The year is 2025….. Cue flying cars and futuristic dystopian scenes…
Although Hollywood’s future predictions are mostly way off, one data-led prediction that will likely unfold is that by 2025, online sales are expected to represent almost 25% of total worldwide retail sales.
So what that means is that almost any product you can think of is already being sold by someone else.
That’s both good and bad news. It means there is customer demand, and where there’s demand, there’s potential for growth and ongoing profits. But it also means competition! Competition is healthy, but you must know what your competitors are doing to compete.
That’s where competitive analysis comes in. But first, let’s discuss…
What is eComerce competitive analysis?
In a nutshell, competitor analysis is researching and identifying competitors within your industry. This process involves detailed research and data to help you understand your competitors’ activities and, strengths and weaknesses.
Key benefits of competitive analysis include:
- Identifying your Unique Selling Proposition (USP): Pinpoint what sets your business apart from the competition, enabling you to communicate your value proposition to customers effectively.
- Improving user experience: Analyse your competitors’ websites to identify best practices and areas for improvement in your site’s design, functionality, and user journey.
- Capitalising on opportunities: Identify gaps in your competitors’ offerings and leverage these insights to develop innovative products, services, or marketing campaigns.
- Effective brand positioning: Understand how your brand fits into the market landscape and develop a clear and compelling brand identity.
- Optimising marketing strategies: Analyse your competitors’ marketing channels and tactics to identify opportunities for your advertising campaigns and content creation.
- Maintaining competitive pricing: Stay on top of pricing trends and make sure your pricing strategy is competitive.
Conducting a competitive analysis can help you make data-driven business decisions and drive growth.
How to conduct competitor research
Step 1. Identifying Your eCommerce Competitors
First things first, you need to know who you’re analysing. You probably have an idea about who your top competitors are, but dig deeper — sometimes, the biggest competition is the most unexpected.
With just a few clicks, you can learn about your competitor’s brand, customer experience, and way of interacting with customers. You can get an enormous amount of valuable information by properly researching your competitors’ websites and social media sites.
Try searching for your products using the keywords and terms your potential customers would use, and check out the pages that rank highly on Google (mainly those with the highest rankings, as those are typically the first ones that potential customers click).
Have a look at your competitors’ social media profiles to see how they are positioning themselves.
Use Amazon as a resource to find businesses that offer similar or the same products and services as yours.
You can follow their blog and social media, or even join their mailing list, to get an insight into the special deals they offer and how they interact with customers.
Expert hack: Don’t join their mailing list using your business’s official email.
Step 2. Analyse The Data
Once you’ve identified your competitors, compile a list in a spreadsheet, including basic information about each one, and organise them as follows:
Direct Competitors: Brands offering similar products to a similar target market.
Indirect Competitors: Companies that sell similar products to a different customer base or offer different products to the same audience.
Tertiary Competitors: Brands that offer products similar to yours but not directly aligned — such as a sportswear company if you sell running shoes.
To achieve the best results from your competitor analysis, establish a range of benchmarks for comparison, such as:
- Pricing: Compare prices, discounts, and overall pricing strategy.
- Distribution channels: Assess sales channels, both online and offline.
- Product range: Evaluate product variety, breadth, and depth.
- Product features and quality: Examine product attributes and performance.
- Online shopping experience: Analyse website usability, checkout process, and customer service.
- Delivery: Compare delivery options, costs, and timescales.
- Innovative technology features: Consider the use of technology to improve the customer experience.
Record these insights in your spreadsheet and then analyse where you can do as good or better than the others!
Competitor research aims to identify strengths and weaknesses and clarify what you should change in your business. You can also use a SWOT analysis to clarify the information gathered.
Step 3: Use the Results to Inform Your Business Strategy
Once you have gathered and analysed all the necessary data, it’s time to refine your marketing and sales strategy.
Understanding your competitors’ strengths and weaknesses is vital, but equally important is understanding your customers’ needs and behaviours. By combining these insights, you can develop a strategy that not only outperforms the competition but your target audience will love!
Gain a Competitive Edge with eCommerce Analysis
Understanding your competitive landscape prevents aimless experimentation. Instead, you can learn from successful rivals and identify opportunities.
Begin by pinpointing your key competitors (think outside the box). Then, delve into their marketing tactics, customer feedback, website design, and overall customer experience to find your unique position in the market.
Wrapping Up
Competitor analysis helps you learn about others and identifies areas where your brand can excel. As a business, you have a set of intangible assets that make you different. Expertise, market knowledge, marketing and branding skills all count!
Remember, competitive analysis for your eCommerce business is only a snapshot in time!
The competitive landscape is constantly evolving. Your competitors will perform a competitive analysis of your business and respond to your successes, so you’ll need to rethink and adapt. Your ability to continually reassess the market will determine whether you can maintain and grow your market share.
The team at Fourmeta UK in London hopes this article has given you a basic understanding of how to do competitor research. You’re on your way to building and maintaining a killer eCommerce brand that is always a step ahead of its competition. Good luck!
Also Read: Analyzing Competitor Prices: Tips for Using Pricing Intelligence Tools