What is Competitive Analysis in eCommerce?
eCommerce is a competitive industry, and it's important to know your competitors to stay ahead. By conducting a competitor analysis, you can learn about your rivals' strengths and weaknesses and find potential opportunities for your business.
There are several steps involved in conducting a competitor analysis. The first step is to identify your competitors. This can be done by searching for similar products or services online. Once you have a list of competitors, you'll need to research their products, growth, and marketing strategy. This can be done by reviewing their website, social media profiles, and other online resources.
Once you have gathered this information, you can begin to evaluate your competitors' strengths and weaknesses. This will help you develop a strategy for competing against them.
There's no one-size-fits-all approach to creating a successful eCommerce competitor analysis – it depends on the industry your business is in.
Before we look at how to actually do the competitive analysis, here is a categorised list of tools that will make the process easier, and what they can be used for.
Ahrefs: Great for looking at how many backlinks a site has and enables you to look at what kind of coverage your competitors are getting from other websites and what sort of PR they are doing. Also good for getting an estimate of how much organic traffic a website gets and what kind of keywords it is ranking for.
SimilarWeb: Used to track competitor websites and apps to see an estimated amount of traffic they get from multiple different channels (organic, paid, referral, etc) as well as to research markets and your target audience.
SEMrush: Great for looking at what your competitors are doing with paid search. They have also come on leaps and bounds over the last few years in regards to the information they have for organic traffic. It's a great alternative to Ahrefs, as well as having better data for paid search.
BuzzSumo: With BuzzSumo, you can see the most popular content on any given topic or website, as well as see which pieces of content are being shared the most on social media. This can help gauge what content is resonating with your audience and further tailor your content strategy. Additionally, you can use BuzzSumo to see what kind of content your competitors are producing that is doing well and consider ways to adapt or improve upon it.
Social Animal: Tool with similar features to BuzzSumo.
Sprout Social: A social media management platform that can be used for competitor analysis. It allows you to see how your competitors are using social media, what kind of content they are publishing, and how it is performing. You can also use Sprout Social to track your own social media performance and compare it to your competitors.
Owletter: A tool that lets you see the newsletters your competitors send. This is a great way to get an insight into their email marketing strategy.
Phlanx: A platform that allows you to measure the engagement of your competitor's social media accounts on platforms like Instagram, Facebook, TikTok, and YouTube.
Companies House: Useful for checking our your competitor's financial data. Only available for limited companies in the UK.
Adbeat: Tool that helps you track your competitor's online advertising campaigns. It provides data on where ads are being placed, how much traffic they're generating, and how much money is being spent.
WhatRunsWhere: Another tool that helps you track your competitor's online advertising campaigns. It provides data on where ads are being placed, how much traffic they're generating, and how much money is being spent.
Mention: Mention allows you to set up alerts for when your brand, competitors, or keywords are mentioned online. This includes social media, news articles, blogs, and forums.
Google Alerts: Google Alerts is a free tool that allows you to set up alerts for when your brand, competitors, or keywords are mentioned online.
Hootsuite Insights: With Hootsuite Insights, you can track competitor mentions on social media, as well as get insights into their social media strategy.
Facebook Ad Library: A tool that allows you to see all the active ads that a Facebook Page is running. This is useful for seeing what kind of messaging and positioning your competitors are using in their advertising.
Before starting your competitor analysis
Create a spreadsheet
To keep track of your competitors, it's a good idea to create a spreadsheet. This will help you to organise your thoughts and find patterns more easily.
Your competitor analysis spreadsheet should include the following columns:
- Competitor name
- Website URL
- What they sell
- Their strengths
- Their weaknesses
- Keywords they rank for
- Social media followers
- Paid search spend
When you have collected this data, you can start to look for patterns and insights. For example, are there any common keywords that they all rank for? Are there any backlinks they all have in common? Do they all use similar marketing strategies? By looking for these patterns, you can begin to formulate your competitive advantage.
Your business and its goals
Knowing your business and its goals are essential before carrying out competitive research. This allows you to focus your efforts on areas where you can differentiate yourself and better understand what unique value you can offer to potential customers. It also allows you to more easily identify opportunities for innovation. Furthermore, a clear understanding of your business's goals will help you to evaluate whether or not a given competitor is a threat. Finally, by defining your business and its goals up front, you can avoid wasting time and resources on pursuing strategies that are not aligned with your core objectives.
Answer these questions for yourself:
- What is your current place in the market? Are you a market leader, startup, niche within your industry, or something else?
- What are your mission and vision?
- Who is your ideal customer?
- How much traffic do you get?
- Which marketing channels are performing (or underperforming)?
Collecting data about your competition is important, but it's not enough. You also need to know what makes your company different and how you can stand out from the competition.
Once you have a deeper understanding of your eCommerce business, you need to set some goals for your competitor analysis. Here are a few examples:
- Do you want to increase your organic traffic?
- Do you want to improve your customer service?
- Do you want more followers on social media?
- Do you need to improve your conversion rate?
- Do you need to more clearly define your USP?
How to Conduct an eCommerce Competitive Analysis
Identify and categorise your competitors
There are two types of competitors: direct and indirect competitors.
Direct competitors are businesses that offer the same product in the same market. They are direct substitutes for one another, and they compete for the same customers.
Indirect competitors, on the other hand, are businesses that offer a different product or service in the same market. They may be competing for the same customers, but they are not direct substitutes for one another. Indirect competitors usually have different business models, and they often cater to different segments of the market. As a result, they don't necessarily compete directly with one another.
Understanding the difference between these two types of competitors is essential for any business owner. After all, knowing who your direct competitors are is the first step to developing a winning marketing strategy.
Do product research
As you research your competitors, take note of their product offerings. Do they have any new products that you don't have? How many of their products are similar to yours? Are there any features of their products that you don't have?
You'll also want to compare prices and availability. Are their products priced higher than yours? Are they available in more locations than you are?
Finally, consider what products your competitor doesn't offer that you do. What can you do to make your product stand out in the market?
This comes under product research, but it deserves its own section as 50% of consumers list price as one of the most important things they consider when making a purchase.
Monitoring your competitors' prices is an excellent way to understand their go-to-market strategy. By observing which segments they target and what type of brand positioning they pursue, you can gain valuable insights. This information can enable you to make more informed strategic decisions, such as developing products that cater to underserved segments or modifying your strategy to gain a greater share of the market.
Price monitoring is a vital but challenging task for eCommerce stores. By tracking the competition, you can stay ahead of the market and ensure you're making as much money as possible. You can tell which products are underperforming or nearing the end of their life cycle by analysing their pricing history. Steep discounts usually mean that the retailer is worried about not being able to sell enough stock, while stable prices indicate a successful distribution.
You can monitor your competitor's prices in many ways, and it doesn't have to cost you anything:
- Use a spreadsheet and manually get the information from your competitor's websites
- Use web scrapers, or get a developer to build you a script that will get the information
- Use a purpose-built tool like Prisync
Budget and funding
When it comes to beating your competitors, you have to be realistic about who you can beat in the near future.
How much money does your competitor have to spend? This is an essential question, as it will determine their marketing strategy and the types of campaigns they can run. If they have a limited budget, they'll likely focus on low-cost tactics like SEO and content marketing. If they have a large budget, they may pursue more expensive channels like TV advertising.
Understanding your competitor's budget will give you a better idea of the types of campaigns they're likely to run and how to respond accordingly.
When doing a competitor analysis, it's important to look at more than just their market share and product offerings. It's also important to look at their financial data to get an idea of how healthy they are and how much money they're making.
One place to find this information is on the company's website, but if you're looking for more detailed information, you can check out Companies House. This is a website where businesses in the UK are required to file their financial information.
Looking at your competitor's financial data can give you a good idea of how they're doing overall and how much money they're making. It can also help you identify any weak points that you can exploit.
LinkedIn is a great resource for understanding your competitor's team size and composition. By looking at their LinkedIn profile, you can get a good idea of how big their team is and what type of people they have working for them.
If your competitor is a large company, then their LinkedIn profile will be quite comprehensive. However, even if your competitor is a small company, you can still get some valuable insights by looking at their employees' profiles. This information can help you learn more about what your competitor has to spend because if they have a lot of staff they must have larger budgets.
If your competitor is expanding, one way to see this is by looking at their job listings. If they're advertising new positions, it means they're hiring new people and expanding their business. This then shows that they must be doing well.
Check how user-friendly your competitor's websites are
If your competitor's website is hard to use, it may be a sign that they're not focused on the user experience. This can be a weakness that you can exploit by making sure your website is as user-friendly as possible.
You can check how user-friendly a website is by looking at factors like the following:
- The layout of the website
- How easy it is to find what you're looking for
- The quality of the writing
- The overall design
If you find that your competitor's website is lacking in any of these areas, you can use this to your advantage by making sure your website is better in these areas.
Check the loading speed of your competitor's websites
The loading speed of a website is important for two reasons:
Users expect websites to load quickly, and if a website takes too long to load, they're likely to leave.
If your competitor's website is slow to load, it could be a sign that they're not paying attention to this important factor. This is something you can use to your advantage by making sure your website loads quickly.
Competitors are always looking for an edge over their rivals, and one way to gain an advantage is by positioning your brand in a favourable light relative to theirs. Measuring your competitor's brand positioning can give you valuable insights into how they're perceived by consumers and how you stack up against them.
Measuring your competitor's brand positioning can be a complex task, but there are some key indicators that you can look at. Social media can be a good starting point, as you can get a sense of how customers perceive your competitor's products and services. Press releases and website copy can also give you insights into how your competitor is positioning themselves in the market. And finally, interviews with the founder or other key executives can provide valuable insights into the company's overall strategy and goals.
By taking the time to measure your competitor's brand positioning, you can gain a clear understanding of where your company stands in the marketplace - and make decisions accordingly.
Consider the following questions while determining your competitors' brand positioning:
- What message do they convey to customers with their content?
- Is their brand voice strong?
- What emotions do they try to elicit in their content?
Your aim should be to produce content that is more engaging and interesting than your competitors. Express your company’s story in an interesting and unique way, and make sure that your customers feel valued and appreciated. Use language that is emotive and inspires action, and focus on the benefits of working with you rather than just the features of your products.
Analyse your competitor's content strategy
If you're serious about improving your content marketing strategy, you need to take a close look at what your competitors are doing. By analysing their content strategy, quality and reach, you can learn a lot about what works and what doesn't - and adapt your approach accordingly.
Here's a quick guide to analysing your competitor's content:
1. Content Strategy
First, take a look at your competitor's overall content strategy. What kind of content are they producing? What topics do they cover? How often do they publish new content?
By understanding your competitor's content strategy, you can get a better idea of what kind of content is most likely to be successful in your industry. If you see that they're having success with a certain type of content, you can try to replicate that in your strategy.
2. Content Quality
Next, take a look at the quality of your competitor's content. Is it well-written and informative? Does it provide value to their audience?
If you find that your competitor's content is of poor quality, this is a good opportunity to improve upon it in your content marketing efforts. However, if their content is high-quality, you'll need to make sure that your content is up to par.
3. Content Reach
Finally, take a look at how far your competitor's content is reaching. Are their articles being shared widely on social media? Are they getting picked up by major news outlets?
If you find that your competitor's content has a good reach, this is a good indicator that their content marketing strategy is working. You'll want to make sure that your content is just as visible and accessible if you want to compete.
By taking the time to analyse your competitor's content, you can learn a lot about what it takes to be successful in content marketing. Use these insights to improve your content strategy and give yourself a better chance of success.
Understand and measure your competitors social media presence
Your competitors are already active on social media, so it's important to understand and measure their presence. There are several ways to do this:
1. Use a social media monitoring tool like Hootsuite Insights or Mention to track mentions of your competitor across the web, including social media. This will give you an idea of their reach and influence.
2. Check out their social media profiles. How many followers do they have? How often are they posting? What kind of engagement are they getting?
3. Take a look at their website. Are they using social media buttons or widgets? Do they have share buttons on their blog posts? This can give you an idea of how well they're integrating social media into their overall marketing strategy.
4. Use a tool like Google Ads Keyword Planner to see how often your competitor's name is being searched for. This can give you an idea of their brand awareness and visibility.
5. Check out their customer reviews on sites like Yelp, Google, and Amazon. What are people saying about them? This can give you insights into their reputation and customer service.
6. Finally, try searching for your competitor on social media platforms like Facebook, Twitter, and Instagram. See what kind of presence they have and what people are saying about them.
Find out where your competitors are advertising
Your competitors are likely advertising in the same places that you are or should be, so it's important to understand where they're advertising and how effective their ads are. Here are a few ways to do this:
1. Check out their website. Where are they placing their ads? Are they using banner ads, text links, or something else?
2. Search for their brand name on Google. This will bring up any paid ads that they're running.
3. Use a tool like SimilarWeb, AdBeat, or Whatrunswhere to see what kinds of display ads your competitor is running.
4. Finally, take a look at their social media profiles. Are they running any paid social media ads?
By understanding where your competitor is advertising, you can get a better idea of what's working for them and where you should be advertising.
Competitor SWOT Analysis
Now that you understand your competitors, it's time to do a SWOT analysis for your competitors. SWOT stands for strengths, weaknesses, opportunities and threats.
Competitor Strengths: What are your competitors doing that is a threat to your business? What do they do better than you or what is their biggest selling point? Defining this will help you understand how to stay ahead of them.
Competitor Weaknesses: What weaknesses do your competitors have that put their business in danger? What are they doing worse than you or not doing well in the marketplace? What major mistakes have they made or are they still making?
Competitor Opportunities: What opportunities do they have to grow their business? This can include developing new products, acquiring a company or partnership, or expanding in other ways.
Competitor Threats: What threats does your competitor face? These can be anything from new companies coming into the market, to supply chain disruptions. These threats will probably be similar to your own when you analyse your own business.
Here's an example SWOT analysis:
1. They have a large social media following.
2. Their content is high-quality and informative.
3. Their ads are well-targeted and effective.
4. They have a strong reputation and good customer reviews.
5. They're visible and easily searchable online.
6. They have a long history in the industry.
1. They're not very active on social media.
2. Their website is outdated and not user-friendly.
3. They don't have a lot of original content.
4. Their customer service is poor.
5. They're not very innovative.
1. They could improve their social media presence.
2. They could create more original content.
3. They could focus on improving their customer service.
4. They could be more innovative in their marketing strategies.
1. Their lack of social media activity could hurt their visibility and reach.
2. Their poor customer service could damage their reputation.
3. Their lack of innovation could make them less competitive in the marketplace.
By doing a SWOT analysis, you can get a better idea of where your competitor stands and what their strengths and weaknesses are. This will help you develop a more effective marketing strategy that takes their weaknesses into account.
Competitor analysis is an important part of any eCommerce business, and understanding your competitors can give you a huge edge in the market. By doing a SWOT analysis for your competitors, you can understand their strengths, weaknesses, opportunities, and threats. This information will help you develop a more effective marketing strategy that takes into account what your competitor does well and where they are weak. Understanding your competitor is the first step to beating them in the marketplace.