Meta-Description: Discover the seven game-changing steps you should take to conduct thorough competitor analysis in 2021.
“What enables the wise commander to strike and conquer, and
achieve things beyond the reach of ordinary men, is foreknowledge.”
- Sun Tzu
Think of a product that’s not already being sold by someone else.
Now, answer this:
“How many of these unique products did cross your mind?”
My guess – not many.
These days, almost any product or service you can think of; it’s already being sold by someone else.
It doesn’t matter if you sell consumer goods or smartphone cases or just about anything; you’ll always have competition.
And that’s both a good and a bad thing.
What’s bad about it?
The reason why we claim competition to be a bad thing is that you’ll have to share your customers with your competitors. You’ll have to ensure that your business model isn’t an exact replica of theirs. And most importantly, you will have to spend hours thinking about your unique approach to stand multiple steps ahead of your competitors. Otherwise, you may end up losing your customers to them. And that’s a loss you shouldn’t afford.
On the other hand, the reason why we think competition is the good thing is that it helps gain deeper insights into your market. Before you even kickstart your operations, you can familiarize yourself with the consumer demand and potential for growth. Moreover, you can learn more about the marketing tactics and strategies that work and the ones that don’t.
But the “good” part isn’t applicable for businesses that don’t conduct thorough competitor analysis.
The global E-Commerce retail sales reached $4.28 trillion in 2020. That’s a massive 27.6% rise when compared with 2019. At the same time, worldwide retail sales declined by 3%.
The Covid-19 pandemic fueled this game-changing shift to online shopping. But despite things now getting back to normal, online retail sales in 2021 haven’t witnessed a decline.
In short, the E-Commerce industry is simply unstoppable. And soon, we’ll witness a boom.
But, at the same time, we’ll see more and more E-Commerce players making their way to the market. This will, in turn, lead to fierce competition. And if you want to gain deeper insights into your market, consumer demand, marketing tactics, and other elements, you can’t afford to avoid competitor analysis.
This should be done way early – preferably during the research phase. But don’t worry if you have already launched your E-Commerce store. You can always carry out competitor analysis and revamp your marketing and branding strategy accordingly.
In this blog post, we’ve listed seven steps you should follow to know the ins and outs of your competitors’ business and marketing model.
Let’s dive straight into it.
7 Steps You Should Follow to Conduct
Thorough Competitor Analysis in 2021
We’ve summarized the seven steps and prepared this list for better navigation:
- Identify Your Competitors – Find Out Who Your Competitors Really Are
- Create a Criteria for Comparison
- Perform a Competitor SWOT Analysis
- Review their Websites, Customer Feedback & Customer Experiences
- Review Their Marketing Strategy & Tactics
- Dive Deep into Their Tech Stack
- Learn What Makes You Different from Them & Identify Any Areas for Improvement
Identify Your Competitors – Find Out
Who Your Competitors Really Are
We want you to conquer the market. In fact, we want you to become the most dominant force in your industry.
But, if you want to establish your dominance, you need to identify the market your online store belongs to. After all, you can’t own a female beauty products store and target men. That’d be a dumb move.
If you don’t know which market you belong to, you’ll never be able to identify your competitors.
So, the first step is identifying the market your business belongs to. For example, if you sell sports shoes, then your business belongs to the “Sports Footwear” market. A mistake would be to attract the people who hate wearing sports shoes.
Once you have discovered your market, the next step is to identify your competitors. So, if you own a sports footwear online store, your competitors are brands that sell premium-quality sports shoes and have a huge market. But, on the other hand, the footwear brands that don’t sell sports footwear at all – these are the ones you should avoid.
So, our advice would be to focus on direct competition.
And to identify direct competition, you can:
- Hop onto search engines and look for brands appearing for similar product queries as yours.
- Look for research papers or websites like Statista to get your hands on your market value.
- Gain more insights into their B2C E-Commerce business model.
- Hop onto social media platforms and look at which brands your target market is purchasing from.
You can also review the business models of indirect competitors. These are the ones that don’t exactly sell the same products you do but satisfy the same customer demand.
But majorly, your focus should be on direct competitors.
Create a Criteria for Comparison
Now, once you have identified your competitors – shortlist at least ten of them. And these are the ones you need to dive deep into. We’ll not only look at their business models, but we’ll also look at their marketing strategy, brand awareness, engagement, and more.
So, before you begin conducting competitor analysis, you need to create criteria for comparison.
You can’t randomly hop onto your marketing tools, add in your competitors’ URL, and process all that information.
It’s advisable to take one step at a time.
Competitive analysis isn’t just about reviewing your competitors’ organic website traffic, backlinks, keywords they are targeting, domain authority.
Instead, it’s equally important to focus on the products they are selling, demand, supply, target market, their engagement rate, marketing strategies, and so much more.
Moreover, you should review their branding, shipping, sales, and pricing strategies to gain deeper insights into their business models.
If you dive straight into it, you’ll see yourself surrounded by too much clutter. And that will just be too hard to process.
So, for every competitor’s business and marketing model you analyze, you need to take one step at a time. Prepare a high-level plan.
Try covering the following areas:
- E-Commerce Website
- Brand Positioning
- Sales Strategy
- Customer Experience
- Marketing Strategy
- Pricing Strategy
- Shipping Strategy
- Content Strategy
- Offers/Discount Strategy
Try covering as many of them as possible. And if there are a few that we haven’t mentioned here, feel free to share your suggestions with us, and we’ll update the article accordingly.
Perform a Competitor SWOT Analysis
Once you have identified down your competitors and prepared criteria for comparison, the next step is to perform a thorough competitor SWOT analysis based on the criteria you prepared.
Here, you’ll be reviewing each of your competitor’s Strengths, Weaknesses, Opportunities & Threats.
Сonduct a Competitor SWOT analysis for each of these areas. And while doing so, try to answer the following questions:
- In which of these areas does your brand hold the upper hand?
- In which of these areas does your competitor hold the upper hand?
- Which of your processes need improvement?
- What helps you stand out in each of these areas?
- What’s your competitor’s weakest area?
- In what ways can your competitors substitute you?
- Which areas do they excel at? And which ones they don’t?
- How can you hold an upper hand across these areas?
- Which lost market opportunities has your competitor failed to identify?
You need to consider your competitors’ strengths and measure them against your weaknesses. Parallelly, you should review their weaknesses and understand how your strengths can help you excel across different areas.
Understand how you can capitalize on them and prepare a game plan accordingly.
Review Their Websites, Customer Feedback &
8 in 10 consumers have reported that they are ready to spend more for a better customer experience.
Offering a poor customer experience is the worst thing you can do to your online store.
The E-Commerce Lord Jeff Bezos once said: “If you make customers unhappy in the physical world, they may tell six of their friends about it. But, if you disappoint them in the online world, they may each tell 6,000.”
59% of US consumers abandon a brand after numerous bad experiences. But, about 17% of your consumers can’t even tolerate a single bad strike.
And if your competitors have outstanding sales and a good retention rate, then they are probably delivering a worthwhile customer experience.
But what exactly are they doing right?
That’s what we need to figure out.
So, now we’ll hop onto their websites and assess their UX & CX using Erin Sander’s five-step user research framework. Disclosure: Since we’ve tweaked this framework a bit, we like to call as our competitor analysis framework:
- Set Clear Objectives: First, you need to understand what you really want to get out of this. What knowledge do you want to gather? Some basic elements that you should focus on are their website navigation, checkout experience, website speed, and more.
- Prepare Research Hypotheses: Remember Step III, where we conducted Competitor SWOT analysis? Now, we’ll use the information we gathered there and apply it here. We’ll measure how your competitors are using their strengths to deliver a great experience to their customers.
- Choose the Research Methodology: This step depends on the resources you have in your possession. Here, you can supposedly use quantitative and qualitative methods to evaluate their CX & UX.
- Quantitative Methods: These methods involve performance metrics, testing data, surveys, customer data, and more.
- Qualitative Methods: These methods include group interviews, customer reviews, feedback from your near and dear ones, and more.
- Carry Out Your Evaluation: Now, try to get your hands on as much data as you possibly can.
- Evaluate this Data: Now, you have all the data in your hand to gain insights into your customer experience. Review this data to understand what different competitors are doing right in terms of CX & UX. There are some areas where some of your competitors may be lacking. Try to capitalize on those areas.
Carrying out competitor website analysis will allow you to take the first step towards building a simple, sleek, and elegant website for your online store.
Review Their Marketing Strategy & Tactics
If you thoroughly followed each of the steps we’ve listed above, you are already done with 50% of your competitive analysis.
Up until now, we focused on market research and your competitors’ business models. In addition to this, we reviewed their UX & CX.
Now, we’ll be reviewing the marketing tactics and strategies they implement to attract their customers, convert them into leads and turn them into paying customers.
As easy as marketing sounds, it isn’t.
There’re numerous areas involved you need to focus on like:
- Email Marketing
- Lead Generation
- Growth Marketing
- And many more!
The realm of marketing is way bigger than one can think. So, for every competitor in your list, discover the marketing tactics and strategies they applied in the past and the ones they are applying now.
Competitor analysis tools like SEMRush, Ahrefs, Ubersuggest can help you gain more insights into their marketing campaigns. Use these tools to pinpoint the source they are attracting their traffic from.
Are they attracting their prospects via search engines? Or is it the magic of their paid ad campaigns? Maybe, social media or email marketing? Some of the best competitor analysis tools include:
- Quick Search
These tools above will provide you with a world full of information – all the data you’ll ever need to familiarize yourself with the tactics that work and the ones that don’t.
Dive Deep into Their Tech Stack
We don’t live in a plain and simple creative marketing world anymore. These days, the marketing industry is flooded with both creative and tech experts.
You may be using the wrong marketing tools. At the same time, some tools may be limiting you from achieving your goals.
But, if you want to deliver a great customer experience, you need to have a loaded tech stack capable of driving massive traffic and converting a maximum number of your prospects into paying customers.
And we aren’t just talking about SEO tools here.
Your marketing tech stack will comprise way more tools, and you need to make sure that every single one of them is a perfect fit for your organization.
So, the next step we will take is to understand more about the marketing tools your competitors are relying on. While doing this, don’t forget to pay attention to:
- Which automation tools do they possess?
- Are they using any of those innovative technologies like AR, AI, chatbots, VR for delivering a magnificent customer experience?
- Which software are helping them offer an outstanding shopping experience?
- Which Customer Data Platform do they use?
- Which Customer Relationship Management Software do they use?
- How do they interact and connect with their prospects and customers?
- Which tools do they rely on the most?
Apart from their marketing tech stack, try getting your hands on more information like:
- What kind of E-Commerce Solutions do they use?
- Which supporting systems do they use?
- Do they use any custom integrations?
Learn What Makes You Different from Them
& Identify Any Areas for Improvement
What’d you say if someone asks you, “What’s Your Unique Selling Proposition?”
You can’t afford not to have an answer to this question.
There’re literally hundreds of your competitors out there trying to gain that #1 position that you’ve been desiring. They’re already trying to steal your customers.
And trust me, they won’t hesitate.
If you don’t have a unique selling proposition, you’ll always be vulnerable. You will face a hard time building a loyal customer base.
But, and that’s a big but – if you do position yourself as unique, your customers will acknowledge it and would even love reaching out to you.
For example, if you offer 12-hours delivery, you can list this out as a factor that makes you unique. But sooner or later, one of your competitors may start offering 12-hours delivery as well.
Evaluate your competitors’ business model and marketing strategy and compare it with yours. And try to think of a unique selling proposition that’ll help you gain an edge.
Parallelly, identify the areas you need to work on. Just like you performed a competitor SWOT analysis, do the same for your brand.
Acknowledge your weaknesses and threats. And based on that, identify the areas you need to capitalize on.
Conduct Thorough Competitor Analysis Today!
Despite the ever-increasing competition, you can skyrocket your E-Commerce sales. But that won’t happen overnight. And it surely won’t be possible if you don’t use the data you gathered from competitor analysis to improve your business model and fuel your marketing campaign.
Think of your online store as a machine. Just like a machine has different parts working together, different parts like marketing, branding, sales, competitor analysis must work together to help you achieve your goals.
And that’s the secret to success.
So, what are you waiting for?
Conduct competitor analysis today.