How to Do a Competitor Analysis: A Guide For Ecommerce Businesses

To grab a big market share, you need to find your competitors and analyze their strengths and weaknesses. Knowing who your competitors are and their strategies can help you win in your industry in the long run.

This guide will brief you on everything you need to conduct a competitive analysis in Nigeria to stay on top of the game.

What Is a Competitive Analysis – Definition and Objectives

This kind of analysis evaluates your competitor’s tactics, revenue, and strategies to reveal their strengths and weaknesses compared to yours. You need a set of objectives for a competitive analysis to win you a big market share.

With competitor analysis, you can see the strongest competitors in your industry, discover their strategies, guess their next actions, and react accordingly. This way, you can get a competitive advantage and further grow your business. 

For example, if you were to start a kilishi business, you would need to study big players in Nigeria like The Bosses’ Kilishi. 

Online sales without boundaries.

Reach customers from around the world with your own online store.

Sell globally

Why Competitor Analysis Is Important

Studying your rivals is one of the most strategic aspects of your business. It helps you navigate the market and make more informed decisions.

Let’s see more of its benefits below:

• It helps you understand your competition: A competitor analysis helps you understand the way your competition increases its market share.

• Competitor analysis helps you identify your weaknesses: You might not realize your where you are aching until you compare your performance with your competitors.

• It can help you uncover unique strategies to convert your target audience: When you look at your competition’s performance, you can find gaps. These could be in your customer journey or any other aspect that you might have overlooked but can fetch you substantial revenue.

• You can create an unbeatable unique value proposition: When you do a competitive analysis, you will likely emerge with a better offer that your target audience might find irresistible.

Knowing how to do a competitive analysis for your business will help you rise to the top of your industry.

How To Find Your Competitors

A key part of competitor analysis is identifying the strengths and weaknesses of your competitors. Investigate those and note your findings.

There are two key types of competitors that you should regularly be tracking: direct and indirect competitors.

Check them below:

• Direct Competitors: Direct competitors offer the same or similar offerings as your own business. These competitors should be your highest priority because they pose the most threat to your business.

• Indirect Competitors: Indirect competitors are other businesses that offer a different type of product or service than your business but still serve the same consumer base. While they do not directly threaten your business, you should monitor them.

Start by defining these competitors and studying their websites, products, and services. If needed, you may also conduct an e-commerce market share analysis to help you better understand the market share and positioning.

You can achieve this with the help of market research and analysis services. These tools can provide incredible insights into different aspects of your business.

You can use a spreadsheet to document everything. Ideally, you should identify at least 6-7 competitors in your industry. This will help you gain insights into more areas you overlooked when targeting your target audience.

Understanding Your Competitors’ Strategies

Analyzing competitors also involves understanding their products, services, and pricing strategies. While you may offer similar offerings, you must also investigate their approach to providing an industry-wide product or service.

For example, if you were into making a handbag business, your bags may be of high quality and unique, but your competitors may offer custom options and more features. To stay ahead or remain competitive, you should also come up with custom options, usable features, and faster delivery.

Beyond this, also check and note their pricing strategies. Pricing is the amount you charge for your product or service. Use your competitors’ pricing plan to guide your own.

This will guide you in setting a price range that is on par with industry standards. You might want to consider factors such as your pricing model, tiers, options, and discounts.

Analyzing Your Competitors’ Marketing and Advertising Strategies

Your competitors communicate with the target market in different ways to convert them. However, you will only know how they convert by analyzing their marketing and advertising strategies.

Here are a few tips for carrying out a competitive analysis of ecommerce:

• Check out their messaging: Brand messaging is integral to your marketing and advertising strategies. You can stand out in a crowded marketplace with clear and unique messaging.

• Study their branding: Branding is about building a clear-cut personality for your business in the minds of your target audience and the public. Essentially, branding has your company’s story at its center. Then, your name, visual identity design, mission, values, and tone of voice surrounding it.

• Research their marketing channels: Your competitors’ channels may sway your strategies. This is because you want to capture a big market share. You cannot afford to ignore a channel that can help you connect easily with your target audience.

Analyzing your competitors’ strategies can help you carve a unique personality for your brand and remain memorable to your target audience. You can then use this newfound information to check your channels and adjust accordingly.

Examining Your Competitors’ Online Presence

A competitive analysis is incomplete without an online presence study. You can start by checking their website strategy and social media presence, as well as measuring their SEO performance.

Below, we will review each one in detail so you can get the most out of every strategy.

Website Analysis

Start by checking your competitors’ websites. The success of your ecommerce business in Nigeria can be impacted by a well-designed and user-friendly website.

Look for the following through the process:

• Call-to-action buttons: You must assess the impact of each call-to-action and adjust yours accordingly.

• Landing page designs: Landing page design is the process of crafting an attractive site page for your target audience and website visitors. A good landing page design should convert from leads into subscribers or customers. On your competitors’ websites, examine their landing pages and how compelling they are.

• User navigation: You should not forget to check how easy and intuitive navigation is on their site. Note your findings to improve your website design for your users and target audience.

Also, don’t forget about the user experience. Study it according to a quality benchmark to gauge the overall user experience.

Presence on Social Media

If you want to assess the social media presence of your competitors, investigate their follower base, engagement rate, and content strategy. You should also find out the platforms they use and their branding on each platform.

Answer the following questions for each rival in your research:

• How many followers do they have altogether and across the different platforms?
• What type of content do they publish often?
• Does their positive review outweigh the bad or vice versa?
• What kind of influencers do they work with?

Note your answers for future reference.

SEO Performance

Search engine optimization (SEO) should also be your priority during your research. You may use tools such as SEMRush or Ahrefs to assess the SEO performance of your target competitors.

You’ll want to check the following for each competitor:

• Number of ranked keywords and their average positions in the SERPs;
• Content quality of their blog and landing pages;
• Overall domain authority and backlinks profile.

Once again, you must document your findings. This makes it easy to compare your performance to theirs and improve in necessary areas.

Conducting a Comparison SWOT Analysis

A SWOT analysis is a competitive framework used to find your company’s Strengths, Weaknesses, Opportunities, and Threats. SWOT spotlights your competitors’ strengths and compares them to your business.

Carry out a SWOT analysis of your competitors to put everything you’ve discovered into a concise report.

In your SWOT analysis, you can explore the following:

• The strengths and weaknesses you can see in competitors.

• Available opportunities your business can capitalize on.

• The list of things that threaten your business.

Strengths and weaknesses are aspects of your business that you control and change over time.

They include:

• Product offerings;
• Partnerships;
• Intellectual property;
• Number of employees;
• Market share;
• Assets;
• Insufficient customer service;
• Systems, tools, and processes.

Opportunities and threats fall outside your control. You can plan for changes but can’t influence these elements.

They are the following ones:

• Competitor products;
• The economy;
• Consumer trends;
• Regulation;
• Market size;
• Market demand.

Consider running a SWOT analysis annually. It helps you stay on top of market trends and can convince investors when included in your business strategy.

How To Gather and Analyze Competitors’ Data

Competitor analysis tools will help you easily track, analyze, and learn from your competitors’ strategies. Many tools are available, but you need the perfect one to get ahead. 

You may use the below tools for collecting and analyzing competitor data:

• Google Alerts: Google Alerts is one of the best tools you can find for competitive analysis. It enables you to receive real-time notifications whenever your competitors are mentioned online. This way, you can adjust your strategy based on your check by identifying such new opportunities.

• SEMrush: A powerful competitor search tool, SEMrush, offers critical insights for competitive analysis. It lets you gather data on your rival’s organic and paid search strategies, keyword rankings, backlinks, and more.

• SimilarWeb: SimilarWeb is one of the most effective tools for evaluating a competitor’s online presence. It provides data on website traffic, top referral sources, audience demographics, and more. SimilarWeb allows businesses to grow due to insights into their competitors’ marketing strategies.

• SpyFu: With SpyFu, you can uncover your competitors’ best-performing keywords, ad campaigns, and organic search rankings. These can prove invaluable to your future online marketing strategies.

• Ahrefs: Ahrefs offers a range of tools for competitive analysis, keyword research, backlink research, rank tracking, and more. With those, you can research your competitors and monitor your industry.

• Rank Signals: You can discover your competitors’ SEO backlinks and traffic sources with Rank Signals. When you enter their domain, Rank Signals will find your backlinks. This discovery can be helpful for you when applying your backlink strategy.

Using these tools enables you to assess your website’s performance in comparison to your competitors, exposing areas for improvement and optimization. This data can help customize your digital marketing strategy to better target similar audiences.

Creating an Action Plan to Follow

Your action plan is the next task you should embark on. You already know the tools you need. Next, you should know how to access these tools so you can leverage them.

Your action plan should follow this order:

• Draw up your emergency action list: You’ll need to list out a set of actions that your competitors could take. It prepares you ahead of what your competitors might do that may challenge your position.

• Focus on a set of priorities: After creating a list of things you want to do, rank them based on their importance and urgency. Keep your focus on efforts that impact business growth and relevance.

It is key to examine the existing information and create an action plan to guide your efforts. This way, you will gain valuable insights and access to marketing opportunities to support your business.

Ongoing Tracking and Monitoring

Beyond the competitive analysis, you need to do competitive monitoring. It focuses on the most important aspects of your ecommerce business. This includes competitors’ successful strategies and novel product launches. 

This is the process of identifying, studying, and tracking the landscape of your competitors. This process involves continuously paying attention to key metrics like social media presence and activity. 

Other metrics to focus on are pricing changes, longevity strategy, marketing campaigns, sales prospecting, and product launches. With those, you can understand the areas and methods where your competitors lead your brand. 

Such monitoring also involves collecting data on market trends. Study this data to get actionable insights and develop long-term strategies for a competitive advantage.

Leveraging Competitor Insights

So you studied your rivals and gathered a report on them. How do you take advantage of the knowledge you gained? The following are ways to turn things around and beat the competition.

Identifying Market Gaps

Uncovering market gaps becomes much easier once you carry out ecommerce market analysis. Since you already did a comparison of strengths and weak points, by now you can tell what they have that you don’t and vice versa. 

For instance, your rivals might be mid to big industry players. So, they may be lax when it comes to pleasing customers. This gives you the upper hand to satisfy customers in ways your competitors may not be able to. 

It could be that customers are always complaining of slow response times like in the case of some Instagram vendors. To outperform them, you need to create a system that allows you to respond and deliver on time. 

Developing Competitive Advantage

With the competitor SWOT analysis you’ve done, market gaps have been identified. So, deciding your ecommerce competitive advantage should be next. 

Following the customer satisfaction example we gave earlier, if you were a tech or gadget brand you can offer to help customers set up their goods free of charge or at a discount. This would work because Nigerians love free things. If they already paid in full for the item, they won’t want to pay anything further. But it’s smart to add this fee to their package upfront.

You can introduce an offer called “My Support Package” to show you care about them. They know your competitors charge for these things. So, when they do an ecommerce product comparison between you and your competitors, they will choose you and always refer you. 

Setting Pricing Strategy

If you have yet to do a competitor pricing analysis, it will help you understand how your rivals positioned their products in the market. This gives you a better view of how they offer discounts and special offers and if these get more people to buy. You’ll also see if they have only attracted low-end customers as a result.

Your pricing tactic all depends on who you wish to sell to (low or high-end customers). Whatever works for your competitors, you can do it better. So, your job is to outdo them if you want your market position to increase.

Refining Marketing Strategy

Ecommerce competitor research gives you a better view of what’s working and what you can apply to your marketing. Comparing your competitor’s past and present helps you see the steps they took to arrive at where they are. 

For instance, could be that your competitors saw a 30% jump in sales after using ads or micro-influencers. It that case, maybe it’s time to run ads.