Competitive analysis, also known as competitor analysis, is a process in which businesses research existing and potential competitors in the same industry to identify, examine, and gain insight into their strengths, weaknesses, products, services, sales, and marketing strategies.

No matter what business you run, competition is an effective way to improve your work, convert more prospects, and outperform others on the market. It could be a brick-and-mortar store next to yours or an eCommerce platform offering similar products for discounted prices.

In this article, we’ll explain eCommerce competitive analysis in detail and spotlight the best ways to analyze competition over the most popular eCommerce platforms. We’ll cover the following:

Why do you need to conduct a competitor analysis for eCommerce stores?

Competitor analysis improves eCommerce business strategy

Nowadays, dropshipping dominates most of the eCommerce industry worldwide, leading to intense competition between various vendors. Moreover, other eCommerce forms are also witnessing many similarities due to a large number of online stores over several platforms.

Conducting a competition analysis in eCommerce is critical for

1. Developing a more effective business strategy
2. Ensuring a competitive edge like prices or diversity
3. Avoiding losing market shares to others in the same industry

Although a competitor analysis is essential before launching an eCommerce business, it’s an ongoing process that should be done at various business stages to ensure constant improvements.

Competitor analysis affects eCommerce products and services

Find out what your competitors are selling in real-time, and adjust your supply chain plans to outperform their plans. No successful eCommerce business can ignore the importance of tracking the products and services of every competitor targeting the same audience.

Competitor analysis helps businesses identify potential opportunities to outperform others. It enables staying on top of the industry’s trends, ensuring that products and services meet the latest standards. Researching several powerful competitors provides insights into what people are looking for and what motivates them to place orders. Furthermore, it assists in identifying the distinctive value of the products or services and their unique aspects, which greatly benefits future marketing campaigns.

Competitor analysis exploits others’ weaknesses

Research your competitors to get a deep knowledge about their current status, what they’re selling and what people think of it. Moreover, find out people’s complaints and improve your eCommerce business according to their expectations.

Conducting a competitor analysis shows where competitors might fall behind, which helps identify opportunities to take advantage of and try out new strategies. For example, checking customer reviews for competitors’ products prevents falling into similar mistakes. It enables finding out what the market is looking for and is ready to buy once released.

Competitor analysis sets a growth measure for eCommerce

Finally, competitor analysis helps set a benchmark for the business to measure its growth. When conducting competitor analysis, bigger and smaller companies should be included. On the one hand, larger, well-established firms can give a model of success and a reference point to measure future growth. On the other hand, researching smaller businesses identifies which may pose a threat and how to address it as early as possible.

What tools do you need to conduct an eCommerce competitive analysis?

In today’s world, many online tools are available to facilitate conducting competitor analysis easily and effectively. Utilizing such tools has many advantages, and the following are the most important:

1. Monitors competitor’s online performance in real-time
2. Provides instant and accurate reports about price changes, new products, and other updates
3. Reveals competitors marketing strategies by analyzing online activities
4. Saves time analyzing data from various channels like websites and marketplaces
5. Concludes the secrets behind a competitor’s successful campaign

We put together a list of some powerful competitor analysis tools

Quick Search

Quick Search is a powerful social media search engine that provides an instant overview of online businesses through extensive coverage of blogs, forums, news sites, and social networks. It monitors all online conversations surrounding a specific eCommerce business, including what the influencers say about it and what new trends are rising. Most importantly, everything happens in real-time.

Users can input multiple competitors in the search engine and compare sentiment with an accuracy percentage of 90%. It can also help discover information about the audience, like their demographics, location, gender, age group, and more. There are filters to dig deeper into topics and trends to find the stories leaving the biggest impact.

By that, users can learn about the competitors’ performance, what should be focused on more, what is missing, and new ideas for how to resonate with people and attract customers. 

Sprout Social

It is a competitor analysis tool for social media platforms, ranked as the number one method to connect with customers. This tool covers multiple data points enabling users to understand eCommerce activities on social media platforms like Facebook marketplaces and Instagram stores.

Sprout Social helps assess and optimize the company’s social strategy with trackable data points across social media platforms like Instagram, Facebook, and Twitter.

Sprout Social is a good tool to know what the competitors are up to and benchmark the business’ growth against the average of compared profiles. It also offers a premium analytic tool for a deeper look into social platforms and customizable interactive charts to align with the business goals.

It can tap into publicly available social conversations, by which the business can know how consumers feel about products and services offered by competitors and examine what people think about the company itself. 

Wappalyzer

It is a free add-on tool that runs on Firefox as a cross-platform utility. Wappalyzer reveals technologies used on different websites, identifying different types of software running on a specific eCommerce. So, users can click on a competitor’s website and get a fast scan of the eCommerce software used. It is an essential tool for the business to understand the success behind its competitors’ eCommerce businesses.

SpyFu

SpyFu was originally called GoogSpy. It is a search analytic tool that shows keywords businesses use on Google AdWords. So it identifies every keyword competitors invest in and all the tests they run. This tool also reveals the keywords that competitors are ranking for and backtracks the content linking to competitors’ websites.

SpyFu gets its data by web-scraping and refreshes it every month. Rather than giving an overview of what is happening in real-time like some tracking engines, SpyFu does it with larger SEO and SEM trends. This competitor analysis tool finds keywords most relevant in the market and competitors’ specific niche keywords.

How do you conduct a competitive analysis on eCommerce?

Conducting competitive analysis on eCommerce is not so different from running it on all other kinds of online businesses. The same tools and methods can be used for the same purposes. Winning eCommerce patterns can be revealed by analyzing large quantities of web data on specific niches and products.

E-com Marketplace Competitive analysis (Amazon, eBay, etc.)

Those are considered to be the giants of online retail. Sellers on those platforms face many competitors selling the same kind of services or products they do. E-com marketplace competitive analysis is essential to gain an advantage and always be one step ahead of other sellers.

1. Select the top competitors that may threaten your eCommerce business in the same E-com marketplace; 7 to 10 is enough
2. Analyze their strengths and weaknesses and what products they sell the most. Additionally, focus on why they sell these products more than others, what added value they bring to customers
3. Determine the different marketing ways competitors use to generate sales
4. Review all the information gathered, then come up with a competitive approach by compiling all their strengths and disposing of weaknesses

Since everyone on these platforms uses the same methods to publish their content and list products, competitive analysis becomes necessary. It helps analyze what competitors are making more sales; maybe it’s a price reduction, a special offer, better visuals, or something else.

Competitor analysis for Shopify stores

On Shopify, determine your competitors, then find out how much they’re selling. Search for keywords and specific collections and browse Shopify stores ranked by website traffic.

Since Shopify assigns sequential order numbers, it is easy to find out how much the competitor sells without using special tools. At the beginning of a month, buy one of the cheapest items from the competitor and save the order number; then, by the end of the same month, buy the same item, get the order number, and compare the two numbers. Doing this will determine how many items were purchased throughout the month.

Competitor analysis for BigCommerce stores

Competitor analysis should be done before launching a business and when a strategic change is to be made. Most businesses do competitor analysis twice a year, but when dealing with BigCommerce stores, the analysis must be done monthly or quarterly.

BigCommerce stores should never be let out of sight to stay at the top of the game. Those competitors pose the biggest threat to any business. It is most beneficial to know their marketing techniques and their best-selling products. Use the information gathered to gain more reach, attract some of these stores’ customers, and win them to your side.

Competitor analysis for Magento stores

Magento, now Adobe Commerce, is one of the biggest eCommerce platforms. Corporate entities widely use it, and it is famous for being the best option for tech-savvy entrepreneurs. Select the top competitors carefully, and study their methods closely. After knowing what those competitors are best at and their shortages, it will be easy to devise a plan to beat them.

When analyzing Magento competitors, remember that website traffic is the killer factor, and determining how your competitors attract traffic is your best plan.

Competitor analysis for WooCommerce stores

WooCommerce stores are open-source stores designed for small to large-sized online sellers. When conducting a competitor analysis for WooCommerce stores, try to include stores bigger and smaller than yours. Most people do not include small or newly established stores, which is wrong since some stores grow fast; not having them in the competitor analysis can leave you blind-sighted.

When working on platforms that include various competitor stores of different sizes, try to keep a close eye on well-established and newly made competitors. It will help your store keep its place and grow bigger without setbacks. Competitor analysis is proactive, not reactive.

Final Thoughts

The objectives of competitor analysis are: to study the change in the market environment and predict market supply and demand in a way that will keep you ahead of the game by adjusting the business strategy to optimize for new conditions. It is done to understand the competitors, their strengths, and their weaknesses, and it is to help the business step out and lead the competition instead of trying to catch up.