The online shopping world is quite vast. And, if you have a product idea, chances are it already exists now or did in the past. So, if you want to grow organically, then the only way is to focus on your present or past rival's weakness and strength. This is referred to as competitor analysis. By analyzing their strategy, you can grow your brand and stand out among your competitors.
Why is Competitive Research Important?
Your competitor provides you a wealth of information. We do not know or can't possibly know everything. Every individual has their own way of doing business. That’s a good thing and always differentiates you from the rest. But there is always scope for improvement, and the competition helps you learn.
By performing a competitor analysis, you can learn from their strengths & follow the industry trends, be aware of the challenges, get an understanding of the customer's preferences, and project the strength of your product.
What Questions Make For Comprehensive Competitive Research
The whole subject is quite broad, and it will be super helpful to break down what you are interested to learn. Here are some examples:
- Who are your main competitors and what's their impact on the market? List at least 5 to 10 businesses whom you think are your competitors.
- What is their product range and how does it differ from yours?
- What value add do they provide which you don't?
- Their price points.
- Their target customers.
- Their market and advertising budget and strategies.
- Their shipping partners and strategies.
- Whether they have acquired any funding from venture capitalists.
How To Do Competitor Analysis - In Detail
Divide Indirect and Direct Competitor
Use you can do a basic Google search and go through Amazon to find out similar products and business models. Divide them into categories like a direct competitor, who sells the same product and indirect competitor, who although doesn't sell the same product, solves the same issue. Once you determine this, open a spreadsheet and include their details such as brand website, style, social media pages, vision/mission, strength, and weakness. Apart from this, you can also include market leaders like Target.
Experience The Product Selection and Buying Firsthand
Spend some time going through their website and check their design, loading speed, and overall look and feel. Next, get into the nitty-gritty such as how are the products looking, how are their descriptions, what call-to-action words do they use, do they email ids, and live chat support. If your budget allows, you can also place your order and see how they handle the shipping.
Their Marketing Strategies
Marketing has multiple dimensions. There are multiple ways to market products. You can look at how they position their products and earn their customer loyalty. You can also check for their blogs, podcasts, webinars, newsletters, press releases, featured articles, case studies, and FAQ sections. If you want to further drill down the details, you can look at the content type they are promoting – whether it is mostly visual (infographics), which topics they usually cover, and their social media campaigns. You can also observe their engagement they are generating with every content piece they publish and the accuracy of the same. You can even subscribe to their newsletters.
Pricing Strategy
This is one of the most important things you can consider while doing a competitor analysis. After all, 60% of people buy things based on how it is priced. So, you can analyze their pricing and come with what would be their profit margin. Also, this gives you a base pricing idea. If you want to sell your products for a higher price, you need to validate why you have marked it up. If it is below the average, you still must do so without compromising your profits and margin. The cost must also include marketing spends.
Look Into Their SEO
Your online store might be all sorts of perfect, but it still must come up in the higher rankings for better discoverability. And only SEO strategy can help you with this. There are many sites such as SEM Rush or Ahrefs where you can see what keywords they are targeting. Then, you can analyze the keyword density, meta information, internal linking, uniqueness of content, and backlinks. If you find something useful, you can use the mirroring technique. This technique is nothing but copying the backlink of your competitor sites to yours. But you have to execute them carefully and must take only from the good websites.
All in all, the competitor analysis comes handy in creating SWOT - Strength, Weakness, Opportunities, and Threat. This gives a roadmap for the success of your business.
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