Launching an e-commerce business comes equally with opportunities and challenges. One crucial step in this journey is understanding your competition. When done right, competitor analysis offers valuable insights that help you stand out in the e-commerce marketplace.
But, where to start?
This article breaks down the complex process of competitor analysis into simple, actionable steps. We look into multiple areas of your competitors' businesses, from product offerings and user experience to marketing strategies, customer service, shipping policies, and unique propositions.
To make analysis more tangible, we've suggested various visualization methods such as Competitor Positioning Maps and SWOT Analysis Diagrams. These provide an at-a-glance understanding of where you stand in the market, but let’s start with the beginning. :)
Make a list of all your competitors and rate them on a scale of 1 to 5 for each question (1 = Poor, 5 = Excellent)
1. Product Offerings:
- How diverse is their product range?
- How competitive is their pricing?
- What unique features do their products offer?
2. Website and User Experience:
- How user-friendly is their website?
- How smooth is their checkout process?
- How well does their site perform on mobile?
3. Marketing Strategies:
- How strong is their social media presence?
- How engaging is their content marketing?
- How visible are they in search results?
4. Customer Service:
- How responsive is their customer support?
- How clear and customer-friendly are their policies?
- How comprehensive is their FAQ section?
5. Shipping and Fulfillment:
- How competitive are their shipping options and costs?
- What are their delivery timeframes?
- Do they offer international shipping?
6. Unique Value Proposition:
- How clear is their brand messaging?
- How well do they target their audience?
- What makes them stand out in the market?
Now let’s make it easier to visualize these ratings with a competitor positioning map:
Create a 2x2 grid with axes like "Price" and "Quality" or "Product Range" and "Customer Service". Plot your competitors on this grid based on the score you got to visualize their market positioning.
Another way to analyze your competitors would be through a SWOT Diagram.
Create a quadrant for each competitor (and yourself) showing Strengths, Weaknesses, Opportunities, and Threats.
Or if you’re more interested in the key features your competitors offer, a straight forward way is to create a Comparison Table.
Create a table listing key features/offerings, with checkmarks or YES/NO for each competitor.
Action Steps:
- Identify gaps in the market based on your analysis.
- List 3 ways you can differentiate your store.
- Prioritize improvements for your own store based on competitor strengths.
Remember, the objective isn’t to mimic your competitors but to learn from them. To find unique opportunities for your own store to shine.
So start uncovering those golden insights that hold the potential for your e-commerce success!