The ecommerce industry is getting more and more competitive. The pandemic gave some businesses the final push they needed to start selling their products online, and showed others the importance of strengthening their online presence.
Understanding who your competitors are, how they’re positioning themselves, and which business strategy they’re employing is crucial for claiming and maintaining your own spot in the market.
But how do you go about that?
By running an ecommerce competitor analysis.
What is an ecommerce competitor analysis?
When doing an ecommerce competitor analysis, you identify your competitors, how they operate, and what their brand positioning looks like within the market. That includes determining:
- Which marketing strategies they use
- Which products they’re selling
- What they’re charging for those products
- Where they are selling their products
- What their market share looks like
- What their unique selling propositions are
- How many employees they have
and more.
Next, you use that information to determine how your ecommerce business compares to your competitors,’ and develop the right strategies to gain a competitive advantage.
Why you should do an ecommerce competitor analysis
Generally speaking, the goal of doing a competitor analysis for ecommerce is threefold:
- Learning where you are now
- Learning how you can stand out
- Learning how you can get ahead
Learning where you are now
Doing an ecommerce competitive analysis provides you with a reference point for where your ecommerce business finds itself in the market. It allows you to define areas in which you perform better than your competitors, as well as areas in which you need to make improvements. Competitive research also allows you to set benchmarks.
When you know your position in the market, you’re also better equipped to consciously alter or strengthen that position and create a stronger brand. You can take that knowledge to refine your marketing strategy and bring your brand positioning to where you need it to be.
Lastly, a competitor analysis may also result in the discovery of new players you might otherwise not have seen coming.
Learning how you can stand out
Comparing what your competitors are offering with what customers want can help you identify gaps in the market and stand out. This relates both to the products you’re selling (quality, design, price, etc.) and to your brand character (for example, being funky and humorous in a market that’s known for boring advertising).
Learning how you can get ahead
A competitor analysis also indicates your competitors’ strengths and weaknesses. It shows you where your competitors are performing well, and where their processes and strategies are lacking. As such, you can save time by learning from and building upon the former, while the latter offers you an opportunity to do better and get ahead.
Studying the market also makes it easier to spot the latest trends among your competitors and among your target audience. If you notice that all of your competitors are starting to ship their products in sustainable packaging, you might want to do the same.
Similarly, if customer reviews of your competitors’ products applaud the sustainable packaging, you know you might lose customers if you don’t follow suit.
How to do competitor analysis in ecommerce
You can run a competitive analysis for all parts of your ecommerce business, including:
- Customer support
- Marketing
- Logistics
- Sales
In this article, we’ll focus on doing a competitive ecommerce marketing analysis. We’ll go over the different marketing channels to consider and list marketing tools that will help you with your competitor analysis.
But first, we’ll go over the essential steps for preparing your competitor marketing strategy analysis so you’re sure to collect the data you need from the right competitors.
1. Set your goals
Before you start the strategic research process for your competitor analysis, you need to determine what you want to learn. If you don’t, you risk focusing on the wrong things, not gathering the correct data, or missing crucial information.
A few examples of goals for your competitive ecommerce marketing analysis could be:
- Find out which social media channels performs best across your competitors
- Analyze who is ranking well in Google and why
- Track what type of emails your competitors send their subscribers, and how often
2. Decide on a tracking method
Once you’ve determined your goals, you can break these down into data that needs to be collected, how you’ll collect it, which team member will be responsible, and where they’ll log everything. In many cases, CRM software or even a simple shared spreadsheet is the best choice for the latter. The choice will depend on your requirements, budget, and the price of CRM tools that you are considering.
When you prepare your tracking document, make sure to also include your own business. You’ll be analyzing your own marketing strategy alongside those of your competitors to be able to easily compare them afterward.
If you’re doing a complete competitor marketing analysis, create a separate tab or document for every channel. This will give you a better overview.
Here’s an example of a sheet you could use to run a competitive Facebook analysis:
3. List and rank your ecommerce competition
Now, it’s time to compile a list of the competitors you’ll include in your analysis. If you’ve done some competitor research already, this should come easy. If you haven’t, do a quick Google search for the type of products you’re offering and see who pops up to identify your competitors.
You might also want to check social media platforms such as Instagram to find new and lesser-established brands and think of who customers referred to in conversations with your customer services team or on social media.
Lastly, Amazon is a great place to find businesses that have a similar or the same product offering as yours.
A little harder is ranking them according to relevance. While you could certainly learn something from studying all your competitors, that would take up a lot of time. Plus, the marketing strategies used by an ecommerce business catering to a different audience than yours will likely not be as interesting to you as those of a brand with the same target market. That’s why you want to focus on your direct competitors rather than your indirect competitors.
To figure out who those primary competitors are, give all of your competitors a score from 1-10 for the following questions:
- Do they operate in the same industry?
- Do they sell similar products to yours?
- Is their pricing similar to yours?
- Do they have the same target customers?
- How big are they in terms of annual revenue?
Tally up the scores and you’ll see which brands to definitely include in your competitor analysis and your secondary and tertiary competitors to potentially look at later. Pick a minimum of five competitors for your analysis to get enough data.
4. Start the data collection process
Now that you know which competitors you’ll analyze and what you want to learn from them, it’s time to collect data for your competitive analysis. Below, we’ll have a look at some of the marketing channels you can dive into and the tools that can help you analyze them.
Ecommerce competitor analysis tools and tactics
Performing an ecommerce competitive analysis can seem like a time-consuming task. While there is certainly much to take into account, there are luckily many tools that make the job easier.
Product and pricing competitor analysis
Regardless of which marketing channels you want to analyze, you need to know which products your competitors are selling, what they’re charging for them, and how their customers think about those products.
Use a web scraper such as Brightdata Data Collector to extract data from your competitors’ websites such as product images and prices, product descriptions, product ratings, stock availability, accepted payment methods, and more.
Pay special attention to product pages selling the same products as yours and consider doing a product analysis to uncover any differences that allow you to position yours with a unique selling point.
Email marketing competitor analysis
From welcome sequences to cart abandonment emails, ecommerce email marketing has so much potential to generate revenue that you can’t afford not to include it in your competitor analysis for ecommerce.
Ask questions like:
- Which type of emails are they sending?
- How often are they sending them?
- What does their copy look like?
- Do they send a lot of promotions?
- What kind of product images are they including?
Use competitor emails as examples for your own campaigns and draw inspiration from what seems to be working for them. You don’t even need to manually sign up for a bunch of email lists or track an enormous amount of emails. Just sign up for MailCharts. We track hundreds of ecommerce brands and calculate data like email frequency and promotional rate so you don’t have to.
SEO competitor analysis
SEO is a great lead generation tool, and it’s a good idea to figure out which of your competitors are ranking highly in search engines and how they made that happen. Things to look at include:
- Which keywords they’re ranking for in search results
- How much organic traffic those keywords are generating
- How many backlinks your competitors’ websites have
- Which sites those backlinks are from
- To which pages these backlinks are pointing
- What kind of content you can find on your competitors’ blogs
Ahrefs and SEMrush are the SEO standards for backlink and keyword research, while Surfer SEO is a great ecommerce competitive analysis tool to analyze the on-page features of competitor pages that are ranking well. Use these tools to answer the questions above and refine your own content strategy based on your findings.
Paid advertising competitor analysis
Lots of ecommerce businesses get started by running paid ads, but it can become a costly affair quite quickly. Try to gauge whether your competitors have managed to get a good ROI on their ad spend and compare their paid advertising efforts with how well they seem to be doing on other marketing channels. It may just be that they’re spending a ton of money on ads because they haven’t nailed SEO or email marketing yet.
Use SpyFu to find out exactly for which keywords your competitors bought Google Ads, how much they paid, and how many clicks they got. Additionally, you can look up all the ad variations they’ve run over the last 15 years. This gives you a wealth of data on the type of campaigns that did well for them and which type of ads you may want to avoid.
To know which Facebook ads a brand is currently running, go to their Facebook page and click the “Page Transparency” box in the left sidebar. A pop-up will open. Scroll down and click “Go to Ad Library”.
Social media competitor analysis
The great thing about social media marketing is that it’s out in the open. It’s much easier to know how many social media followers an online store has than how many email subscribers it has.
Not so great is that you get the best insights by manually going through your competitors’ social channels to see which of their content is performing best, how often they’re posting, and whether they’re using a specific format or style.
There are, however, a few tools that can be helpful with finding social media content that performs well:
- BuzzSumo shows you which content on a website gets the most social engagement.
- Hootsuite allows you to create feeds for just the social media content of your competitors so you can keep an eye on all of their accounts in one spot.
- Mention helps you track mentions of both your brand and your competitors’ across social media channels. This makes it easy to keep track of, for example, complaints people have about your competitors so you can do better.
Combining everything into an ecommerce SWOT analysis
When you’ve gathered all the information you need on your competitors’ marketing strategies, you’ll already be able to spot some opportunities. While you could stop there and base your further analysis on the data in your spreadsheet, it can be helpful to do this in a more structured way: by running a SWOT analysis.
SWOT is a competitor analysis framework and stands for Strengths, Weaknesses, Opportunities, and Threats. Strengths and Weaknesses are things you can control, like the quality of your products and your customer support.
Opportunities and Strengths lie outside of your control. You can prepare so you can benefit from or respond to them when they happen, but you can’t influence their occurrence. They’re things like a competitor launching a new range of products or the economy taking a hit.
Map out your own strengths and weaknesses against the opportunities and threats you spotted during your competitive analysis to act on your growth potential and anticipate possible problems.
Now that you know what is and what isn’t generating results for your competitors, it may be tempting to copy the good and discard the bad, but by doing that, you’d leave a lot of opportunities on the table. By offering a better alternative to what your competitors are offering, you can win potential customers. Improving things is also a great way to increase customer loyalty, as your existing customers will notice your efforts.
In summary, use what is and isn’t getting your competitors results as the basis to further develop your own overall marketing strategy and make better decisions. The goal isn’t to copy. It’s to take what works, improve what doesn’t, and add your own brand flavor.
Stay on top of things
While you don’t want to get paralyzed looking at what your competitors are doing, it’s a good idea to repeat your ecommerce competitor analysis periodically. Especially when it comes to marketing. Social media algorithms change, Google updates happen, and your competitors might just figure out how to adjust to them sooner than you do.
By performing a regular competitor analysis, you can save time figuring out what works within your industry, find a gap to position yourself in, and turn your competitors’ weaknesses into your strengths.
Make use of the tools listed above to analyze your competitors’ social media, SEO, and paid advertising strategies, and run a SWOT analysis to draw conclusions from the data you’ve gathered. To keep an eye on your competitors’ email strategy, sign up for MailCharts and instantly access a wealth of ready-to-use ecommerce email data.
