Importance of Competitor Research for Ecommerce Startup

What is competitor research in eCommerce?

Competition is one of the most crucial elements in a business environment. In a run of mill circumstances, nothing external affects businesses more than the competition. And competition comes from competitors. What your competitors do, affects you, and vice versa. Thus, it is a prerogative for businesses to remain convergent with their competitors and competition. The goal is to formulate strategies and take business decisions to stay at par or ahead of the competition. And the answer to this comes from competitor research.?

ECommerce has evolved as a competitive channel of distribution as a part of contemporary business models. Startups could be good with their digital marketing efforts but it is not enough to enter and capture markets. A few strategic decisions by the existing players and even the best of ideas begin biting the dust. But with eCommerce market intelligence, competitor research done right, and insights and analytics at disposal; even the biggest of brands feel the heat from new players in the market.

?A few important reasons in support of competitor research for eCommerce startups are highlighted ahead in this blog.

Importance of Competitor Research for eCommerce startups

Identifying the Competitors: Market Leaders and Direct Competitors

One of the most important objectives of market research is to know who the competitors are. Only then could their strategies and influence be determined.

Competitors are classified into three categories - market leaders and direct and indirect competitors. Market leaders are the established brands. It could be one or more but generally, they are in the same cluster. New players usually avoid locking horns with leading brands.

The indirect competitors are the players competing for a different segment. Hence, these players could be discarded. For example, Android OS and Microsoft OS are indirect competitors as they are competing in different device segments i.e. smartphones and computers/laptops.

Direct competitors are the players competing for the same market segment. For example, there was a time when Microsoft and Android were direct competitors in the smartphone OS segment. The activities of direct competitors echo to and fro at short intervals.

Competitors’ Value Proposition

In eCommerce, the value proposition offered to customers has extensive coverage. Going beyond the product, the emphasis is on the customer journey and customer experience. These two further encompass digital marketing, website UX, delivery standards and timelines, payment method flexibilities, ease of return and refunds, etc. Take for example a simple website feature of stock arrival notification. Customers have to just tap and they get notified on their phone or desktop. It is both a website thing and an aspect of digital marketing. It gives a push to the shopping journey and elevates customer experience not just by notifying them about stock arrival but also helps keep the brand closer to them. ECommerce competitor research helps in identifying every big and small effort on the part of competitors to enhance value propositions.??

Competitors’ Pricing

You cannot simply make a product and price it arbitrarily. There are reasons and factors why customers are willing to pay a price for a product in the marketplace. The first factor at play is the intensity of the demand for a product. Medicines and essentials top the list. The second factor is the ease of availability. Scantier the availability or the supply, the higher tends to be the price if it is a product on demand. When demand and supply are favourable, competitors’ pricing becomes a deciding factor. And in eCommerce, customers can quickly compare prices over the internet. If everything else remains the same, even a small difference in the prices could sway customers away to competitors. Competitor research helps startups gather meaningful and related data and insights to gauge the prevailing pricing strategies among their direct competitors.

Competitors’ organic and inorganic efforts

The competition to increase visibility to digital audiences has significantly increased over the last 5 years. Organic efforts like SEO and routine content marketing activities have proved to be less effective than the paid routes. Of course, you have to be good to succeed in either. But in highly competitive segments, eCommerce brands do mind switching to the paid forms of digital marketing. For example, an eCommerce business dealing in oriental perfumes in the Middle East may find it challenging to succeed at digital marketing with organic strategies alone. However, organic efforts could give impressive results for eCommerce brands dealing in smartphone cases and covers given the generic demand for these products. Getting to know about the mix of organic and inorganic strategies adopted by direct competitors for digital marketing provides hints to new businesses for their digital marketing efforts. These insights come from competitor research.

Competitors’ Social Strategies

Social media is a great platform for businesses to connect with their audiences. And when we say connection, it not only implies selling but also establishing social bonding of brands with customers at both mass and individual levels. How brands interact with customers on a public or community forum displays their customer-centricity.

With so many platforms with different features to represent a brand persona, the possibilities are immense. Understanding competitors’ presence and efforts on different social media platforms become vital to reach out to the same audience in better ways. Again, it sets the tone of social goals and objectives for other players in the industry.

ECommerce competitor research could provide many important leads. For example, are the other players on social media only for brand promotion? Are they offering social shopping options?

Competitors’ Payment Solutions

The payment solutions offered by direct competitors on their shopping apps and websites are usually the same. It eliminates any scope of brand differentiation and puts all players on the same ground on the payment front. Nowadays, there are multiple payment solutions including easy EMI plans. The problem arises when it comes to foreign or international markets. The payment options may be visible on eCommerce sites but it does not shed light on improving the strategies for offering better payment solutions. Ecommerce competitor research helps businesses gain a detailed understanding and insights on consumer payment behaviour vis-à-vis various parameters like price range, product categories, demographic factors, etc.

FAQs

How do you analyse competitors in eCommerce?

We can help you with our market research services for eCommerce and retail. If you are already on our website, please leave us a message or give us a call to know more about our services.

What should a competitor research include?

In addition to the points covered in the blog, other ideal inclusions are delivery outreach of competitors, their top-searched products, UGC and reviews on their products, etc.

How can YRC help in eCommerce competitor research or eCommerce market research for startups?

We provide comprehensive market research reports along with CTAs and recommendations aimed at helping our clients formulate effective marketing strategies and develop robust business models. We use advanced eCommerce market research tools.

About YRC (Your Retail Coach)

We are a retail and eCommerce consulting enterprise with a budding transnational presence. With 10+ years (and counting) of experience, we have delivered business solutions to 500+ clients from over 25+ industries. Our projects are handled by veteran retail and eCommerce consultants.

You can get service-related queries answered by one of our retail and eCommerce consulting experts via our website.

We post regular updates on the retail and eCommerce sector on our YouTube channel. If you are more into reading, there is a blog section on our website.