What is a competitive analysis?
Competitive analysis can be described as a technique that involves analyzing important competitors to gain insight into their sales, products, and marketing strategies. Making better business decisions, preventing competitors from entering the market, and gaining market share are only some of the advantages of competitively conducting an analysis of the market.
Competitive analysis can help you discover how your competitors operate and uncover potential opportunities to beat your competitors.
It also allows you to keep abreast of the latest trends in the industry and ensure that your product is always in line with and surpassing the industry’s standards.
Why is competitive analysis important for e-commerce?
Competitive research is crucial in any growth strategy. While this isn’t always true, competitive research should be an essential part of the marketing strategy of any successful online business.
Incorporating as many (relevant) details as possible regarding your competitors will result in an accurate evaluation of your business’s place within the marketplace compared with your main competitors.
It can also assist you in the following:
- Find the USP (unique selling point) and distinguish your online business from your competitors.
- Research the functional features of your competitors’ websites to identify how to improve and develop your site for better user and customer experience;
- Profit from opportunities by studying their strengths and weaknesses
- Find out how to present your brand on the market;
- Discover the strategies used by your competition and find out more about their primary traffic sources.
- Create campaigns for advertising that are focused on the channels and tools in which your competition is especially interested.
- Keep your prices at competitive prices in the pricing policies you have in place.
Factors you should consider before competitor analysis.
Market share percent
Comparing the market’s performance in percentage can help identify the most dominant local competitors. However, do not completely exclude the larger competitors since they’ll have a lot to show you how to be successful in your field. Instead, you should follow the 80/20 rule to keep an eye on your direct competitors to 80% (companies with a similar market share) and 20% of top competitors.
Pricing
Find out how much your competitors charge and determine where they are in the quality versus quantity spectrum.
Marketing
What kind of marketing strategy is each competitor using? Examine the websites of competitors as well as their social media strategies, the kind of events they organize, their strategies for SEO, their taglines, and the current marketing campaigns. Follow these steps to develop the perfect business marketing plan. ]
Strengths
Find out what your competitors are doing well and what works for their business. For example, do their reviews suggest they offer an outstanding product? Do they have high brand recognition? Do you have the ability to test products from a competitor yourself to determine which ones are performing better?
Weaknesses
Determine what your competition could do better to give you a competitive advantage. For example, do they have poor social media strategies? Do they not have an online shop? Do they have a website that is out of date?
Geography
Examine where your competitors are located and the regions they serve. For example, are they brick-and-mortar businesses, or are most of their business conducted online?
Culture
Examine your competition’s goals regarding employee satisfaction, objectives, and company environment. For example, are they the kind of business promoting its year of establishment, or are they new startups? Review employee testimonials for more information about the culture of competitors.
Customer reviews
Review your competitors’ customers’ reviews, both good and negative. For example, if you use a 5-star system, review 1-star, 3-star, and 5-star reviews. Three-star reviews are usually the most authentic.
Free competitive analysis template
How to conduct a competitive analysis for ecommerce business
1. Set your goals
Before beginning the competitor research, deciding what you want to know is important. If you don’t do this, you could focus on the wrong areas or miss important details.
Some examples of goals to achieve your competitive eCommerce marketing analysis include:
- Find out which social media channels perform the best against your competitors.
- Examine who is ranked highly on Google and what the reason is.
- Monitor the kind of emails they’re sending to their subscribers in addition to how many times.
2. Identify Your Direct and Indirect Competitors
Is it impossible to analyze your competition without being aware of their identity? Recognizing your competition, be it indirect or direct, isn’t an easy process. However, we’re here to assist you!
There are many methods to identify your rivals. Most people know their main competitors. They are, after all. However, it’s difficult to keep up with new companies entering the market. Here’s a way to accomplish that
Google Search
Google Search is the simplest and most effective method to locate your competitors. Just search for the item you sell, except if you’re using the VPN, and most results will list local businesses that sell the product.
This way, you will quickly determine your competitors directly. Most of the top results are the best-known competitors in the marketplace. Therefore, it is recommended to keep an eye on everyone within the first three pages, at the very least.
Facebook isn’t a typical search engine, but you can find many details from the search result. It’s due to its large number of users. Every company has a Facebook page. So if you search for the name of the product or keywords such as “Buy Product Name,” you’re likely to find a page that also sells the exact product you are selling.
LinkedIn has gained enormous recognition among professionals. It is likely that your competition has also put its feet on LinkedIn. LinkedIn groups and LinkedIn answers are excellent sources for anyone looking to find potential rivals.
Youtube
Youtube is the most well-known video-sharing platform and can assist you in identifying competitors. The immense appeal of Youtube has brought in a lot of businesses to this site. You can search for your business on Youtube and discover many competitors easily!
Quora
3. List and rank your competitors
It’s now time to make an overview of the competition you’ll consider in your analysis. Suppose you’ve conducted some market research before; it should be easy. If not, run an easy Google search on the kind of products you’re selling and check out who shows up.
A bit more challenging is to classify them in terms of importance. Although you can certainly gain something from studying competitors of all possible types, it will take a significant amount of time. Also, the strategies employed by a brand that targets people who are different from yours are likely to not be as intriguing to you as those employed by a company that is targeting the same market.
4. Check the Product or Services Your Competitors are offering?
It is time to look into the products and services they offer. What makes their products superior to yours? If their products are superior to yours, what could you do to your products in order to make them more customer-centric?
Additionally, it is also important to know what the cost of their products is. Are they also offering discounts? In this way, you’ll be able to better enhance your products and improve them over the competition.
5. Find out your competitors’ market position.
Your competitive positioning is the primary “differentiator” from others. This information is simple to discover when you analyze the indirect competition. Their approach will be different from yours.
The difference is their unique value proposition which is a feature that draws new customers to theirs. Every brand should have one if they want to succeed.
To find out what position the competition’s brands have to market share, you must do these things:
- First, determine the main set of customer requirements that you intend to solve.
- Select a region in which you’d like to research.
- Choose if you wish to monitor the whole market for the product or just a particular segment.
- Third, choose the price range you want to research (cheap/low-end items, mid-market high-end).
- Determine the primary benefit that the client receives at each price point.
- Sort competitors according to the chart’s cost and the level of main benefits.
6. Take a look at your competition’s prices and current deals.
Perceptual mapping allows you to see how competitors price their goods and how you might fit. This information provides estimates of the amount people will spend on different kinds of products (from various brands).
However, it’s not only the quality of the product or feature variety that influence customers’ price sensitivity.
For instance:
- 43 % of all customers are willing to pay more for better ease of use, like faster delivery or low-hassle service.
- In addition, 71 % are willing to pay a premium price for brands that can provide complete traceability of their products.
7. Examine their SEO
SEO can help customers discover your business through the results of search engines.
SEO is the process that can get you, and your competition noticed in search results such as Google. The more SEO-friendly a website can be, the more likely it will rank in results. While you’ll get an outsider’s perspective of how your competitors conduct their SEO, there are a few points to be aware of to aid in your analysis of competition.
Blog: SEO utilizes keywords to get rankings. The more text a site contains, the more keywords an engine can look for. One of the most efficient ways to include that additional text is by using blogs. Therefore, companies with blogs could be more competitive than those without blogs.
Structure of the Site: It is possible to find different ways to incorporate keywords on websites, and most of them relate to the design aspects of the website. Note down the name of each page on a competitor’s site and study how they structure their URLs, search for internal hyperlinks, and examine the alt text for images (which will appear by hovering your mouse on the photo). Find out what’s working properly and what’s not, and take note of the latter.
8. Check their customer reviews
One of the best ways to assess a competitor’s strengths is to look at what customers say about them. Look through the reviews they have on their site, as well as any posts on social media that feature the company. Note what customers have praised them for helping you implement the same techniques in your own company. You should take note of the things customers have complained about so that you can develop policies around the same complaints.
9. Ensure you are being competitive with shipping.
Shipping is an important factor in purchasing for most shoppers. However, according to the Baymard Institute, shipping costs are among the most common factors that lead to cart abandonment.
Know what your competitors are charging:
- Same/next day delivery
- 2-day shipping
- Standard shipping
- International shipping
Analyze the different logistics companies to determine if you can offer the same prices. In general, online retailers can negotiate bulk discounts on long-term or shipping contracts.
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