To succeed at e-commerce, you need to learn how to reach the front page of search results, win price comparisons without losing profit, and claim coveted featured spots like the Amazon Buy Button. You could try to reinvent the wheel and explore how to do this on your own, or you could observe the brands that are already crushing it and learn from them.
Competitor research is essential to business. In e-commerce, you need to research how much a product will cost to produce, so that you can determine how much you need to sell it for in order to make a profit. Then, you’ll need to research your would-be competitors to find out if the market is willing to buy at that price point.
If you don’t know what your competitors are doing, you can’t meet or exceed what they are offering. In sports, for example, opposing teams and players invest hundreds of hours into researching and studying their competition to learn their moves and tactics. Colonel Harland Sanders meticulously researched McDonald’s before launching KFC. Sam Walton regularly visited competing stores to find out what they were doing. Steve Jobs famously quoted Pablo Picasso, saying “Good artists copy, great artists steal.”
E-commerce is all about competition, and if you want to stay ahead, you must take part. By taking the time to research your competitors, you can take the best of what they are doing and create something new and better.
Research your competitors to optimize your business
“There are almost no new ideas.”
While this isn’t always true, almost every business takes something that already exists and applies something new to it.
To achieve this, you must understand what your competitors are doing and why, so that you can make the right decisions for your business. This will in turn give you a competitive advantage, which you can use to add value.
Competitor research allows you to determine what your competitors are up to, what consumers do and do not like about them, how to compete and get in the lead.
Competitor research reveals…
- Strategic weaknesses
- Planned strategies
- Branding strategies
- SEO tactics
- Customer loyalty
- Brand growth
- Market trends
You can then utilize all this information when creating your own strategies and determining brand direction.
What to look at
You can hire a company to do the research for you, or you could do it yourself on a regular basis to get ongoing results. Here are a few things you should do, if you decide to do the research yourself.
- Visit their website and channels, take note of key metrics like domain authority and UX.
- Follow them on social media.
- Order something from them, and observe how they interact with and serve their customers.
- Contact their customer support to see how quickly and knowledgeably they respond.
- Read their reviews.
- Look online to see if they talk about their business process.
You can also integrate tools that will make following their business trends and strategies easier. For example, monitoring tools like Google Alerts, RSS Feeds, and Twitter make it easy to see when and where your competitors are mentioned online. Other tools like SEMrush and Ahrefs can help you to determine where and how your competitors are getting traffic.
Look at their reviews
More specifically, their negative reviews. While most people will spend a lot of time looking at what their competitors do well, you should remember that what they get wrong can be equally as valuable to you. Identifying competitor weaknesses allows you to focus your brand strategy on your competitor’s weaknesses, to capitalize on their market and to stand out in comparisons.
Even simple customer product and store reviews can be immensely valuable for helping you to understand these weak points. For example, if you are aware that a competitor offers the same products you do but struggles with timely shipping, you could make fast shipping a prominent part of your branding to capture their frustrated customer base.
Get inspiration, don’t copy
While competitor research is crucial to building a brand strategy, it’s important not to copy directly. Copying can make you liable for litigation, and shows a lack of brand ethics or creativity to potential consumers. Direct copying also makes it difficult to compete with already established brands, because you will always come in second. When you copy your competitors, all you’re doing is providing a product or service that’s already available, from a team with less experience.
Instead, take inspiration from your competitors and improve your own products and business modules. For example, if you see a private label product that a competitor is selling, you shouldn’t copy it unless you can do it better, cheaper, or put your own spin on it. If you cannot give a product a unique added value, it won’t benefit you to produce it yourself.
Invert their model to reach untapped markets
While it is easy to follow trends, you can provide something new in every area of your business using a simple invert model. Figure out what your competitors are doing and then rather than following the trend, go against it. If the trend is for cheap plastic versions of a product, offer high quality versions at a premium price. Figure out what your market is doing, and do something different.
Add convenience with All-In-One
People will pay for convenience. Many e-commerce businesses would benefit from reviewing their industry and consolidating all the products that consumers typically buy together. For example, if your competitors sell complementary products, consider adding them to your own inventory so you can offer everything a customer needs in one place.
Learn how to stand out from competitors
E-commerce typically creates a great deal of product overlap, which causes an abundance of choice. Even shopping on Amazon and eBay, the average consumer can find dozens of sellers for popular brands and generic items. This creates confusion, difficulty in making a purchase, and can slow the buying cycle down, because consumers must take the time to decide which store is the best. This is especially pertinent when selling branded items that have no real differences.
By copying your competitors, you give yourself a competitive advantage that you can use to add more to the product or service, so that you stand out. You can achieve this through consolidation by offering more products or packaged deals. You can also work to shrink the market by offering more and better value for the money, so that customers are forced to choose you to get the best deal.
What to do when others copy you
Competitor research is a smart, common business practice. So if you’re doing well, don’t be surprised when others start copying you.
This can be offensive, hurt your sales, and endanger your business success. If it happens, adjust your brand strategy to combat it.
Offer value, not price
Offering the lowest price may win you bidding wars, but it isn’t a long-term strategy unless your only goal is to introduce customers to your brand with a small purchase. Innovation and technology is developing so quickly that there will always be a cheaper option out there.
Instead, focus on offering the best value for money. If you’re selling branded products, choose a reasonable price and try to make it competitive by bundling items. If you’re selling private label products, underpromise and overdeliver by giving customers more than they think they are paying for. Delivering on every promise will put you on top.
If you can’t lead the way with value or price, you can lead the way with new ideas and products, or distribution. Innovation can be as simple as creating packaged deals for products that you know consumers typically buy together, or as complex as creating your own private label product to address the concerns you see in reviews on your and competitor products. If you’re always working towards something new, you will be difficult to emulate.
Put the customers first
E-commerce shoppers value quality service to the point where 57% of consumers spend more with companies that offer better customer service. At the same time, only 7% of consumers found that customer service exceeded their expectations. By providing great customer service, you add value to your brand, increase your customer lifespan, and potentially make more money. Great customer service also helps you to stand out against competitors.
Understanding your competitors, what they do, and why they do it can be extremely valuable to businesses of all sizes. By understanding what your market is doing, you can make decisions to copy the best parts of it, while moving your brand in a new direction so that you stand out from the crowd. And, if you’re offering everything that your competitors do in a more attractive package, you will naturally dominate the market.