Many ecommerce business owners have told me that they pay little attention to their competitors. Most said that they did not have time, or that their competitors’ tactics did not matter to them.
But you should regularly monitor your competitors' businesses, for the following reasons.
- Locate new products. They may sell products that you are not aware of.
- Analyze promotions. They may be running aggressive promotions that impact your business.
- Pricing effects. Their pricing strategies may provide you with an opportunity or challenge that you should act on.
- New ideas. You may see new promotional ideas for your business.
- New keywords. Their websites may be a source of keyword ideas for your search-engine-optimization or pay-per-click campaigns.
- Slow-moving products. Their clearance sale items may be products you should avoid.
Do not dwell on your competitors. Spend 30 minutes each week researching their stores and tactics; you will likely learn information to incorporate into your own business.
Research on Google
Put yourself in the mindset of your customer. Open an "incognito" window in Chrome — i.e., private browsing; here are instructions from Chrome. Pick a product in your store and do a Google search on keywords that you think a consumer would use to find it. Be sure to do it incognito so that Google does not skew the results with your personal search history.
- Note who is advertising on that keyword. Is it your direct competitors, Amazon, brand manufacturers, or no one at all? Are they high quality ads? Do they link to relevant landing pages or a home page?
- What do the organic search results look like? Are they local stores? Are you in the top five? Are your competitors? Is the content of the search results relevant to the keywords?
- Are any Product Listing Ads or video links showing up? Those are most likely to be clicked on. So even if you are in the top five, you may have a lower chance of a click.
- Do several searches with different keywords. Pay attention to Google’s suggested keywords. Those are the next most likely keywords that consumers use.
Track these results in a spreadsheet. This can become a baseline analysis to repeat in several weeks or months to see what has changed in your competitive space. You may be surprised at how often you find an unknown competitor.
Go to Competitors' Sites
Next, click from the search results to your competitors' sites. Note where you land in their sites. Is it a product detail page, a landing page, or category list of some type? If it's from a pay-per-click ad, is it consistent with the keyword you used?
Note the content page layout and design. Is it comparable to your own? Is the content unique? What types of images and image features do they have? Note their pricing for products in the category you chose. Put them into a spreadsheet that tracks prices by product for various competitors. What are their shipping policies? Are they promoting cross-sell or up-sell items?
Put a product in the competitor's cart to see if it is doing any promotions or up-sells within the cart. Browse other areas of the store to identify any promotions or seasonal offerings. What new products are they introducing? What items are they trying to get rid of through a clearance or overstock sale?
Note, also, competitors' product variety. Do they have many price points or do they focus on a single pricing level for a given product? What is their breadth and depth for a given product?
Write a short summary of the things you liked and did not like about the experience. Try to stay in the mind of a consumer, not a competitor.
Build a Knowledge Base
None of this has to take much time. You can easily scan several competitors in 30 minutes. By collecting information in a spreadsheet, you begin to build a knowledge base that may be useful in the future.
Over time, you can use tools like Compete and SpyFu to monitor their traffic and what they are investing in through pay-per-click advertising. You can learn which keywords and affiliate sites are sending them traffic in the premium versions of these services.
The point is not to copy your competitors. It's to have your eyes open to trends and tactics that will impact your business. If you suddenly have a drop in your conversions, but no change in your overall traffic, it may mean that a competitor has changed a pricing tactic or is running a promotion that is diverting your sales. You may or may not want to react. But you will sleep better understanding the nature of the problem.