It doesn’t matter how well made your product is if no one has any interest in buying it. Learning about your audience’s needs before you go through the effort of making a product can set you up for success.
That’s where product discovery comes into play. The process is vital to ecommerce businesses because it can show you the viability of your product.
Learn how product discovery works and how it can benefit your business.
What is product discovery?
Product discovery is the process of researching user behavior and analyzing the market to assess the viability of products. The practice revolves around the idea that customer needs should inspire your product vision.
For most startups, the product development process starts with ideation and brainstorming. Product discovery then kicks off after the team develops a product concept. During this phase, the focus shifts from ideating to researching consumer behaviors to determine if the product meets a market need.
Teams employ various research methods, like user interviews and competitive analysis, to evaluate the product’s potential value to users. This process allows brands to create a complete portrait of customer concerns and desires as well as what’s already available to them.
Ecommerce product managers may spearhead discovery, but cross-functional teams that include product managers, software engineers, and designers can also lead the process. Product developers and managers leverage the insights from this phase to develop the product roadmap, a strategic document that visually outlines a product’s development and anticipated features and updates.
Product discovery vs. continuous product discovery
Product discovery describes the upfront research and development process that retailers partake in when they’re launching a new product. Continuous product discovery is an iterative process that spans the entire product life cycle.
In the case of a new soda drink, for example, a brand might invest upfront in product discovery to validate their initial idea. After the public launch, the brand collects feedback from customers, analyzes purchase patterns, and examines market trends to continuously improve the drink.
A brief history of product discovery
Product discovery is a concept that comes from the tech industry. When digital products began to enter the market en masse in the 1990s, these early offerings were about innovation—not necessarily what the user or customer needed.
As digital technology became more widespread, the tech industry began to shift toward user-centered design (UCD), an idea put forward by Donald Norman in his 1986 book, User Centered System Design: New Perspectives on Human-Computer Interaction. He became the first user experience director at Apple, where he began incorporating customer research and feedback into the product strategy. The success of his products demonstrated the market power of user insights.
In 2001, a team of technologists developed agile methodology, a product management philosophy for digital products. Agile practices emphasize the importance of continuous testing and integration of user feedback. This development framework gained popularity as a way to move quickly while retaining a focus on customer satisfaction.
Since the development of the agile method, a proliferation of new technologies has provided developers with access to more data than ever before. The fundamental principles of product research and testing remain essential in the product discovery process, but it now includes modern tools and databases such as AI-powered A/B testing and machine learning technology.
Today, the philosophy behind product discovery is influential among sellers of everything from SaaS (software as service) to shoes.
Why product discovery is important
Product discovery is important because it lets brands validate their product ideas before committing to further development. It increases the odds of creating a product that customers will buy, at a price that’s viable, before its release into the marketplace. Here are a few other reasons product discovery matters:
Enhances customer experience
Product discovery lets you deliver a stronger product. By understanding what customers need, you can reverse-engineer a product that solves their problems. This means you can build a product that doesn’t have any superfluous features that they don’t need or want, which can make for a better customer experience.
Product discovery also lets you involve potential customers in the development process. This can give people a sense of ownership that makes them more willing to buy into a product when it goes to launch. They might share it with a friend, buy it themselves, or talk about it on social media because of their involvement.
Encourages innovation
You might have the best product idea in the world, but a limited perspective. Product discovery expands your horizons by understanding what customers need, the real-world problems you’re solving, and what they’d buy, which can result in more innovative products that go beyond your initial product vision.
Mitigates risk
There’s a chance a new product will fail when it enters the market. Product discovery lets you validate how viable your product is early in the process. You can avoid investing too much time, effort, and resources into a product that ultimately won’t sell.
Provides a competitive advantage
Investing time into understanding your customers, testing new ideas, and iterating concepts helps you develop superior products that stand out from competitors who’ve skipped the discovery process. A strong competitive advantage helps a business secure market share.
Drives business growth
Product discovery helps businesses create products that solve customer problems. You can do this quickly and at scale, especially if you’re taking the continuous approach to discovery. Constant innovation can help you stand out from competitors, open additional revenue streams, and retain loyal customers.
How to conduct product discovery
- Do it yourself
- Outsource to a product development company
- Hire a consultant or specialist
- Strike up a partnership
There are a few ways you can conduct product discovery. Learn about the benefits and drawbacks of each:
Do it yourself
Many entrepreneurs own the product development strategy. This approach lets you cut costs and get direct access to stakeholders (including customers), but it’s time consuming. You may also lose out on opportunities to learn from people who’ve completed the process before.
The pros of this product discovery method include:
- Direct control and understanding of your product and customers
- No extra outsourcing costs
- Freedom—you can choose from various product discovery techniques, not just those imposed by manufacturers
However, there also are downsides, including:
- Potential for bias and limited perspectives
- No opportunity to learn from experienced product developers
- Research, interviews, prototyping, testing, and analysis is time consuming
Outsource to a product development company
Product development companies exist to help businesses explore product ideas. This lets you tap into expertise and experience from experts who’ve done it before, often helping to speed up the process.
The pros of this product discovery method include:
- Freed up internal resources
- Fresh perspectives from experts
- Ability to lean on existing frameworks for prototyping and user research
However, the downsides are:
- Extra costs
- Manufacturers may limit how you approach product discovery
- Product development companies may have limited knowledge on your specific product or business
Hire a consultant or specialist
You can still get help throughout the product discovery process without outsourcing the entire system to a specialist company. Consultants, business mentors, or industry experts let you tap into market expertise—information that could be difficult or time-consuming to secure through your own research alone.
This is the approach the team at Good Girl Snacks, a jarred pickle brand, took to develop new products. “We started making [the pickles] at home initially, just testing different recipes, testing different ratios, and it never tasted quite right because we didn’t know what we were doing,” Yasaman Bakhtiar says in an episode of the Shopify Masters podcast. “And although [co-founder] Leah and I think we are pretty good home chefs, I don’t think we really got the science down for pickling.”
Yasaman connected with two brand consultants—one of whom had extensive experience in the food and beverage industry.
“We kind of handed over our recipes, if you can even call them that, and she basically perfected them,” Yasaman says. “After about three or four rounds of samples, we decided to launch the product and we came down to a recipe that we really liked.”
The pros of this product discovery method include:
- External, unbiased opinions on a product or industry
- You can work with consultants on an as needed basis
- Consultants bring their own network of connections, including potential partners or customers
However, the downsides are:
- Consultants are expensive and often have limited availability
- It can take time to find the right one
Strike up a partnership
Collaboration helps small businesses share resources and work together to discover product opportunities. However, it takes some thoughtful planning. Choose the right partners to avoid the pitfalls of collaboration.
The pros of this product discovery method include:
- Shared expertise, which can increase credibility for the new product
- Immediate access to an established customer base (that isn’t your own)
- Extra resources to reduce the cost burden of product discovery
However, the downsides are:
- Risk of brand dilution, especially if the partner offers similar products to your own
- Any problems your partner faces—such as poor sales or supply chain issues—could impact you
- Slower decision-making due to multiple stakeholders involved in the product discovery process
5 key stages in the product discovery process
Most product teams perform research and development, but companies may use different techniques or develop their own product discovery processes. While methods may vary, the overall goal remains: develop a deep understanding of user needs, spot product opportunities, and identify product solutions to serve the customer.
To accomplish these goals, the product discovery process typically follows this structure:
1. Preparation and initial research
Research is the backbone of product discovery. This phase revolves around collecting user stories and market data. The goal is to gain a deep understanding of the customer’s pain points and identify needs that current products on the market don’t meet.
Key questions to ask yourself at this stage include:
- Who are our target buyers?
- What are their pain points?
Conduct user research by administering customer interviews, running surveys, and hosting focus groups. You can also use market research tools for competitor research, trend analysis, and market forecasting.
2. Data collection
The worst thing you can do is have the results of a focus group stuck in a notepad, product analytics in an ecommerce platform, and market research in a Google Sheet.
A data repository centralizes your data and makes it accessible to everyone involved in the process. Plus, with all of your research in one place, it’s easier to identify trends or patterns that may not be obvious from individual data sources.
Questions to ask at the data collection stage include:
- How are we standardizing data collection?
- Are we sourcing a wide variety of data from various sources (e.g. customers, product managers, etc.)?
- Do we have real-time data synchronization?
💡Tip: With Shopify, any product, customer, or inventory data you collect feeds back to one business “brain”—no matter which sales channel or integrated app you collected it from.
3. Analysis
Synthesizing your research helps turn data into valuable insights. Your goal at this stage is to answer the following questions:
- What patterns do we notice in the data? If multiple users voiced the same concern or desire, it may indicate a gap in the market. Your team can create a strong product-market fit by addressing this gap during product development.
- Who specifically are we targeting? Product teams may also use visualization techniques like persona development and customer journey mapping to help them interpret the data. Buyer persona development involves imagining a fictional customer to represent your target audience and the product from their perspective, while a customer journey map is a visual tool depicting every aspect of a user’s interaction with your product.
The analysis phase may also include a touch base with internal stakeholders, such as product managers and sales reps. Conducting interviews with product leadership can offer insight into any internal limitations or non-negotiable features to support company goals.
4. Decision-making and development
This stage uses the insights you gain during research and analysis to make concrete decisions about product direction. The team uses their understanding of customer problems and desires to propose potential solutions.
At this point, your goal is to answer: What feature or product ideas (also known as the minimum viable product) are needed for launch?
“The first thing when you’re starting to embark on one of these projects is: How do you just get the product out in the world and get some real genuine feedback?” says Nick Wiseman, cofounder of hummus brand Little Sesame, on an episode of the Shopify Masters podcast. “You don’t have to start by launching your fully built-out ecommerce experience, but do people actually want the product you’re selling?”
For product managers to make these decisions, they may consider feasibility, team bandwidth, customer impact, and alignment with business goals. Once they’ve determined the best path forward, the team builds a product roadmap and begins to create product prototypes.
5. Iteration
The final phase of the discovery process focuses on refining products. At this stage, your team has a working prototype or demo of your new product.
Using a product demo to conduct user testing can provide valuable feedback on product performance. Incorporating these user insights can help make your product even better.
Ask yourself:
- Is this product solving the customer’s problem?
- How easy is it for customers to use?
- What changes could be made to improve the product?
This stage isn’t a one-and-done process. The iteration workflow can continue even after the product has launched. Many brands practice continuous discovery by regularly asking for feedback and addressing new issues.
Gyve Safavi explains that the discovery process for toothbrush brand SURI included around 20 iterations prelaunch. On an episode of the Shopify Masters podcast, Gyve says, “We did testing with dentists and sustainability experts early on. We did, like, a 500 batch, then a 1,000 batch, and then as we’ve launched, we’re constantly iterating the inside of the brush. We’re constantly changing the product, because the main thing for us was that we needed to achieve a minimal lovable product.”
Main product discovery challenges
Here are some challenges you may encounter during product discovery:
Team alignment
Product discovery is relatively straightforward if you’re the only person involved in the process. But as your team grows (or you outsource to a product development company), it’s easy to lose sight of the big vision. Each department works to its own goal—oftentimes these can be conflicting.
Set a clear vision for your product and outline the process upfront, including any timelines you’re working toward. Ensure everyone is using the same data with a centralized repository, and establish key performance indicators to keep everyone on track.
Data overload
Businesses have access to more data than ever before. Collecting it is just one issue; making sense of it is another.
Avoid feeling overwhelmed by data, which can make it difficult to make decisions from your data, by prioritizing what’s important. Use a structured data framework that includes clear guidelines on what data is (or isn’t) necessary, then compile it into a centralized repository that lets you categorize data by tag, data collection method, or product insight.
Market changes
Because product discovery can be a complex process, rapid market changes can make your initial research outdated by the time it comes to launch. Most of these factors are outside of your control, which makes it hard to anticipate and plan around.
This is where external insight can help. Consultants who’ve been in the industry for some time can highlight any looming changes to regulations, emerging competitors, or technological advancements that could throw product discovery off course.
Resource limitations
Market research, prototyping, and product testing all cost time and money. This can be a significant drain for a small business with limited resources.
Instead of trying to validate every feature or idea using every product discovery technique available, use the lean startup model. As author Eric Reis writes in his bestselling book The Lean Startup: “Remove any feature, process, or effort that does not contribute directly to the learning you seek.”
Product discovery techniques
- Customer-centric research
- Data-driven tools
- Internal brainstorming sessions
- Prototyping and iterative testing
Here are a few techniques and how they work:
Customer-centric research
Customer-centricity relies on your customers’ wants and needs to make smarter product decisions. It underpins every aspect of the research and development process, from first exploring potential concepts to developing prototypes and planning launch marketing strategies.
Customer-centric research involves:
- Reviews
- Customer interviews
- Focus groups
- User studies
- Surveys and questionnaires
You can try one or several techniques. “At Blume, we have focus groups, we do interviews, we’re constantly running surveys through our online shop,” founder Karen Danudjaja says on an episode of Shopify Masters. “I think it’s one thing to be a customer and understand what the needs are, but you have to also always be directly seeking that feedback, and that’s something we take really seriously at Blume.”
Data-driven tools
Data is the foundation of the product discovery process. It guides you from first exploring new ideas to validating them through user feedback and testing. You can use the following tools to make this possible:
- Analytics platforms such as Google Analytics
- A/B testing tools like Shoplift or Personizely
- Customer relationship management tools like Gorgias
💡Tip: Shopify Analytics collects a wealth of data about your inventory, orders, and customers, from everywhere you sell. It comes complete with data visualization tools and prebuilt reporting dashboards to make sense of your data.
Internal brainstorming sessions
It’s easy to lose track of product ideas when they’re swimming around in your head. Get your thoughts down onto paper with a brainstorming session. If you’re working as part of a team, this can get everyone on the same page and shortlist ideas worth following.
The rapid iteration technique, in particular, works great for product discovery because it lets you gather ideas without evaluating them. Have each stakeholder write down as many product ideas as possible. When time runs out, group each idea together by theme to identify trends worth exploring further.
Prototyping and iterative testing
Prototyping lets you turn your ideas into a tangible or visual product. It gives both you and your customers the chance to interact with new products in the flesh, which can highlight areas for improvement.
“We invented so many things that people use today in the outerwear world that they don’t even know came from us,” Mackage founder Eran Elfassy says on an episode of Shopify Masters. “It’s because we dared to test stuff to make mistakes at the same time. Some things worked well; some things didn’t work. But when something worked, we just made it even better. And when it didn’t work, then we moved on to the next thing.”
Product discovery FAQ
What are the stages of product discovery?
The five key stages of product discovery are:
- Preparation and initial research
- Data collection
- Analysis
- Decision making and development
- Iteration, or continuous product discovery
What are the key techniques for product discovery?
Key techniques used in product discovery include:
- Customer feedback surveys
- Focus groups
- Prototypes
- Feasibility studies
- User testing
- Competitor analysis
- Customer journey mapping
What is product discovery in ecommerce?
Product discovery in ecommerce describes how brands validate product ideas before releasing them into the market. It gathers data—such as customer feedback, feasibility studies, and production plans—to confirm a new product idea will sell before investing into further development.
