All ecommerce companies have competitors. If you aren’t aware of the ins and outs of your competition landscape, you could be losing the opportunity to outdo your direct and indirect competitors by coming up with the strategy they haven’t taken advantage of yet. But how can you do that? By conducting a business competitor analysis.
Competitive landscape analysis is an integral part of your ecommerce business plan, that helps you predict changes in the market, recognize new trends, and be at the forefront of what’s working within your niche market.
If you don’t know where to start, you’ve come to the right place. In this blog post, we cover what competitive analysis is, how to write a competitive analysis matrix, and provide a free competitive analysis example template to do it quickly. Let’s dive in.
A competitive analysis is a process of gathering and analyzing information to define major competitors on the market and research their company, products, price offers, market positioning, strengths, and weaknesses. Collecting and evaluating the information on competitors is essential for successful business strategies that enhance decision-making.
To make your analysis effective, it’s essential to:
Executed properly, a competitive matrix will provide a great variety of quantitative and qualitative data. Researching your major competitors helps you discover:
Follow the steps outlined here to keep your research organized properly.
Start by creating a list of at least 3-5 of your major competitors. How to find competitors of a company? There is a wide range of ways to define key players in your niche, but Google and Amazon are the places, where you should start your research.
First of all, choose the keywords that characterize your ecommerce company the best. Then, search this keyword on Google and write down all ecommerce companies that rank on the first 2-3 pages.
When searching for your competitors, make sure that you’re using the right location. To enhance your search and be sure that you are not missing out on any competitors, use tools as SEMrush and AnswerThePublic to find out as many relevant keywords as possible.
Look for the competitors that:
For instance, if you’re planning to sell handmade soap online, large grocery shops generally aren’t your direct competitors, even if they sell handmade soap in place. Search for small to medium level producers of handmade soap and similar products for personal care.
Other tools you can use to find information about the competitive landscape are Alexa, Linkedin, and Keyword Spy. As you identify your key competitors, it’s better to categorize them into different groups, from primary competitors to those you still should be aware of like secondary and tertiary competitors. Here is how to classify merchants in your market:
When documenting your competitors include basic information such as the name of the company, location, product offering, and category of the competition.
The next step is to assess your competitors’ product line. Whether it’s a fashion store or food delivery website, every ecommerce company has a product or service to offer.
The product feature comparison is one of the most essential aspects of the competitive analysis that enables you to figure out what sets your business apart. Along with particular product features, here are some other characteristics that you should add:
We also recommend to answer some questions regarding to products our main competitors are offering:
Competitor’s market positioning is a vital part without which you won’t get a full picture of your competitive landscape. Market share represents the portion of an industry controlled by a particular company over a certain period of time.
Competitive positioning matrix helps your online business to explore the potential to expand and spot trends in the ecommerce industry. The research can help you come with the customer personas that will determine your marketing strategies along the way, and enable you to be ready for any changes that might happen to the marketplace.
We recommend you to conduct primary market research that includes customer interviews, online polls, and in-person target groups. You could also check company records, research the present economic situation, and analyze relevant technological advancements.
To collect as much data as possible you can sign up for your competitor’s newsletter, check frequently their blog to see what content they are covering, follow them on social media (Facebook, Instagram) to analyze how they communicate their brand to customers. By figuring out your competitor’s market positioning, you’ll get a clear picture of your own market’s needs and expectations.
The next step of our analysis is to perform a competitive analysis in marketing. Marketing is one of the parts where you’ll be face-to-face in competition. For this reason, to have an understanding not just of your own marketing tactic, but your key competitors as well. Review the following:
Identify the social media channels where your competitors have a presence, the number of their followers on each channel, and the frequency of post publications. Check the engagement (comments, likes, and shares) of their followers to get a hint on their performance.
Visit each competitor’s website as a regular customer. The aim of website competitor analysis is to analyze user experience. Research the homepage, category page, navigation, search options, template, graphic design, and load time. Visit the online store on both desktop and mobile.
When people are planning to buy a product on the Internet, they are likely to first look for it on the first three Google pages. Your ecommerce website has to rank high on Google to maximize your traffic potential. To analyze your competitors with regard to SEO, you should determine potential keywords. Use SemRush, Moz, or Similarweb tools to perform a complete SEO analysis on keywords.
A competitor’s blog is a part of competitor analysis in digital marketing you should also pay attention to. Content marketing is a key element of any SEO strategy. Check the frequency of new publications and if there are comments or shares on social media.
Focusing on organic search is vital, but understanding the paid advertising strategy of your competition is also worth doing. You can easily analyze your competitor’s strategy on Google by just typing the relevant keywords that you want to get a high position for and check what ads show up on the first pages. In terms of banner ads, you can use an ad strategy tool such as Adbeat. Just write the domain of your competitor and you’ll get all their ads on Google.
Don’t forget to analyze current sales, discounts, and third-party events aimed to gain new customers
The last step is to perform a SWOT (strengths, weaknesses, opportunities, and threats) analysis to evaluate your competitive position. What are their customers like the most and what are they complaining about?
First of all, name their strengths and think about how well you can adjust to compete with their strong sides. Then, name their weaknesses and check if their weaknesses provide an opportunity for you. By doing a SWOT analysis, you can start to uncover strong and weak points within your own brand.
Visit your key competitors’ Facebook and Instagram comments and check out reviews on their online store If there is a possibility to talk to your competitors’ customers face-to-face, do it. You can use all of this information in your favor and see a business’ advantages and disadvantages based on what their customers see.
The main objective for your ecommerce business should keep one step ahead. With all the provided information, you can come up with a competitive strategy that can help to beat out the competition and establish yourself in your target market.
By conducting a competitive analysis, you will be able to dominate the market and spot new opportunities to make your business stand out. With the above competitor analysis template as an entry point, along with the tools we have covered, you will have a better understanding of how to approach the competitive analysis.