaluate a single idea or concept without comparing it to anything else.
2. Paired comparison - Participants evaluate two ideas and then answer one survey to compare them.
3. Proto-Monadic - Participants evaluate two ideas and answer two surveys (monadic and comparative).
4. Sequential Monadic - Participants evaluate two or more ideas one after the other. A sequence rotation helps minimize order bias.

Step 2: Outline the survey components

Carefully map out what insights you hope to gather with your survey.

Here are some examples to help make sure all of your bases are covered:

• What did they like and dislike about the concept?
• Is there a need in the market for the concept?
• Would they use this concept over current products?
• What is the overall reaction to the concept?
• What is the likelihood that they would purchase the concept?
• Is it priced appropriately? 

Step 3: Use the right language

The flow of your concept test survey is critical to ensure that respondents understand and buy into the survey they are taking.

Use precise language in the introduction to get the most accurate information from surveyors. Double-check the clarity to ensure there isn't an easier way to write the copy.

Start with some easy-to-answer demographic questions (these will be useful later) and then switch to some qualifying questions to verify the audience fit for your survey.

Then you're ready for the main survey questions. Here are a few examples to ask your participants: 

• What brands have you purchased in the last month?
• Do you think this is an innovative concept?
• Would you purchase it on the market today?
• Is it a good value for the money?
• What features do you like or dislike?
• Where does the concept fall short?

Don't forget to thank the respondent for taking the time to fill out your survey, and let them know that their responses will be kept confidential and shared only with your internal teams.

Step 4: Unlock the most promising concept

After the survey, you're left with lots of data to sort through. That’s where data enrichment API might come in handy.

Using an advanced tool like the PureSpectrum Insights Platform, you'll have instant access to your data in easy-to-understand graphs and charts.

If you're sorting data by hand, use Microsoft Excel or Google Sheets to combine, sort, filter, and compare your results before turning them into a visual chart. 

We recommend breaking your results into two groups: overall and individual.

Overall results will give you a snapshot of how the concepts performed (with one outperforming the rest), while individual results will let you dig into each idea and see why it performed the way it did.

Wrapping up

We hope this article has shown you why concept testing is vital for your e-commerce business. 

It can help you avoid wasting time and money on an idea that should have never seen the light of day while also helping you build a successful online store that meets the needs of your target customers.

Concept testing is an important precursor to developing, launching, or expanding your e-commerce business. If you're not testing your ideas, you're leaving money on the table, opening the door for your competitors to gain an edge. 

Take control of your business success and start testing your ideas today. Head to SaaS Adviser’s blog for more free resources.