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Top Tools and Techniques for Effective Ecommerce Competitive Analysis
With so many businesses vying for the attention of online consumers, it’s challenging to stand out from the crowd. One of the most effective strategies is conducting a thorough eCommerce competitive analysis. By scrutinizing your competitors’ strengths and weaknesses, you can identify areas where your business can improve and gain an edge.
In this 7-minute read, we’ll delve into the top tools and techniques for conducting an effective eCommerce competitive analysis with the insights you need to be a winner.
Competitive analysis in eCommerce is researching and analyzing competitors’ strategies, strengths, and weaknesses to gain insights into how they succeed in the market.
eCommerce competitor analysis will provide an understanding of competitors’ products and services, pricing strategies, marketing tactics, and customer experience ecosystem.
With all this information, you will plan better strategies based on opportunities and potential threats and make more informed decisions.
How To Conduct An Ecommerce Competitive Analysis – Step-By-Step Guide
Here’s a list of the steps involved in conducting a competitive analysis for an ecommerce business:
- Identify your main competitors
- Research their products and services
- Evaluate customer experience your rivals provide
- Assess their marketing tactics
- Check which customer services they outsource
- Analyze automation tools they utilize
- Conduct a competitive analysis using one of the available methods
To gather data, use internet, social media and online surveys.
1. Best Practices For Identifying And Analyzing Your Competitors
First, let’s define who the ‘main’ competitors are. You should only look for niche leaders if you are among them. You can add one or two to your list, but only as a benchmark.
For a proper eCommerce competitive analysis, you should be realistic and list 5-10 eCommerce businesses similar to yours. How can you identify the main rivals?
You can identify your main competitors in two ways:
- Paid options
If you decide to research yourself, you’ll invest only time. Here are some ideas on how to do it.
- Use your browser in incognito mode and type in several products you sell.
o Skip ads, and write down all eCommerce websites on the first page.
o Open each link in a new tab.
o Proceed to the second and third SERP* pages until you reach your website.
o If you are not among the listed websites on the first three SERP pages, change the keywords. Add a location or some other attribute you consider significant.
o Continue the process until you list 5-10 rivals that appear in the SERP before your website.
- Check social media
- Use Google Business Profile
- Check business listing websites (Yelp, YellowPages, NextDoor, etc.)
*SERP stands for Search Engine Result Page – a list of all links you get whenever you type a keyword into your browser.
Paid Options To Generate A List Of Competitors
If you are looking to pay for professional research on your main competitors, several options are available. Here are a few:
- Market research firms specialized in competitive analysis. They’ll provide detailed reports on your competitors’ products, pricing, marketing tactics, customer experience, and more.
- Business intelligence agencies gather data from multiple sources to help businesses analyze their competition. For you, they’ll gather real-time data and insights on your competitors’ digital footprint, social media activity, and online presence.
- Freelance researchers provide customized reports tailored to your specific business needs.
- Consulting companies offer competitive analysis services as part of their packages. They will conduct an eCommerce competitors analysis and provide expert advice for developing your strategy to outrank them.
2. How to Conduct eCommerce Product Analysis Like a Pro
Here are some specific steps you should take to research and analyze your opponents’ products effectively:
- Take note of the range of products offered: Look at the different categories and subcategories. Add the number of products offered in each category. If you notice any gaps or areas of opportunity, write them immediately.
- Analyze product descriptions: Read the product descriptions carefully to understand each product’s features, benefits, and unique selling points.
- Check product pricing: Identify if any products are priced higher or lower than yours. This will give you an idea of how to price your products competitively.
- Analyze product images and videos: Assess the quality, number, and special effects. Write down any unique selling points you don’t utilize.
- Identify trends: Analyze the products offered, product descriptions, and pricing strategies of your competitors’ products to identify any emerging trends in the market. This will help you stay ahead of your competitors.
- Check product titles, short and detailed descriptions, internal and external links, URLs, and (most importantly) meta descriptions. Make a list of keywords they target.
3. How to Analyze Your eCommerce Competitors’ Customer Experience
If you want to evaluate the customer experience your eCommerce competitors provide, there are several key areas to focus on.
- First, look at their website’s user interface and overall design. Is it easy to navigate, visually appealing, and does it offer a seamless shopping experience? Consider factors such as site speed and mobile responsiveness, as these can significantly impact eCommerce user satisfaction and experience.
- Next, examine the checkout process. Is it simple and streamlined, or are there multiple steps that could cause frustration for potential customers? Look for any roadblocks that could prevent a customer from completing their purchase.
- Evaluate your competitors’ customer experience ecosystem. That will show you where you are and if there are areas for the improvement.
- Check what types of omnichannel marketing strategies your competitors apply. Your customers should have an excellent experience with your eCommerce business across all touchpoints.
- You should also analyze competitors’ customer service offerings. Do they offer multiple channels for support, such as email, phone, and chat? How quickly do they respond to inquiries, and are their responses helpful and professional?
- Consider their return policies and overall customer satisfaction rates. Are they transparent about their policies, and do they offer hassle-free returns? What are other customers saying about their experience with the company?
- Finally, check reviews, as they are the most significant factor to consider when evaluating the customer experience provided by your eCommerce competitors.
- Look at the reviews on their website, social media, and third-party review platforms.
- Investigate both positive and negative reviews. Positive reviews will tell what your competitors are doing well and where they excel. Negative reviews will show you what are pain points giving you a clear direction for improvements.
- Whenever you face a buyer’s dissatisfaction, be thankful. After you successfully handle the customer’s complaint, spend as much time as needed to analyze the cause and define the general strategy to avoid similar situations.
- Keep in mind that not all reviews may be legitimate, so it’s important to take a critical approach to your analysis. Look for patterns and trends in the reviews, and consider the overall sentiment.
- Consider conducting customer surveys to gather feedback on your competitors’ customer experience.
4. How to Assess Your Opponents’ Marketing Methods to Stay Ahead of the Game
There are several general areas you should investigate when assessing your competitors’ marketing strategies:
- Competitors branding and messaging is the first survey to conduct. Look at their website, social media profiles, and other marketing materials to sense their brand identity and messaging. Notice the target audience, tone of voice, and key messaging points. If you want to learn how exactly to do it successfully, check our eCommerce Survey Guide.
- Analyze their advertising efforts. Look at where and how they’re running ads, what keywords they’re targeting, and what ad creatives they use. This can give you insight into their overall advertising strategy and help you identify potential gaps or areas for improvement in your approach.
- Another important factor to consider is competitors’ content marketing efforts. Evaluate their blog posts, social media content, and other types of content to see what topics they’re covering, how they’re positioning themselves, and what types of customer reactions they’re trying to generate.
- Check which competitors have a cross-sell and up-sell processes integrated into the customer experience journey.
- Notice if any of your competitors utilize delivery tracking apps, automated up-sell emails, data-rich reports (such as TrackMage provides).
- Check how your competitors manage outbound logistics. Their fulfillment process, shipment options, and delivery times might indicate your strength or weakness.
Some information is easy to find on the internet, but for others you have to be creative. Ask your friends and employees to go through the entire purchasing process and list all flaws and advantages. It will cost you, but when you investigate your rivals, it will be a more than lucrative investment.
Ecommerce Competitive Analysis Methods
There are several eCommerce competitive analysis methods you can easily use. Here are some that do not require mathematical or statistical knowledge.
- Competitor SWOT analysis
- eCommerce funnel analysis
- Regression analysis in eCommerce
Competitor SWOT analysis
SWOT analysis is a strategic planning tool used to identify the strengths, weaknesses, opportunities, and threats of a business, competitors, or project. The goal of a SWOT analysis is to identify and analyze internal and external factors that can affect your business.
Here is how a SWOT analysis is typically conducted:
- Choose whether you’ll compare all competitors from the list in one SWOT diagram or you’ll make as many diagrams as there are competitors.
- Identify strengths: List down all your strengths. Be objective – do not list wishes, but real advantages your eCommerce store and website have over the competition. Answer these questions: where are you better? Why should people buy your products?
- Identify weaknesses: List down your weaknesses. These can include poor cash flow management, outdated website design, poor marketing strategies, or a lack of selling techniques. Be as severe as possible, do not pamper yourself.
- Identify opportunities: List down potential opportunities. Consider emerging eCommerce market trends and statistics, new customer segments, technological advancements, substitute products, cost reduction, changes in packaging, general economic and political situation, etc. Focus on areas that offer the potential for expansion and develop effective growth strategy.
- Identify threats: List all the threats you can think of, like increased competition, regulation changes, or economic downturns. Focus on areas that pose a risk to your business and require mitigation strategies.
- Analyze the results: Analyze the SWOT analysis results and identify areas that require immediate attention. Prioritize the issues, and focus on developing strategies that utilize strengths, address weaknesses, take advantage of opportunities, and mitigate potential threats.
- Develop strategies: Develop strategies based on the SWOT analysis to maximize strengths, minimize weaknesses, capitalize on opportunities, and mitigate threats.
Ecommerce Funnel Analysis
A funnel in eCommerce refers to the different stages a customer goes through before purchasing. Funnel analysis depicts the customer journey, from the initial visit to the final purchase. eCommerce funnels are usually broken down into several stages.
The stages of an eCommerce funnel can vary depending on the business but typically include:
- Awareness: This is the first stage of the funnel, where customers become aware of a brand or product.
- Interest: In this stage, potential customers express interest in a product or service and explore the internet, visiting websites (here is where your SEO ranking matters the most).
- Consideration: In this stage, customers actively consider the product. They compare your offerings with your competitors’, read reviews, or conduct further research.
- Intent: At this stage, customers have decided to purchase the product or service and are ready to proceed with the transaction.
- Purchase: These final stages involve evaluating products or services, checking out, and making the final purchase.
- Post-purchase: Often an overlooked phase and a lost opportunity if not utilized. Notice how many competitors have a post-purchase strategy. Do you have it?
Now that you have a better understanding, how can you utilize eCommerce funnels and conduct competitive analysis?
You’ll have to spy on your competitors, explore social media, and review platforms (Google Business Profile, Yelp, etc.). Yes, this will take time and money but you’ll gather invaluable insights and ideas for the improvement.
Regression Analysis In Ecommerce
Regression analysis is a statistical method used to establish a relationship between two or more variables. It is easily applicable in various fields, including finance, sales, marketing, economics, and scientific research, to determine how one or more variables affect another.
The goal is to determine if there is a relationship between the output (Y) and one or more inputs (Xs). If there are more inputs (factors), we want to establish if some are more significant.
In simple terms, regression analysis uses historical data to identify patterns and predict future outcomes.
The relationship between the variables is expressed as a regression equation. The equation estimates the value of the dependent variable (output) based on the value(s) of the independent variable(s).
There are two types of regression analysis:
- Simple linear regression -one independent variable (one cause)
- Multiple regression – multiple independent variables (multiple possible causes)
eCommerce Regression Analysis Example
You can apply simple linear regression analysis to determine how the age (or gender, location, etc.) of your website visitors affects cart abandonment or any other outcome (leaving a review, purchasing, repeat purchases, etc.).
The independent variable X would be the visitors’ age (gender, location, etc.), and the dependent variable Y would be the cart abandonment percentage.
You can extract data from Google Analytics to create a regression analysis equation. Based on the results, it will be easy to see improvement possibilities and to create your growth strategy.
eCommerce Competitive Analysis Template
An eCommerce competitive analysis template provides a framework for evaluating the strengths and weaknesses of your competitors across various aspects of their business.
We’ve created a competitive analysis template to help you quickly and efficiently go through the process, without missing important factors.
Why use the template? Here are a few reasons:
- Structure: A template provides a structured framework for analysis, making it easier to organize your research and identify focus areas.
- Time-saving: With a template, you don’t have to start from scratch each time you conduct an analysis. Instead, you can modify the existing template to suit your needs, saving significant time and effort.
- Objectivity: A template helps you stay objective by providing a comprehensive list of factors to evaluate. This ensures that you don’t miss any critical information.
- Consistency: Using a template ensures consistency in your analysis across different competitors, making it easier to compare and contrast data and identify patterns.
- Efficiency: By providing a structure and focus, a template allows you to conduct your analysis more efficiently, ensuring you cover all the necessary areas without wasting time on irrelevant information.
Short Conclusion About eCommerce Competitors Analysis
Competition in the eCommerce world is severe and stronger each day. If you want to stay ahead of your competitors, you must know what they do. Use competitive analysis to understand where you are and how you can improve.
Well-structured eCommerce competitive analysis covers 3-5 competitors. The steps you should follow are:
- Identify main competitors
- Gather all relevant data- products, marketing, customer experience
- Put all your data into the template
- Use competitive analysis tools (SWOT, regression, funnels)
- Conclude and make a list of improvements
- Prioritize improvements and develop a realistic growth strategy for your business.
Investing time and money into eCommerce competitive analysis is your smartest move. Without it, your eCommerce store will stay behind the competition, lose sales, and ultimately join the 80%-club of closed businesses (eCommerce statistical data).