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Trying to fit into the market trends in your niche with a new set-up can be frustrating. But competitor analysis helps you expect the market trends and find out what is actually working in your industry Competitive analysis helps you with the planning and execution of the tasks to make sure you always stay ahead of your competitors.
However, keeping a close eye on your competitor is not enough!
Here, we have compiled a definitive guide plus a FREE Competitive Analysis template you can download and start working on for your E-commerce business. (Download Template).
What is Competitive Analysis?
Competitive analysis is a procedure of learning about your market competitors. It can be about a specific area like their website structure and SEO, a service offering or it can be about their overall Marketing Strategies.
Depending on what you are trying to do, The competitive analysis report can be broken down into two parts:
- High-Level Competitive Analysis
- Low-Level Competitive Analysis
Now let’s take a closer look at both.
High-Level Competitive Analysis
In this analysis, your main goal is to take a zoomed out look at what your competitor is doing to differentiate themselves in the market from their competitors within the niche.
While doing a high-level analysis, Here are a few things you should consider looking into to make sure your competitor’s position in the market.
- Who are their customers and their target audience
- What makes them and their product different from the rest
- Their key features and USP (Unique Selling Points)
- Their shipping process
- Their overall investment capital
Low-Level Competitor Analysis
The low-level analysis takes a little deeper look into the scenario. While doing this low-level competitor analysis, you should consider more specific elements of your competitor’s business such as:
- Their Website Features
It may entail having a deep analysis of the website’s structure and how it looks, what kind of images are used or even take a look at if they are using a search feature on their website or not.
- Elements that affect Customer Experience
What are they doing to enhance the customer experience, registration forms, card checkout process, their website usability and responsiveness across devices?
- Social Media Approach
Social media plays an important role in business and doing a social media audit on your competitors can tell you a lot about what they are doing. What channels do they use and how they connect with customers?
- Marketing Strategies
What are their marketing tactics? Are they using content marketing, email marketing or both and how they are implementing these strategies?
Why do Competitive analysis when in an E-commerce business
Whether you’re new in the market or have already established a good hold on your market, this activity still plays an important role for your business. With E-commerce Platforms like Tibolli.Net, it’s easy for anyone to set up an online e-commerce store in minutes which calls for new competition.
This activity makes sure you have all the information about your niche market and take actions so.
Particularly, it can help you with:
- Taking informed marketing decisions
- Identifying the industry and how others see it
- Defining your product prices
- Finding the market gap and ensuring you can do business in that gap
- Finding new ways to interact and engage with your customers
Performing this activity regularly and investing your time in it can really help your business stack up against the competitors and easily find new ways you can market as others have already done the hard work and you just have to find out what they have done.
Definitive Guide on How to Conduct Competitor Analysis
Now that you know what this analysis is all about and how it is going to help you grow your business, it is time to dive in.
Step 1 – Listing down your competitors
You should consider making a diverse list of 7 – 10 businesses that sell the same products or are in the same industry as yours. Remember to have a mixed list of competitors and also consider adding businesses that are new in the market along with experienced ones.
To start making the list, start with writing your targeted keywords or searching your industry on search engines like Google, Amazon, Bing or maybe your local business directories.
It’s better to have a look at the competitive landscape that is not too small or too large. Having 10 or maybe 15 is a good place to start and then pick out the ones you want to analyze.
Step 2 – Making an Editable Spreadsheet
Once you have your list of competing businesses, it is time to put them on to a spreadsheet that can be edited over time as and when you want to add any new businesses in your list.
Now jot down the criteria and points that you want to compare for your analysis.
- Product Price Range
- Website traffic
- Content used
- Indexed pages
- Or other things that you think are worth exploring
Step 3 – Identifying Primary and Secondary Competitors
Now you need to find how these businesses relate to yours and segment them accordingly
Generally, you can segment them in 3 categories
- Primary Competitors
- Secondary Competitors
- Tertiary Competitors
Primary competitors: These are the businesses you are directly competing with. Businesses that sell the same products as yours to the same audience are your direct competitors. In other words, the buyer can compare their product to one of yours.
For example, in the sports industry, Adidas and Nike are directly competing with each other.
Secondary Competitors: These are a little harder to find as you need to take a closer look at the industry. These businesses do not compete directly with each other. They offer the same product as yours but to a different audience. It may be because of a different business model.
For example, in the Automotive industry Rolls Royce and Toyota are secondary competitors. They both manufacture Luxury sedans but they are built for different audiences.
Tertiary Competitors: These businesses don’t sell the exact products as you do but market to the same audience. These competitors offer products or services that can expand your product range or become potential partners. For example, a jewelry shop and a Gemstone vendor can be tertiary competitors.
Step 3 – Start Examining
Now, this may vary depending on what analysis you want to perform. But in general you would want to check the following:
Identify the Competitor’s market positioning
While performing this analysis you should ask a few questions like:
What their customers are buying from them?
What makes their customers buy their best seller products?
What features do they highlight the most in their marketing campaign?
What makes them unique?
This kind of questions will help you identify how your competitors are positioning themselves in the market. This will later help you when you start to work on your market positioning.
To gather Maximum information about their market positioning, be sure to:
- Subscribe to their newsletter to understand their business and how they are communicating with their audience.
- Follow their Blog to decide what kind of topics they are covering to attract customers.
- Following them on all social channels to get a feel on how they speak to their customers about their offers.
- Check out their physical product and see how it compares to yours in real life.
- Consider adding a product to your cart and abandon it to see how they are handling that and note down the language used by them in their follow-ups if any.
Compare the prices
Prices are going to play a huge role in a market with high competition and your pricing strategy defines where you stand in the market.
The best place to start with your pricing strategy is to analyze your competitors and study how they are pricing their products and then you design accordingly
You don’t want to go too high that the customers won’t buy from you or too low as you still want to run a profitable business.
Studying your competitor’s pricing can help you a lot. There might be an opportunity where you can offer a product or service at a much cheaper price than others to fill the market gap.
Take a peek at their reviews to find opportunities
Reviews can tell a lot about your competition.
Take a close look at all the reviews on your competitor’s website, blog, social media posts, and comments.
You will get to know where they lack and you may find a gap which you can fill in with your products or services.
Reviews and comments will also give you an idea about how client-centric your competitor is and decide if this is their strength or weakness you can work on.
Shipping Methods and Prices
Shipping is one of the biggest reasons for cart abandonment in an e-commerce business. You want to check out what shipping options your competitors are offering and how much they are charging for the shipping.
If you find a loophole in their process you must fill that and offer better shipping services at competitive prices to reduce cart abandonment.
Step 4 – Collect Data With tools
The good news is that in today’s online world, there are tools designed specifically to keep an eye on your competitor with much more ease. They make the competitive analysis process a lot faster and easier.
When you grow you may opt for expensive options like Ahrefs, SEMrush or Alexa for detailed analysis.
But for this guide, we will stick to some of the few tools that can give you a good report on where your competition standing.
This tool offers some great insight into your competitor’s website positioning. The free reports offered by this tool are enough to see where your competitors are investing in their marketing efforts and how much they are getting from different channels.
Similarweb can also find more similar businesses that you might want to add in your list to analyze later.
This is a great tool that can fetch out a complete picture of your competitors’ email marketing campaigns. It provides valuable insights on their tag line tactics and mail frequency.
Take a manual look at social media profiles and find the most liked content that your competitors are working on. Just add the competitor’s domain and it will show you the top performing content created by them and how much engagement and shares it got over time. You can then reproduce and improve the content for your audience.
Setting up Google alerts will keep you updated with your competitors’ input against your targeted keywords. You should also set up Google trends for the industry to keep up with the trends and finding opportunities.
Facebook Audience Insights
Access the Facebook Audience insights through your Facebook to know more about the size of your audience on the largest social media network in the world.
These tools will help you understand the competition and find more opportunities in the industry to tap into and grow your business.
Competitive Analysis Template – Download for FREE