Competitive Analysis: Unleashing Your Ecommerce Superpower
What is a competitive market analysis?
A competitive market analysis is a process of researching and analyzing your competitors - what they offer, how they sell and market their products, and what their strengths and weaknesses are. In short, it's a method used to collect valuable insights so you can create a successful ecommerce strategy.
What is competitive market research?
Competitive market research involves understanding the structure and dynamics of your industry by researching your competitors. It helps you to understand your position within the market and develop a competitive strategy to reach your target audience more effectively.
Competitive Analysis in Marketing
Competitive analysis in marketing is focused mainly on how your business competes with others. By understanding the strengths, weaknesses, opportunities, and threats of your market competition, you can tailor your ecommerce strategy to stand out and create a competitive edge.
How to do a Competitive Analysis
1. Determine who your competitors are.
Explore which other businesses in your market may compete with you and may be targeting the same customer base.
2. Determine what products your competitors offer.
Find out what products your competitors sell, the key features of their products, and how they differentiate from yours.
3. Research your competitors' sales tactics and results.
Research and analyze their sales funnel and sales process, from their website design to their checkout process, to know your competition better. One free tool that can help analyze your competition’s site design and get complete insights into their digital marketing strategy is SimilarWeb.
4. Take a look at your competitors' pricing, as well as any perks they offer.
Monitor the competitiveness of their pricing and what kind of deals or offers they provide to customers. This will help you understand your price point and what customers expect as far as deals and discounts.
5. Ensure you're meeting competitive shipping costs.
Shipping is an essential component of ecommerce, and its importance is only growing. Evaluate whether you’re spending too much on shipping and see if there’s an opportunity to reduce costs by comparing your rates to those of your competitors.
6. Analyze how your competitors market their products.
Examine how your competitors promote their products, what channels they use, and how they approach their target audience. Create a summary of their social media posts and analyze their content strategy. Hence this will help you create a unique perspective and add value to your audience.
7. Take note of your competition's content strategy.
Content is king in the current digital age, and knowing how your competitors approach their content can be valuable for improving or tailoring your content marketing strategy.
8. Learn what technology stack your competitors use.
Your competitors' technology stack can provide insights into their digital marketing and website-building process. This data can help you improve your own website and marketing tech stack.
9. Analyze the level of engagement on your competitor's content.
Observe how your competitor's content is performing by checking the degree of engagement on their posts. High engagement can show you that their audience is interested in the content they’re publishing and what topics matter to their customers.
10. Observe how they promote their marketing content.
One way to see the effectiveness of your competitor’s content is to track where they promote their content across different channels. This can include social media, email, and even through a paid advertising campaign.
11. Look at their social media presence, strategies, and go-to platforms
Identifying the social media platforms where the competition is active can help you better target your audience and amplify your social media reach. Observing their strategy, such as the frequency and timing of posts and the type of content can enable you to differentiate your own social media plan and set yourself apart.
12. Perform a SWOT Analysis to learn their strengths, weaknesses, opportunities, and threats
A SWOT analysis is extremely useful to define and evaluate your competition. This strategy will help to find out where the competition’s strengths, weaknesses, opportunities, and threats are hiding. These insights can provide a basis for both strengths in your own brand and possible weaknesses to avoid.
Competitive Product Analysis
Step 1: Assess your current product pricing.
The first step in a competitive product analysis is to evaluate your prices and map them to your competitors to identify any deviations.
Step 2: Compare key features
Outline the key features of your product and contrast them with the ones offered by competitors on the market you can build a better product following this procedure.
Step 3: Pinpoint differentiators
Define the differentiators that help your product stand out to customers, making sure to emphasize them in your marketing.
Step 4: Identify market gaps
Look for the gaps your competitors aren't addressing and start tailoring your product to fill these market gaps. This will create a unique selling point for your products and benefits.
Competitive Analysis Example
Sony vs. Nintendo: Not all fun and games
Sony and Nintendo have been competing in the gaming industry since the early days. Sony entered the market with the PlayStation, while Nintendo began with their 64-bit console. Sony has been successful in the market because it consistently creates high-quality gaming content, which enables them to gain a great audience. Meanwhile, Nintendo has consistently focused on the approachable side of gaming, creating titles that are easy to pick up and play. However, Sony has consistently shifted to produce interactive and multitouch games, while Nintendo has still remained relatively nostalgic with products like the Switch. Combined research in your ecommerce industry, philosophy, and products can help you stand out and create your unique selling point.
Competitive Analysis Templates
Using templates for competitive analysis designed by ecommerce experts will help you capture all the information you need for a thorough analysis..
How Does Your Business Stack Up?
Get ahead of your competitors by understanding their operations, processes, and approach to digital marketing. Once you understand your competition, it's easy for your ecommerce business to stand out and create a strategic edge.