Three easy ways to keep an eye on competitors
Internet Retailing contributor Chloë Thomas explains why retailers should research their competitors and provides a step-by-step guide on how to do it.
Whatever you’re selling and whoever your target market is – you have competitors, and it’s useful to understand a bit about them. By better understanding them you can position your business to stand out and fast track your marketing activity.
Before diving in and obsessing you need to work out who your competition are, what sort of competitor each is, and what you want to learn.
Who are your competitors?
For the online retailer competitors come in many guises.
• Direct competitors: the businesses that sell through the same channels as you (website, marketplaces, retail stores etc.) and sell the same products, often to a similar target market. It’s really important to know what these competitors are up to.
• Indirect competitors: those who sell your type of product via different channels, or to a different target market. If you’re an online pureplay – this might be Amazon sellers, or the high street retailers.
• Substitute competitors: businesses that sell a totally different product that satisfies the same need for your target market. This is most prevalent in food and gift categories. For example if you sell wine as an anniversary gift, this would include those who sell chocolate as an anniversary gift.
Before you can start analysing you need to understand which businesses are your competitors, and what sort of competitors they are, so you work out how much research you should be doing on them, and how frequently.
• Direct competitors are the most important to keep an eye on because they have a direct impact on your business.
• Indirect competitors should be researched to see if there’s anything you can learn from them to make your business better. So your research doesn’t need to be as involved.
• Substitute competitors are usually the least important, so get the least (if any) research time spent on them.
Make sure you spend your research time and effort in the right place, after all if you closely monitored all of the competition, all of the time you’d never do any marketing!
What you should understand about them
As well as being clear on who you need to keep the closest eye on, you also need to be clear as to what you’re trying to learn. Broadly it falls into 3 categories:
• Positive proactive lessons: knowledge that will help you push your business forward, e.g. they’re all investing a lot of time and effort in Twitter and you’re not using it yet!
• Negative reactive lessons: knowledge that forces you to change your plans because they’ve taken an unexpected step, e.g. they’ve just made all orders Free P&P, or they’ve announced a weekend of 20 per cent off everything the day before you were going to announce your new collection.
• That’s interesting: knowledge that you can’t do anything with, but is interesting to know, and often makes you feel quite smug, e.g. they’re also busy on Facebook, but your posts get MUCH more interaction.
Generally with competitor research you can’t set out to find just one type of lesson, instead you’re going to come across all three. As you find each nugget of information consider what time of lesson it is and treat it accordingly.
How to find out what the competition is up to
There are many, many, many ways you can monitor and research your competitors. Below I’m outlining three that are pretty easy to do, free to do, and should give you knowledge that helps you push your business forward, as well as making sure you don’t fall into any traps.
1. What’s happening on their website – quarterly checks on all competitors
There are a number of online tools that will give you a breakdown of what’s happening on competitors’ websites. Details such as traffic volumes, locations of customers, and traffic sources.
My personal favourite is Similar Web which gives you a lot of information for free (you can pay for more info) including:
• Traffic volumes per month
• Engagement levels including bounce rate
• Key traffic sources – great for seeing if there’s an important marketing method you’re missing
• What their audience are interested in, and the other sites the visitors have visited
• The sites people were on before, and after their visit
• Whether search traffic is paid or organic, and the top keywords
• Where social traffic is coming from
When using any of these services be careful when judging the competition against yourself to use a report about your site from the same source so you are comparing apples with apples.
2. Benchmarking within key software programs – this will highlight a mix of your competitors
Many of the software programs you use day to day to market your business enable you to directly benchmark individual parts of your marketing activity against competitors.
The two I find most useful are Google Adwords and Facebook Page Insights.
Google Adwords Auction Insights
Navigate to a list of keywords at account, campaign, or Adgroup level. Then click on the “Details” drop down and select either:
• Selected: just see what the competitors are up to for the keywords you’ve chosen
• All: see what the competition are up to for all keywords listed
You’ll then get a report that shows you who else is bidding on those words (Google chooses the competition not you), and how their performance is comparing to yours.
The key numbers to look at here are:
• Impression share: whose ads are being seen the most
• Average position: roughly equates to who’s getting the most traffic
The rest of the columns are different ways to compare your performances.
If someone’s getting more visibility and more traffic than you, then is it because their ads are better? Or because they’re paying more?
Facebook Page Insights
Go to your Facebook Page, Click on “Insights” then scroll to the bottom of the page.
Here you’ll find the “Pages to Watch” section where you can add anyone else’s page that you like, and see their likes, posts, and engagement numbers contrasted against your own.
3. Watch – this is for direct competitors only
This is really only an option for your direct competitors because it does take quite a bit of time, and it also produces a lot of information to sift through on a regular basis.
It involves watching everything they do, so you’ll need to:
• Sign up to their emails
• Become a buyer (ideally be two ‘customers’ on their system – a buyer and an enquirer)
• Follow all their social media accounts, and regularly look at what they’re doing
• If they have physical stores – visit every now and then
• Visit the website at least once a week
• Set up Google Alerts for their brand names
And test out their systems too – so buy from them about once a quarter and occasionally return an item to see how that all works too.
What are you looking for with all this research?
For things they’re doing that appear to be successful that you’re not. If they keep doing something over and over again you should assume that it’s working for them – so if their Google Adwords traffic keeps growing you have to assume it’s effective.
Look out for the following things being repeated:
• Marketing methods
• Marketing messages: both promotions and softer messaging
• Products: if they keep putting the same product front and centre it’s probably a best seller
Simply identifying your competition and working out what sort of competitor each is will help you grow your business. Then using one or more of these analysis methods will help you find ways to grow faster than the competition by learning from them.
Chloë Thomas is a bestselling author and host of the eCommerce MasterPlan Podcast. You can find out more about competitor analysis in her recent book Customer Persuasion: How to Influence your customers to buy more and why an ethical approach will always win.