3 Useful Competitive Analysis Metrics for eCommerce Brands
Do you think monitoring competitors and competitive analysis are beneficial for your success? Maybe not, as you believe that your competitors' tactics are not affecting your business. Or perhaps, you do find it essential, but it is too time-consuming, and you don't have time for it. This article explains how important it is to keep a close eye on your competitors, how competitor intelligence tools can make the process easier and faster, and which metrics are helpful to start analysing.
Why is it important to benchmark competing online brands?
To continue to grow as a company, it is imperative that you do not sit still and let opportunities go by. A successful online brand is always looking for new ways to increase eCommerce profits and acquire new customers.
Monitoring the competing market can hand you the data to make an informed decision and build your strategy. Whether you are thinking about:
- Growing with existing products in a current eCommerce channel;
- Finding new eCommerce channels for existing products;
- Releasing new products on existing eCommerce markets;
- Introducing new products in new channels.
For each growth strategy, you should start your competitive analysis by listing a few channels, brands and categories you want to track and start adding metrics that you want to compare to a list or spreadsheet.
What is competitive product analysis?
Competitive analysis is a research process where you evaluate your competitors and how they compare to your business. It can be used as a benchmark that helps determine where you stand in relation to other competing companies. When you are already active in a market, it involves finding out who your direct competitors are, their influence on your sales channels, and whether there is a shift in the market trend. The information from a competing product analysis is key for you to keep up with a competitive strategy.
Competitive Analysis Metrics
There's a ton of information about your online competitors available, but what metrics are helpful to monitor to stay ahead of competitors? Let's have a look at 3 useful competitive analysis metrics for eCommerce brands.
1. Selling Prices
Tracking competitor selling prices can help you determine:
- Which market segments your competitors are targeting;
- What pricing strategy they are using;
- How rapidly the prices of each competing brand are changing?– A stable price often shows a product to be successful and vice versa.
Base your pricing decisions on this context, such as choosing products that fit unsaturated segments. The image on the right shows the average selling price over time of waste bin products of competing brands.
You may want your prices to be relatively close to your competition, as too high or low will affect sales. By always having your prices at rock-bottom prices, you’ll reduce your profit, and customers may perceive your product as low quality.
Brand and value proposition
Choose a pricing strategy that aligns with your brand and value proposition. Who are your competitors, and how do you want to be ‘seen’ against them? Who is your customer target group, and how much are they willing to pay? For instance, some customers value brand personality, convenience or speed of shopping online more than the price.
You need to decide whether you want to focus on quantity or quality. When selling high quality or luxury products, your pricing should likely be higher to communicate the value you provide. In contrast, you need to keep your margins low to get as many people on board as possible with other products.
Change prices over time
You can choose to extract more margin on fast-selling products or lower prices when sales are slow. Keep in mind that it’s more challenging to raise prices than reducing them. Offering time-based discounts, and communicate the discount period clearly, is another way to ‘play’ with prices. Another strategy is bundling products into single-SKU offerings, which is at the same time a method to differentiate from the competition.
In any case, identify which margins are needed for which products to remain profitable, stay competitive and hit your financial objectives. Tracking competitor selling prices can help make that task easier.
2. Product Content & Reviews
Unique, fresh, and rich product page content positively affects search rankings, sales, and engagement and lowers returns. Optimal online merchandising is essential for your brand to be competitive. Benchmark product descriptions, images and videos with competitors to determine where to focus your efforts.
Do your rivals' products have a decent amount of reviews? If not, you can set up a targeted review campaign for your products to gain reviews and a competitive advantage.
What are people saying about your competitors' products online? ISupposeyour competitor products do have a decent amount of reviews. In that case, you can use customer feedback to get an impression of the quality of the product, the favourite features that buyers like about your competitors and improve your products.
3. Retail Share of Search
If you know for which keywords, organic or paid, your competitors show up in site search results or not, you can create your campaigns and manage retail SEO in a more targeted way. Adding keyword-optimised text is the go-to strategy for improving product page placement. The closer your product titles and descriptions come to matching your brand keywords, the higher your product will appear in the search results.
If your competitor has not focused on keywords of a specific group of products yet, you can be the first mover.
Do not make a mistake to use and target specific keywords without knowing if the product's price is competitive or not. This may create traffic that notices your products but ends up buying your competitor’s.
Retail search monitoring tools such as SiteLucent can help you determine which brands' products you are competing with (top 3 positions) on page 1 of the eCommerce search results (typically the first 24 results) for your most important keywords.
Competitive Intelligence Tools
You could gather competitor information by surfing the internet and visit the websites you want to monitor manually. However, collecting and reporting all this information by hand is a hassle and a very time-consuming job. In addition, given that you have to do it regularly to spot trends and developments over time, it might as well be unfeasible.
Using professional tools that daily track product detail pages of competing brands make competitive analysis more manageable and efficient.
Moreover, monitoring tools can translate data into reports and speed up decision-making by giving you the necessary insights. This process is what we call competitive intelligence.
Competitor monitoring and analytics tools uncover powerful insights for your brands and enable you to take control and stay ahead in the challenging world of eCommerce.