Most of the online retailers have a morbid fear for their competitors. However, the fact of the matter is that competition and competitors’ analysis is good for your business. The good thing is most of your eCommerce competitors will be thinking alike, and if you can think differently you can certainly keep ahead of the competition.
To achieve this it isn’t just enough to understand your own business thoroughly. You need to have insights on how your competitors think and analyze their data and acquire invaluable information, which will go a long way in matching their performance and even outdoing them.
Advantages of knowing your competitors
Competitors’ analysis involves getting insights into what the competitive advantages spell out for you. Also, trying to understand the intricacies of the marketplace and how to deploy the advantage you hold. Your efforts should always be targeted on such a marketplace and you can see your ROI increasing steadily.
Remember that you should never become a commodity, which can only be competitive in the price. The more the competition, the lower your sale price goes, which does not augur well for your business. Instead of that, study your competitors and try to find out who they really are. Having a well-thought out, structured communications plan is important to cash in on the advantages.
Pay equal attention to your customers and work towards giving them an outstanding experience. This will help you stand apart and far ahead of the competition. Customer experience is not just restricted to eCommerce competitors; it applies to all types of business, which need focus on giving a great customer experience to develop the business.
Types of Competitors
There are several types of competitors in the eCommerce domain. Understanding and knowing as many types as possible helps find new opportunities, avoid making costly mistakes and also differentiate the competitors. Categorize your competitors so that you can understand them better.
Look out for the techie eCommerce competitors. They possess the technical wherewithal and there is no technical challenge they can handle, that to with consummate ease. They are adept at acquiring customers and can easily generate profits within a short time. The technical eCommerce competitor’s website is bound to be design-perfect and offer an unmatched mobile experience because they know which tools and extensions to use best.
While the techie eCommerce entrepreneur may be brilliant technically, he may not be great at marketing or content creation or even product selection. If your eCommerce competitor is an industry expert planning to branch out on her/his own there is a distinct advantage. They could be a brick-and-mortar store venturing online.
Such people have thorough product knowledge and possess the basic business acumen. They can easily identify hot-selling products and the latest trends. However, their undoing may be lack of expertise in online marketing and minimal knowledge in technology. The other types include the business pro who knows how to approach a business problem and find a solution quickly. Their goal is only achieving profits and they will certainly be good at marketing and know how to serve their customers. They may encounter some starting trouble due to their lack of technical knowledge and they may not be so industry savvy as well.
Benefits of Competition in Business
There is bound to be competition in every business. Lack of competition can only lead to inactivity and cannot benefit the customer. Even businesses cannot hope to benefit much if there is no competition. When there is stiff competition the creative streak in you starts working and you come up with innovative products and services. Businesses, especially eCommerce businesses start exploring new technologies and adopting new business strategies to stay ahead of their eCommerce competitors.
Also, competition necessitates the need to focus on quality. With your competitors breathing down your neck, you’ll plan to outdo them by offering the best quality, because that is key to customer satisfaction. Another great benefit of competition in business is that you go the extra mile to understand the customer preferences and exceed expectations. Once you get to know the pulse of your customers, the success of your business is guaranteed.
Who is your Competitor?
Competitors’ analysis involves extensive research and forms the backbone of a well-planned business or marketing strategy. You need to be able to identify who your competitor is, and the first step is to identify your direct and indirect competitors. One great way of identifying your direct competitors is to do thorough market research on your product or service and find out how many others are selling them online. Check which companies are appearing when you use the related keywords while searching.
Who better than your customers to give you the best insight into who your competitor is? Customer feedback can tell you a lot about your direct competitors. A short questionnaire on which other products and services they were looking at before turning to you will give you very valuable information. Also, find out on social media what the customers are looking for. Check out the various forums including Quora and Reddit where customers leave a distinct trail. Being an eCommerce company, you need to do keyword research which will help you easily identify some of your indirect competitors as well.
eCommerce Price Competition
Pricing for eCommerce is not easy and can be very challenging. While there is a compelling need to look at the prices your eCommerce competitors are quoting you cannot afford to get caught in a price war that can result in rock-bottom prices. Competitive pricing is never healthy and will show adverse results. You will end up having to sell 4 times your planned target to get the same profit.
A smart pricing strategy would be taking into consideration competitors’ prices and customer requirements as well. While the prices need to be competitive enough to motivate the customers to hit the ‘buy’ button it should never devalue the very product that is being sold.
Remember that brand and its value plays a very important role in the pricing strategy. If your customer thinks very highly of your brand, price need never be a deterrent. Your product needs to be different from that of your competitors’ and should offer a better value proposition. Also, customers tend to go by customer testimonials. What is known as social proof is all to do with faith and trust you create in a customer. Positive product reviews are what customers look for online before making a purchase from any eCommerce company.