How to Validate Your Retail Business Idea With a Focus Group

If you’re reading this article, you likely have a business idea that you think might be worth pursuing.

Some entrepreneurs make the mistake of running with an idea before running it past their potential customers. According to the U.S. Bureau of Labor, only half of small businesses survive their first five years.

How does a business ensure their product or service will gain traction, particularly in retail? When your target market is as saturated as retail, it’s a good idea to do your homework — and as part of that due diligence process, you can collect the opinions of your ideal buyers.

One way to validate your idea with your target audience is to organize a focus group. Gathering ideas and data from a focus group can be the difference between jumping into a retail endeavour with your eyes closed, or starting it off on the right foot.

According to the Marketing Research Association, 70% of all market research dollars at Fortune 500 companies are spent on focus groups.

When Lego realized that only 9% of those who played with their product were female, they decided to hire researchers to help them close the gap. After four years of observing the playing habits of 3,500 young girls and their mothers, Lego launched a line called “Friends”. This line introduced larger, more vibrant blocks, figurines, and new packaging. As a result, the ‘Girls Building Sets’ category experienced double-digit growth of 28% from the previous year.

Want to experience similar traction with your new retail idea? Here, we’ll dive a little deeper into the concept of focus groups and also offer some insights on how to create one of your own.

What is a Focus Group?

A focus group engages would-be customers in an interactive experience that exposes them to your business idea. It’s a moderated session that gathers feedback, opinions, and criticisms based on questions or activities that you create. If well executed, they can offer a return of invaluable insight and help guide decisions on if and how to approach your new business (or launch your new product).

They can also be held online or in person, which offers retailers significant flexibility if you’re hoping to manage your own group.

Advantages of a focus group	Disadvantages of a focus group
Very useful to help you gain detailed insight into your potential customers opinions and perceptions of your new business idea	Without experience, they can be tricky to manage
Less expensive and time consuming than holding a series of one-on-one interviews	There’s risk that disagreements or irrelevant discussion can derail the group
Gives you an opportunity to clarify on the spot	Some participants may find group situations intimidating which may lead to “groupthink” (more on this later!)
Beyond validation, they can also help build the foundation for how you market to the same customers	May not be as in-depth as one-on-one interviews

While focus groups certainly have drawbacks and advantages, this kind of qualitative study can provide some powerful data as part of your market research.

Feeling a little overwhelmed by the concept? The key to any effective focus group is a thorough and thought-out plan. Here are a few tips to walk you through the process of establishing and running your first group.

What to Consider When Planning a Focus Group

The best place to begin is with what you want to learn. In this case, you want to know whether your retail business idea (or new product) is a winner. Keep that at the core of everything you do.

Finding Focus Group Participants

Next, consider who should be involved. You want to be able to identify underlying similarities among the group, but some diversity will allow for insightful and contrasting opinions. When thinking of people to invite, consider how variables such as gender, age, and class can affect the group dynamic. Aim for a group of six to ten to ensure you can strike up a lively conversation. The keyword here is conversation, not debate. Try recruiting participants for free through social media channels or community boards like craigslist — ideally, they won’t know each other.

Plan for your session to last about an hour, but never more than two. The longer the session, the more risk of fatigue among the group. Respect the time your participants are giving you, and consider rewarding them with a small incentive like a gift card, other voucher, or free merchandise. Their time is valuable, and offering something in return for their input can help ensure they’ll offer honest opinions and will fully engage in your session.

Assembling Your Questions

Lastly, be very thoughtful about the questions you pose to your focus group. These questions must incite conversation and, ultimately, give you the validation you’re looking for.

Here are some tips for writing effective questions:

• Keep them open-ended. You want the question to be a jumping off point for the group. You don’t want the conversation to fizzle with a simple ‘yes’ or ‘no’.
• Make them clear and concise. You don’t want participants to hesitate sharing their thoughts because their confused about what you’re asking. Employ the K-I-S-S method here!
• Speak in the group’s language. The conversation should be natural if you want the group to feel comfortable sharing their feedback openly.
• Focus questions around one thought or goal. Don’t lump questions together or you may find participants neglecting one of them.

Consider these to get you started.

1. Overall, how interested are you in the product or concept?
2. What specific features/elements of the product/concept spark your interest?
3. What, if anything, do you find unappealing about this product or concept?
4. How likely are you to purchase this product (or shop at this store)?
5. What would you say to convince your friend or family member to buy this product (or shop at this store)?
6. Do you have any suggestions on how the product or concept can be improved?

The order of your questions can also influence the outcome, so run a test session on family, friends or partners to capture some quick feedback. Allow for 15 to 20 minutes of discussion per question, so plan for eight questions that will get you the validation you’re looking for.

Conducting the Focus Group

You’ve recruited an eager group of participants and you’re feeling confident about your plan. It’s time to set it in motion!

Here are some tips for the day-of:

• Choose a location that’s comfortable and conveys a feeling of openness. Provide light snacks and water to keep participants as focused as possible while you have them. If the location allows, seat participants around a circular table for easier flow of conversation.
• Ask participants to show up at least 15 minutes before start time so that your session can begin in a timely manner.
• Use the buddy system. Bring along a friend or partner you can trust to take thorough notes. These will be what you revisit and analyze. If you’re able to record the session, do that as well.
• Arm yourself with tactics to steer the conversation when it gets off course.

One thing to be especially aware of is a phenomenon called “groupthink”. Groupthink happens when one enthusiastic participant offers an opinion that the rest of the group then adopts as their own because they don’t want to be seen as a detractor. In some cases, great ideas can come from participants building off one another, but make sure it doesn’t get in the way of absorbing valuable differing opinions.

There are a few things you can do to avoid this. Give participants an assignment a week prior to the session to give them an opportunity to form opinions before hearing others. In the same vein, it helps to ask participants to write down some of their answers during the session that you can then collect and use to steer the conversation. And finally, when you notice groupthink happening, try challenging the group with the opposite assumption and see where it goes.

Organizing and Implementing the Findings

This is where your trusty note-taker shines. You should have plenty of notes to work with at the end of your session, but strongly consider recording the focus group to avoid missing any important insight. This will let you transcribe the session and more easily draw key insights.

Start by grouping the participants’ responses to each question. Jot down any patterns you see in their responses. What themes arise from these responses? Categorize the themes and label them. This should give you a snapshot of your findings.

Consider whether your findings meet the objective you’ve set. Most importantly, ask yourself, what this all means.

• Were you surprised by any findings?
• Does this knowledge confirm what you believed from the outset?
• What insights have you gained?
• What else do you need to know?
• How do these findings change your perspective?

The More Feedback, the Better

Now that you’ve run your first focus group, run another. Take what you’ve learned and modify the session to learn even more. Once you start hearing the same feedback repeated over and over, you know you’ve got what you’re looking for.

Do you think a focus group is the right method to validate your business idea?