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Competitive analysis: how not to waste money on unnecessary improvements

The drop in sales in the online store is influenced by various reasons. The first thing you can usually think about is seasonal fluctuations in demand or an economic crisis. And if you wait a little, then sales will return to their previous level by themselves. But such a strategy often does not bring results: the season has already changed, and the people purchasing power has recovered, and there have been no sales on the website. In this case, most likely the problems lie in the design or functionality of the online store itself. But it is not clear what exactly are the problems. It is also not clear what exactly needs to be improved on the site. You will have to contact the developers and pay for their services. If there is no clear understanding that the improvements will bring profit, then there is a risk of wasting the budget for unnecessary changes. 

When deciding to improve your online store, you should formulate the most detailed list of what suited you in the online store and what not, what needs to be added and what to refuse, even before starting work. The analysis of competitors helps to clarify this. This article describes in detail the algorithm of how to conduct it correctly. Understanding competitors, you can choose a vector for the development of your own online business and more precisely formulate the requirements for design and functions, which will become the basis for the technical task for developers.

Why you need to analyze your competitors

Competitive analysis is conducted in order to learn about the advantages and disadvantages of competitors, to understand which mistakes should be avoided and what to take into service. It helps you position yourself more accurately in your niche and present your online store in an attractive way. 

Thanks to the analysis of competitors, you can:

  • formulate a USP;
  • take into account other people’s mistakes and profitably detach from competitors both in positioning and in design;
  • focus on those traffic sources that bring the most visitors;
  • find out what key queries the competitor is promoting and use this to improve your own catalog; 
  • flexibly manage pricing;
  • learn about non-standard marketing solutions of competitors, loyalty programs, pop-up windows, etc.

What types of competitors are there  

It seems that if you need to find a competitor for analysis, you have to choose an online store that sells exactly the same products as you do. But in reality, the list of competitors is much larger. According to the classification of Philip Kotler, an American economist and marketer, competitors are divided into 4 types. 

Let’s analyze them using the example of an online bike store:

  1. Form competitors. The buyer has a desire to buy a vehicle that he may want to satisfy in some other way. For example, instead of a bicycle, buy a scooter, electric scooter or segway. These are form competitors.
  2. Generic competitors. These include substitute products that satisfy a specific desire. For example, different types of bicycles: off-road, sports, asphalt. 
  3. Industry competitors. These are varieties of the same product. For example, asphalt bikes are categorized as city bikes, hybrids, touring bikes, and folding bikes. 
  4. Brand competitors. These are goods from different manufacturers that can satisfy the final desire of the buyer. In our example, these are bicycles of the same types, but from different manufacturers.

You need to analyze four types of competitors at once in order to get an idea of ​​how other companies cover the pains of the target audience, and find interesting solutions for your niche. But this is not always advisable, so we usually select competitors based on the product matrix of our client and what needs of his target audience he wants to cover.

For example, there is a large online children’s goods store that sells bicycles, scooters, clothes and toys. In this case you need to analyze generic competitors. If an online store has a narrow niche, for example, handmade chocolate, there are few competitors, then it is necessary to analyze form competitors, generic and industry competitors. If an online store is a distributor of a specific manufacturer, brand competitors should be analysed. You need to understand that most often brand and industry competitors are the same online stores, but their catalog has a division by brands and categories.

Where to look for competitors 

So, you have decided what kind of competitors should be analyzed. Then the question arises, where to find them? How to choose specific companies? What sites should you visit? 

There are several sources where you can look for competitors.

1. Select manually in search results 

First, you must enable incognito mode in your browser. This way, search algorithms will not take into account your search history and will show the real position of competitors in the search results. You need to enter the main keyword and select 7-10 online stores from organic (free) search results. Then look at the advertisements: these are our competitors who attract buyers through contextual advertising. There are also 10-12 online stores to choose from. As a result, you will get a list of 20-25 competing websites: both with free and paid traffic. 

If the online store sells in a specific region, then you need to use geo-dependent queries. If there are offices in different cities, use the search for each city, as they may have different competitors.

If there is no task to keep up with giants like Amazon, eBay, AliExpress and the like, it is better to skip them in the search results (and they will most likely take the first places) and analyse online stores similar to you. But in the future, you will still have to analyze large or network sites in order to be aware of where the market is heading.

2. Asking Sales Managers 

The easiest way to find competitors is to ask those who work directly with customers. They always know better which companies are you fighting for customers. 

3. Look in industry ratings 

You need to find the ratings of companies and see who takes the first places there. For narrow niches, such ratings also exist.

4. Use special services

Services that automatically collect competitors help to save time. These are Serpstat, Semrush, Ahrefs,, Spywords, Similarweb, Pixeltools and many others. Services work like this: they analyze the semantic core, compare the search results based on the semantic core, look for intersections of pages and domains in the search results by groups of keywords. 

It is best to use several services at once, as due to automatic competitors search, erroneous results may occur. In sum, there should be at least 20-25 competitors.

How to choose competitors

In order not to waste time analyzing too much, it is important to ask yourself again, is the chosen online store a competitor? Therefore, before including it in the list for analysis, you need to carefully look at its website and pricing policy.

For example, you have selected a competitor from the first page of search results for the necessary keyword. You went to his site, but saw that the layout was “gone” there, it has not been updated since the launch, an old-fashioned template was used, there is no mobile version or adaptive layout. Obviously, your target audience will not buy from such an online store, so you can ignore this competitor and not waste time on it.

It’s the same with prices. For example, you are looking for competitors for an online children’s toys store. The target audience is parents with an average income level. This means that online stores with handmade toys are not suitable as competitors. There the target audience is parents with a high level of income, and when choosing toys, they are guided by completely different reasons.

What we analyse from competitors and why

When the list of competitors for analysis is ready, you need to decide what exactly to analyse on their sites. 

1. Positioning 

These include:

  • distinctive characteristics (for example, 15 years on the market, knives made of Damascus steel, not tested on animals, etc.); 
  • what benefits they offer (for example, contactless delivery, a gift for an order, fitting before payment).

Here it is important to understand what the competitor himself identifies as an advantage. What he thinks influences the user’s buying decision.

For example, your competitor is an online action camera store. You know that all cameras are waterproof. But at the same time, the competitor does not distinguish this characteristic as an advantage, does not indicate it in a large and conspicuous place. Instead, there is information everywhere about how steep the stabilization is and how clearly they shoot in motion. This is what our competitor is broadcasting to its target audience. Based on this information, you can highlight other competitive advantages to more clearly define your USP and differentiate yourself from the competition.

It often happens that the same product is sold in different online stores at approximately the same price and has the same product characteristics. This means that the visitor will make a purchase decision based on other factors: is there post-warranty service, what delivery conditions (paid or free), whether it is possible to pay with bonus points, what delivery times. Depending on what exactly the competitor offers, you can offer free shipping or free post-warranty service for 1 year, give the opportunity to installment plan, and the like.

2. Usability 

The highest quality products and favorable prices do not guarantee sales if the online store is not user-friendly. Usability affects whether a user completes a purchase on that site or leaves to look for another.

On the competitor’s site, you need to go through the main entry pages: the main, spreading catalog page, category pages, main filter pages and its product cards, information pages (about the company, advantages, delivery terms, payment terms). It is best to look at several product cards: one for each product group, as they can be styled differently.

On these pages we look at:

  1. Navigation in the catalog. Whether the buyer can quickly find the desired product. 
  2. Product description. Is it informative and what characteristics are indicated?  
  3. Related or similar products. Is there a recommendation block, how it is located and what products it contains? 
  4. Checkout. Is it easy to place an order, what are the difficulties, what are the payment and delivery methods? 
  5. How to contact managers. Is there a chatbot or a callback, how long does it take for managers to answer and do they advise on the assortment?
  6. Information. Whether the user can immediately find the pages of interest and answers to questions?
  7. Social networks. Are there profiles in social networks, in which social networks and how active the online store is? 

This knowledge helps to adopt successful usability solutions and avoid unsuccessful ones. Sometimes, in the process of analysis, interesting ideas appear on how to increase conversion and retain the target audience in the online store. As a result, you can formulate a list of requirements for the site’s usability and what features you need to add.

3. SEO

You should analyse the semantic core and the competitor’s meta tags. The first will help to improve the directory structure. And according to the competitor’s meta tags, you will understand what kind of masks for Title, Description and H1 are better to use and what keywords to include in them. For SEO-promotion of an online store, you will need to conduct an advanced analysis of competitors in terms of SEO. But that’s a completely different story. 

4. Assortment 

In the assortment you need to pay attention to:

  • total number of goods;
  • it is a mono-brand online store or multi-category;
  • what is in stock and what is on order;
  • how long the buyer has to wait to receive the order;
  • the width and depth of the catalog: how many product categories are presented, what target audience they cover;
  • how a competitor classifies its products (for example, by brand, gender, age, purpose).

Such information helps to understand the scale of the competitor’s activities, which target audience is targeted, where you intersect with him, and where you differ. This will come in handy when modifying the directory structure and filters.

5. Work with customers

It is important to pay attention to what the competitor uses to keep customers on the site and motivate them to buy. This can be: promotions and special offers, an interesting loyalty program, giveaways, reviews, pop-up reminders, and the like. You can adopt interesting ideas from a competitor and test them yourself.

6. Customer Reviews

On a competitor’s website, you need to read reviews for the goods or general reviews about the store. This information is needed to find out what customers have rated positively in the product and the store, or, conversely, what upset them. In the future, it will be possible to adopt successful solutions and work out the objections of buyers in advance.

7. Content

It is necessary to see if there is a blog in the online store itself or on social networks, what they write about there, which publications have received the most reactions (views, reposts, comments). 

Please note:

  1. What texts are published: really useful or SEO-texts?
  2. What visual content is used, is there a video?
  3. How complete is the information on delivery, payment and return?
  4. Whether competitors are using SEO-texts on listings and on the home page?
  5. Are the texts in the product cards unique?
  6. How often content is posted?
  7. Is there an informational section on the site, and how it is linked to the catalog?

After analyzing the content on a competitor’s website, you will begin to roughly understand its sizes and quality. This information is needed for the requirements for page templates and a list of additional elements to be developed.

Analysis of competitors provides a basis for further business development: it identifies problem areas where the online store does not catch up with competitors, and suggests new ideas. Together, this helps to formulate clear requirements for the design and functionality of the online store and not waste the budget for unnecessary improvements.