How to Conduct a Comprehensive Competitive Analysis for your Ecommerce Store
What is a competitive market analysis?
A competitive market analysis is a research method used by ecommerce store owners to gain insights into their competitors and their industry. By conducting a competitive analysis, you can understand the strengths, weaknesses, and opportunities of your competitors, as well as identify gaps in the market that may have been overlooked. This type of analysis serves as a valuable tool in the development of your ecommerce business strategy.
What is competitive market research?
Competitive market research is the process of gathering data and identifying trends related to your competitors in the market. This research helps you gain insights into who your competitors are, their products, pricing, sales tactics, marketing strategies, and more. By analyzing this data, you can identify opportunities to differentiate your ecommerce store and improve your business.
Competitive Analysis in Marketing
Competitive analysis is a critical component of marketing. By conducting a competitive analysis, you can learn valuable information about your competitors that will help you in creating an effective marketing strategy. By analyzing their marketing efforts, you can learn what channels they use for marketing, their content strategy, social media presence, and more. With this information, you can make informed decisions about your own marketing strategy to improve your business and stay ahead of the game.
How to do a Competitive Analysis
1. Determine who your competitors are.
The first step in conducting a competitive analysis is to determine who your competitors are. Identify the companies and businesses that are offering similar products or services as you. When selecting your competitors, consider both direct and indirect competition. Direct competition refers to businesses that offer the same products or services as you, while indirect competition refers to businesses that offer products that are related or complementary to yours.
2. Determine what products your competitors offer.
Once you have identified your competitors, the next step is to determine what products they offer. Analyze the features, pricing, quality, and any unique selling points or differentiators that they might have. Consider their product lines, and identify gaps in the market that may be overlooked.
3. Research your competitors' sales tactics and results.
Analyze your competitors' sales tactics, such as discounts, promotions, upsells, and more. Also, consider their conversion rates, average order value, and any other performance metrics that may be relevant to your business. With this information, you can identify areas for improvement and create a strategy that makes your ecommerce store more competitive.
4. Take a look at your competitors' pricing, as well as any perks they offer.
Another critical component of competitive analysis is pricing. Analyze your competitors' pricing strategy in detail, including how they price their products, the discounts they offer, and any other pricing considerations. Also, consider any perks or incentives they offer, such as free shipping, exclusive products, or membership programs.
5. Ensure you're meeting competitive shipping costs.
Shipping can be a significant expense for ecommerce businesses, so it is essential to analyze your competitors' shipping methods and costs. Identify areas where you can offer better shipping and consider offering free shipping to compete with other ecommerce stores.
6. Analyze how your competitors market their products.
Marketing is another critical component of competitive analysis. Analyze your competitors' marketing strategies, including their content marketing, email marketing, social media, PPC, and SEO efforts. Discover what has worked for them and consider incorporating those strategies into your own marketing plan.
7. Take note of your competition's content strategy.
Content marketing plays a vital role in ecommerce marketing. Analyze your competitors' content strategies, including the type of content they produce, the topics they cover, and the channels they use to promote their content. Use this information to create a content strategy that differentiates your business and meets your customers' needs.
8. Learn what technology stack your competitors' use.
Technology is a critical component of ecommerce businesses. Research the technology stack (tools, software, apps, CMS) that your competitors use to run their businesses. Identify what has worked for them and consider incorporating those technologies into your own business.
9. Analyze the level of engagement on your competitor's content.
Engagement is a valuable metric for ecommerce businesses. Analyze the level of engagement on your competitors' content across various channels, including social media, email, and blogs. Identify the content that has been the most engaging and consider incorporating elements of that content into your own strategy.
10. Observe how they promote their marketing content.
Research how your competitors promote their marketing content. Analyze the channels they use, the frequency of their promotions, and the messaging used in their marketing efforts. Use this information to create a marketing strategy that differentiates your business.
11. Look at their social media presence, strategies, and go-to platforms
Social media is an essential channel for ecommerce businesses. Analyze your competitors' social media presence, and identify their go-to platforms, strategies, and hashtags that resonated with their audience. Incorporate what works best for your business to improve your social media performance.
12. Perform a SWOT Analysis to learn their strengths, weaknesses, opportunities, and threats
Perform a SWOT (strengths, weaknesses, opportunities, and threats) analysis of each competitor to gain a deeper understanding of their business. Evaluate their performance and uncover new opportunities to improve your business strategies.
Competitive Product Analysis
In addition to researching your competitors, it is essential to conduct a competitive product analysis. By analyzing your product features and pricing compared to your competitors, you can differentiate your business and create a more competitive ecommerce store.
Step 1: Assess your current product pricing.
Compare your product pricing to your competitors to ensure your prices are competitive. Ensure your prices are moderate and consider offering discounts, bundles, or promotions to improve your sales.
Step 2: Compare key features
Compare the key features of your product to your competitors to identify unique selling points and differentiators. Focus on the features that are most important to your target customers.
Step 3: Pinpoint differentiators
Pick out any unique features of your product that your competitors do not offer. These unique features can be used as differentiators to improve your product's competitive advantage in the market.
Step 4: Identify market gaps
Identify market gaps that your competitors have overlooked. Use this information to develop new products that meet the needs of your target audience.
Competitive Analysis Example
For example, let's analyze the competitive market between Sony and Nintendo. Sony produces the PlayStation, while Nintendo produces the Switch. Sony's strengths include its extensive library of gaming titles, a powerful gaming console, and a well-established brand. Nintendo's strengths include innovation and producing exclusive titles like "Animal Crossing" and "The Legend of Zelda."
However, Sony could improve its product offering by either expanding their exclusive title offerings or lowering game prices. Meanwhile, Nintendo could improve its online gameplay platform's overall quality, as this area has been seen as its weakness.
Competitive Analysis Templates
There are various templates available that can help you conduct a competitive analysis that meets your business's specific requirements. You can find templates on online resources like SEMRush, Moz, HubSpot, and other marketing websites.
How Does Your Business Stack Up?
By conducting a comprehensive competitive analysis, you can determine how your business stacks up against the competition.This information can be used to develop a strategy that improves your ecommerce store's competitive advantage, and drives more traffic and sales to your online business.