When it comes to developing your eCommerce business plan, writing a competitive analysis is one task that you don’t want to skip. Even if your ultimate goal isn’t to secure funding from investors, your competitive analysis plays an essential role in shaping your eCommerce strategy.
Not only will your competitive analysis give you a better sense of who you’re up against in a crowded online market, but it will also save you tons of time and money as well.
To help you kickstart the process, here are our best tips for writing a competitive analysis for your eCommerce business:
Tip #1: Determine What Makes Your Competitors Unique
Assuming that you have identified who your top competitors are, the next step is to determine what makes them appealing to consumers. Do they offer amazing prices? Are their products of exceptional quality?
Every successful eCommerce business has unique value propositions or statements that clearly describe the unique benefits a business offers to their customers. These are often found throughout a business’s marketing campaigns and on the home page of their website.
Knowing what distinguishes your competitors is valuable because you can use this knowledge to highlight your own unique value propositions. For example, your competition may have low prices, but you might offer free shipping and regular discounts to loyal customers. By drawing attention to this unique value proposition, you can potentially increase your conversions.
Tip #2: Analyze One Marketing Channel at a Time
If you start by analyzing your competition’s marketing strategies across all channels, you are likely going to become lost and disorganized.
Begin your competitive analysis by focusing on a single channel. For example, you can focus on their social media, their SEO, or their PPC strategy to begin your competitive analysis. By doing so, you can go far deeper into your analysis and uncover key insights that will help you effectively shape your own eCommerce strategy.
Instead of barely scratching the surface of your competitor’s SEO by tracking which keywords they rank for, you could go deeper by looking at their backlink profiles and Domain Authority, and performing a thorough traffic analysis.
The deeper your competitive analysis, the more opportunities you have to crush the competition.
Tip #3: Take Advantage of Competitive Analysis Tools
Performing a competitive analysis without the help of online tools is not only tedious, it’s plain unnecessary. Digital marketers have more online tools than ever before, and these tools are also more affordable than ever. Why wouldn’t you want to take advantage of them?
We created our free Springbot eCommerce Scorecard to help eCommerce marketers easily compare their key metrics with their competitors to see how they stack up. Using the Scorecard, marketers receive a monthly generated report that tells them how their marketing campaigns compare with their peers and provide them with suggestions on how to improve.
With this insight, you can achieve a quick and detailed competitor analysis without pouring over endless amounts of data.
Tip #4: Learn from Your Competitor’s Mistakes
A competitive analysis isn’t simply about capitalizing on the competition’s best marketing strategies. It’s also about learning from their biggest failures so you can save some of your most valuable resources—time and money.
For instance, social media can be a fickle marketing channel for marketers. Tongue-in-cheek Facebook posts or off-the-cuff tweets can quickly sink a business if audiences don’t approve.
With a thorough competitive analysis, you can avoid social media disasters and other marketing failures. Spying on the competition can also give you an opportunity to figure out which types of content resonates with audiences and which ones don’t.
Tip #5: Perform Regular Competitive Analysis
A competitive analysis may sound like a one-time task, but it should be performed on a regular basis. By staying up-to-date on the competition, you will always remain one step ahead of them.
Competitors come and go, marketing tactics change, and new products in your niche are always on the horizon. To meet the needs of your customers and outperform your competitors, you need to stay in the know. With regular competitive analyses, you will never allow new products and trends escape your notice or risk being overtaken by new competitors. We recommend taking a fresh look of your competitors’ data at least once a quarter if possible.