It’s common for early-stage ecommerce businesses to conduct thorough surveys of the competitive landscape prior to launch. It’s harder, however, for established ecommerce businesses to find the time to periodically refresh their understanding of the competition. Yet it’s no less important—the ecommerce world moves quickly, and profiling your rivals to learn more about their current operations and marketing strategies is a great way to stay ahead of the curve.
Whether it’s your initial competitor analysis or an update on the current marketplace, the ecommerce competitor analysis is an important way to:
- Build an idea of where your business stands in the marketplace
- Better understand the past, present, and future strategies of your competitors
- Identify opportunities and weaknesses in your competition
- Provide firm grounding in your own strategy
- Help determine who to directly compete with and introduce you to emergent competition
- Show potential funding sources how you're differentiated from your competition
While a competitive analysis can be thorough and time-consuming, it doesn’t need to be. The mere act of looking at your competition can provide the jump-start you and your team need to get your ideas flowing and differentiate your business. Here are a few strategies to remember as you conduct your next ecommerce competitor analysis.
1. Determine who your primary competitors are.
Competitor identification is the first step in your analysis, so ample time should be spent here. Try to find your closest competition in every sense: business size, product differentiators, audience, and online presence. Questions you can ask include:
- Who am I most often compared with?
- Who do my customers reference in conversations?
- Who is meeting a similar market need, solving a similar challenge, or addressing a similar pain point?
- Who appears in similar search results?
2. Study the business basics of your narrowed list.
Once you’ve narrowed your list down to a few top competitors (we recommend three, but your number may vary), study each competitor at a high level. Ask questions like:
- What line of products do they offer?
- What is their price point?
- What are their differentiators?
- Who is their audience, and what brand voice are they using to reach this audience?
- How strong is their web design and branding?
- What messages are they repeating throughout their site?
3. Learn more about the competition’s SEO strategy.
Use a tool like Spyfu to take a deeper dive into your competition’s SEO strategy. Competitor SEO research will help you answer questions like:
- What keywords are they ranking for?
- Where does your site appear relative to your competition?
- Approximately how many organic visitors do they get?
- What is their top-performing content?
- How many other websites are linking to them? What is their most popular linked content?
- Are they running paid search campaigns?
4. Identify competitor strengths and weaknesses.
For each competitor, list five strengths and five weaknesses. These can be specific items like “Competitor doesn’t have a robust social media presence,” or you can simply list five things you like and dislike about each competitor. After all, the consumer’s experience is subjective; so is yours. Ask questions like:
- What is the strongest part of the competitor’s online store?
- What is the weakest part of their online store?
- What is the strongest part of their digital presence, in general?
- What is the weakest?
- As a consumer, what do I appreciate about the experience the competitor provides? What do I wish were different?
- What can I do to leverage these strengths and weaknesses?
5. Consider how your competition will respond to your actions.
The information you’ve gleaned so far will help you develop a list of strategies you can use moving forward that set you apart from the competition. Before you dive directly into strategizing, though, you have one last step: how will your competition respond to your actions, if they respond at all? Consider questions like:
- What will happen if I make a pricing change?
- How will the competitor react if I run a major promotion?
- How will their strategy change if I make a bid for the same PPC or SEO keywords?
- How and where will they step up their game?
Armed with this information, you’ll be able to understand where your business stands relative to the competition and create a living library of what your customers experience when they visit other sites. This is exactly what will help you take your business to the next level and stand above the rest.