15 Critical Steps In eCommerce Competitor Analysis

Whether you’re an established brand that’s constantly having to navigate the shifting tides of eCommerce success or a new brand that’s trying to get a hold of the market share, a competitive analysis is indispensable. 

However, no matter how much SWOT analysis you do, there are certain nuances that dictate if your analysis will help you create solid action items. 

We bring to you 15 of the **most critical** ones that can make or break your go-to-market strategies. 

How To Run eCommerce Competitive Analysis: 15 Overlooked Aspects

1. Focus more on direct competitors 

Veering away from textbook advice where indirect competitors are given as much importance, you need to fixate on fellow brands that target the same audiences that you do. 

Since they most likely sell products close to yours, maintain similar packaging hygiene (especially if there’s no price difference) and tend to leave similar parts of the market underserved, you have a huge potential here. 

To assess what, direct competitors are doing strategy-wise:

✔ Use tools that can track your direct competition’s historical pricing data - since trends in the future are largely dependent on patterns from the past, this can be the key for you to understand how, when and why they increase or lower their prices (and earn a profit as a result!)

✔ Run an audit through their customer comments & reviews - interestingly, this can also reveal what they might not be doing that well in terms of shipping speed, ease in returns & exchanges and even delays getting back on customer queries

✔ Check on how they are customizing their brand experience - for example, do they offer a fast checkout option on the product page itself? Or do they use a single homepage video that, in one shot, explains to first-time visitors what the brand is about w/o having to go through the entire site?

✔ Do a round-up of all the different aspects that feature in their targeting - look at age group(s), income differences, gender differences and touchpoints across selling / marketing efforts

If we take the examples of Kylie Cosmetics and Fenty Beauty who are direct competitors in the makeup category, we’ll see that they both target young women - however, there’s a reason Fenty Beauty has far outnumbered Kylie Cosmetics in terms of revenue. 

While the first stands at $1.2 billion, the second clocks $17 billion (despite being more expensive - and the secret sauce is the “inclusivity & diversity” orientation of the brand, which doesn’t just stop at marketing but also how they create newer shades under the same product to cater to more skin tones:

Pro Tip: Shift your analytical gaze towards indirect competitors if your near-future business goal is one of the following:

- Exploring a new market / market segment

- Launching a new product / product variant 

2. Analyze competition not just by type but also presence

In eCommerce, it’s easy to get stuck with who your direct or indirect competitors are, or even how large or small they are - but the key is to also look at the market presence each one holds. 

Here are a few questions to help you drill down into the market share of each relevant competitor:

❓Which brands fall into a “niche”? (if you own a makeup brand, you may want to look at niches that are picking up like “cruelty free,” hybrid men’s makeup” and “pregnancy safe makeup” while doing your overall competitive analysis)

❓Which brands are “strong contenders”? (they may share a similar vision & values, or they could be marketing their products in a way that would suit your product line / target audience type)

❓Which brands come with a “legacy”? (for example, if you compare Seventh Generation tissues that came into being in 1988 with Charmin that was established in 1928, the latter would fall under a legacy brand - such brands have progressively earned customer trust and tend to hold a massive market presence)

❓Which brands are “top performers”? (interestingly, top performers may not have a massive market presence because they’re relatively newer entrants but their customer acquisition game is on-point with a strong marketing strategy)

Furthe Reading: Marketing Lessons from 10 Great DTC Brands

3. Identify what competitors aren’t featuring as USP

It’s likely that you have already figured out a USP. 

But if the conversions aren’t coming in, it could well mean that your USP isn’t powerful enough for shoppers to see a difference between your offerings and that of your competition. 

This is why it becomes necessary to look at what they’re not featuring as their USP - an analysis that can help you strengthen your existing USP or carve out a secondary one that’ll still pull in shoppers:

✔ Assess product benefits they’re not highlighting (for example, if you’re into selling nutritional supplements, you may find that a competitor is highlighting gut health benefits and cardiovascular advantages for their bestselling immunity blend, but not mentioning how each of the ingredients are tied to individual benefits)

✔ Compare what they’re highlighting and what customers are still complaining about (a competitor could be highlighting the ease of use of a product but in the reviews you may find people talking about how the packaging was difficult to remove or that the product had a negative effect on the skin)

✔ Research on changing consumer preferences (along with your efforts to understand the current circumstances around competitor USPs, the only way to sometimes trump them is to see how consumer preferences are changing - for example, there was a time shoppers would be happy with lightweight, sustainable shoes but now they also want to know what carbon footprint each pair leaves behind)

A good case in point is Wayfair, a home-centric brand that has numerous well-known competitors including Ikea, Home Depot and Macy’s - but where Wayfair trumps despite not having an actual physical store is the sheer number of products they feature in each product segment (this also ensures their dropshipping model is a huge success, which none of its competitors are able to offer and leverage):

4. Figure the *why* behind certain products selling well

The popular saying that goes like “20% of a brand’s products bring in 80% of the sales” is staunch reality. 

When you’re doing an eCommerce competitive analysis, it’s absolutely crucial that you get behind best selling products that are helping competitors score. 

Here are a few important areas to look at:

❓Are they positioning these products differently? (are they talking about subscription advantages in their paid ads? Are they recommending these on high intent pages along with review snippets?)

❓What benefits are shoppers talking about the most? (in conjunction with what the brand is saying about its bestsellers, also look at what shoppers are echoing about them across reviews, social media comments and even comments to blog articles)

❓What sort of differentiated messaging do these products carry? (do they carry image labels talking about specific certifications or awards? Do they carry urgency prompts like “500 sold in the last month” or “Last 5 pieces”?)

❓What sort of “value” do these products promise? (how are they pricing these and using discounts on them? Are they using pricing tiers around the year or is this strategy seasonal?)

❓What strategies does the competitor employ to sell this product more? (are they using more retargeting efforts when shoppers browse / add to cart but don’t buy? Are they using strategies like influencer marketing to connect with a wider audience base to possibly convert?)

If we take Allbirds as an example, we may remember that in their early days they tried to match up to brands like Reebok & Adidas to create snazzier sneakers using the youth as their target audience—however with deeper research and alignment with market trends, the brand realized they would just have to continue doing what they were doing, only better. 

This enabled them to go back to focusing on their core product, the original wool runner, which they relaunched with a “zero carbon footprint” as The Wool Runner 2:

Further Reading: 17 Elements all High-Performing Product Pages have in common (Updated for 2024)

5. Set benchmarks for your own products

This brings us to the next step: 

Assess your own products ground-up to discover what you’re doing right / better than competitors—either in terms of the process that’s behind the manufacturing, the products’ positioning or even the pricing. 

In fact, we’d say, this needs to run alongside what and how you analyze products from competitor brands. 

To get your benchmarks right, here are a few metrics that can help:

💡Product activation rate: This is a metric that can come to use both for assessing engagement & purchases - this product benchmarking metric may be more critically important for slightly complex purchase or product-use paths such as subscriptions, following a set of instructions to set the product running - tracking the activation event becomes necessary, which can be shoppers opting for subscriptions over a 6 month period - sending post-purchase feedback surveys can be beneficial in gathering data

💡Product stickiness: This is a culmination of three crucial metrics including Engagement Rate, Repeat Purchase Rate (RPR) and Retention Rate: 

• Engagement Rate: This can help you track the pre-purchase journey of shoppers for a particular product - how many times they came back to browse, how many times it was added to cart (but not necessarily purchased) and how many times the product page got shared 
• Repeat Purchase Rate: Given that this metric helps you understand audiences that make more than one product purchase within a given window, it’s critical - however, see to it that your assessment covers various segments, the lifecycle of each product and the impact of discounts & offers 
• Retention Rate: While assessing this metric more closely, you may want to look more closely at behaviors across the different segments that buy a product - how frequently the return to buy, how frequently they renew their subscriptions and how the buying lifecycle changes with each sub-group

6. Evaluate what creates repeat customers for competitors

For the average eCommerce business, up to 30% sales come from repeat customers. 

So, during a competitive analysis, this is a nuance you have to look at and make changes to your own customer retention strategy if necessary. 

Here’s what you need to take a closer look at:

👁 Monitor the loyalty programs run by competitors: For example, does a competitor loyalty program reward shoppers also for performing non-transactional actions like referring X number of friends, keeping their profile refreshed or joining the email list? Or do they give certain discounts or offers when shoppers accumulate a certain threshold of spending points?

👁 Notice what kinds of personalization they feature: Do they display different content for different locations? Do they help members create wishlists differently from regular users? (This is something you can find out by signing up as a member and creating an account)

👁 Audit how well they engage across their social media accounts: Do they comment soon enough when customers pose questions about products / use of products? Are they receptive when social media comments aren’t flattering or talk about a customer concern?

👁 Review what kind of post-purchase emails they send: Do they balance out their offer / launch emails with non-transactional content like how-to emails? Do they send replenishment emails just in time for shoppers to click and buy without further delay?

👁 Audit how well their customer support function works: For example, do they feature FAQ for every separate product and also maintain a distinct FAQ page that takes on brand-related questions on returns, exchanges, international orders etc.? If they’re not operational 24/7, do they make it clear what their usual business hours are and are they available during those hours?

Take eCommerce brand Birchbox’s example - it’s easy to think the brand was able to hit its 5-year goal within 7 months of launching in 2010, but that’d be untrue. There are several other things the brand does to make repeat customers out of their one-time buyers:

❖ Multiple membership options (that’s right, the brand goes easy on loyalty by giving customers the freedom to choose from 1-month, 3-month and 12-month membership windows, with a price advantage for the longer the duration is)

❖ Freedom to change, upgrade or downgrade (based on personal experience and circumstances, existing customers decide which plan would work best for them w/o the brand insisting any other way)

❖ Helps experiment with new products (whether the shopper builds a beauty box or lets the brand customize it, they feature new products every month that shoppers may be hesitant in trying otherwise, but because it comes with a box, most don’t mind)

Further Reading: 26 Brilliant Ways To Boost eCommerce Repeat Sales

7. Look at pricing strategy from multiple angles

While studying your eCommerce competition for their pricing strategies, it’s easy to get caught in the miasma of only price comparisons. 

However, the key is to look at a pricing strategy from different angles: 

✔ Check on the market trends (this can be especially critical if you’re launching a new product in the market or are considering giving some of your bestsellers a heavy-duty upgrade + charging more - the market trends will tell you if what you or your competitors’ pricing is the most effective that can be - often trends like downturns and sudden inflations can impact the overall effectiveness of a pricing structure)

✔ Notice how the target audience(s) are responding (access reviews, customer comments on social media and even open discussions on Reddit & Quora threads will tell you if a competitor’s pricing structure on track - caveat: if you find them changing their prices very often, it’s likely they’re responding to price sensitivities from buyers, the market etc.)

✔ Observe the effect of promotional offers on pricing (check how often they run promotions, if pricing fluctuates within the promotional window(s) and how the brand’s market share goes up / comes down before & after promotions)

eCommerce success story Warby Parker is a great example of a pricing strategy that turned market trends on their head—when they launched in 2010, the average pair of eyeglasses cost anywhere between $300 and 400, but seeing that there was a huge demand gap for less expensive prescription glasses, Warby Parker began to offer theirs at $95: 

8. Keep shopper likes & dislikes centrestage

We’ve covered some ground on how shoppers react to competitor products and pricing across pts. 1, 3, 4, 6 and 7 but there’s more. 

eCommerce brands that bring home serious conversions get much more right than product quality + pricing—to keep shopper preferences central in your eCommerce competitor analysis, look at:

⚑ Engagement metrics (audit likes, shares and comments across an X-month timeline to see what kind of competitor posts are getting engagement - those with huge engagement may have been run as ads earlier, which makes it worthwhile to see the messaging and what it addresses)

⚑ Third-party review sites (go over review platforms like Trustpilot and Google, and if you run a local business, then Yelp as well - even third party marketplaces feature more unbiased reviews across target segments and platforms like Reddit see conversation threads between shoppers who’ve bought the same product)

⚑ Social listening tools (tools like Brandwatch can get you data from across a number of sources including news sites and forums to offer a comprehensive view of what competitor audiences are talking about in terms of pain points, hashtags they’re using often etc.)

This can especially be a worthwhile exercise for brands that are in niche spaces and where potential shoppers are constantly looking at unbiased sources of information to review their purchase decisions - here’s a Reddit thread we found on eCommerce playkit brand Lovevery:

Further reading: 15 Ways To Get The Most Out Of Social Proof (eCommerce)

9. Pick the most relevant digital data to track

Whether this is the first time you’re running an eCommerce competition analysis or you’re a veteran, consider data from the most high impact areas. 

Here are a few we’ve repeatedly seen make clients’ analysis efforts reap results:

⚑ Ad campaigns: From ad placement to ad formats, data from ad campaigns can offer you a peek into how competitor brands are positioning themselves at brand and product level - get into ad libraries to track both active and historical campaigns and alongside them, key messaging, target audiences etc. - assessing ad frequency and timing also becomes important

⚑ Email campaigns: One of the easiest ways to do this is to actually sign up for emails across your top 5 competitors and evaluate their messaging, offers, subject lines and send times - review

⚑ Market research reports: These are often the right resources to get analytical data on brand perception, evolving market share based on that perception etc. - to get more insights, create your own brand perception surveys and include a few questions on competitor brands (include questions on website UX, customer support, returns etc. to build a comprehensive picture)

Don't forget to check out: Finding The Right Target Audience In eCommerce: 16 Proven Strategies

10. Focus on marketing channels customers love the most

Competitive strategy in eCommerce often blends brand visibility and a personalized, targeted touch. 

Let’s take the example of eCommerce brand ASOS—they maintain their brand perception & visibility alive across several channels, the top of which include:

👁 Online storefront: The ASOS website is high on UX and mobile-first optimization to make customers return for both browsing and purchases 

👁 Mobile app: The brand uses its storefronts to draw attention to their mobile app—and also ensures shoppers move to that channel by offering some app-only features!

👁 Email: Though some reviewers have to say that the brand sends too many transactional emails, nobody denies that they keep their email-only shoppers happy with adequate  segmented offers around the year

👁 Instagram: With an influencer and look-heavy marketing strategy on this channel, the brand doesn’t only maintain a main brand account but also a sub-account for the men’s category given its popularity (in 2023, 3.8 million men bought from the brand!)

Here’s how the brand lets their online audiences know how migrating to the app would make a whole lot of difference:

Further reading: 32 Founders Predict eCommerce Marketing Trends (2024)

11. Choose the right metrics to measure

Though lots of sources will erroneously tell you to measure conversion rate, CAC and CLV from competing businesses, in reality, this information is confidential. 

Even then, there are several other competitor metrics that you can try gathering data on—here are some that will help you understand your eCommerce competitors better:

⚑ Website traffic: You may want to use tools like SimilarWeb and Ahrefs for this exercise - the idea is to get a breakdown of the sources to see what part of the traffic is coming in from paid search, organic search and what from direct visits and from across social channels

⚑ UX & mobile optimization: Take help from Google PageSpeed Insights to review competitor load times and mobile optimization - you can also use Hotjar and use it in addition to a CRO tool to check on session recordings, heatmaps etc. 

⚑ Product ratings & reviews: Use ReviewTrackers as a tool to aggregate all competitor reviews on to a single dashboard to evaluate product ratings & feedback from across channels

⚑ Content performance: Consider a tool like BuzzSumo to do a full roundup of competitor content across platforms - pay special attention to trending topics and also leverage the tool to set up alerts on specific keywords so that when a competitor publishes something new, you get to see it and review it

Further reading: 31 eCommerce Metrics and KPIs that Actually Matter

12. Check for thought leadership in content strategy

If some of your competitors’ profit margins have been growing, the chances are huge that their individual content strategies are playing a role in it.

At a time when it’s easy to mistake a great eCommerce content strategy just for the way information looks or sounds, you may want to stop the buck at thought leadership. 

And that’s because eCommerce brands with the most successful content strategies exhibit this quality—here are a few steps that can help you further:

💡Check for content diversity: This would include not just content types but also channels competitors are using to distribute that content - how well are they creating content for the entire customer journey map is also something you’ll have to review - are they covering one stage of the funnel more than others?

💡Check for original research: Do their blogs carry research findings and citations? Do their videos carry statistics and numbers and they ensure to validate the sources in the captions?

💡Check for expert contributions: While some brands stop only at authority-driven social proof, some others actually open up their content channels to experts who can share findings in line with a featured collection or the brand approach as a whole - which of your competitors are doing this and how is it impacting their conversions?

eCommerce brand Elvie, which makes wearable breast pumps, is a great example when it comes to thought leadership in content—the brand’s most recent marketing campaign was actually based on the findings from a survey that featured 1000 women in the US (which is also a research report now):

13. Evaluate gaps in UX & CX

When you’re assessing different kinds of competitive strategy in eCommerce, you’ll have to take a closer look at how competitors do UX & CX, and where you may be trumping their approaches and where you may be losing out. 

In terms of UX, you need to:

✔ Draw out a journey map: What you’d do with your own website is what you do with theirs to see what the typical flow for a user is, where they’re nudged towards if they’re absolutely new on the site and what rewards they’re promised if they take certain actions over others (feel free to do this for their mobile apps too if you have one as well!)

✔ Pay attention to micro-interactions: Think of the add-to-cart button changing text when you click it to “Added to cart” and confetti showering when you unlock a lucky one-off on-site discount - if your competitors are designing their micro-interactions well, chances are they’re getting the conversions too

✔ Do some persona-based testing: This can be key in finding out granular details of what’s working and not working in terms of UX on competitor sites (and apps) - this is also a great way of finding out if the businesses are doing enough to personalize, offer differentiated information and help customers make their way across the funnel

In terms of CX, you need to:

✔ Assess from a mystery shopper’s lens: Pay special attention to how your eCommerce competition is optimizing their customer support across the funnel, through chat and even email - this will also help you review the post-purchase they’re creating for their shoppers

✔ Focus on their multi-channel experience: Do they ensure your cart items appear across the website, mobile site and even app? Does customer support pick up from wherever you last left or ask for the same data time and again?

✔ Refer to popular CX benchmarking reports: Check out CX resources by Gartner’s and Forrester’s to review how your eCommerce competitors are performing against industry standards 

Pro Tip: Pay special attention to how your high-intent pages are faring against those of your competition—What are they doing consistently right? What have they improved recently? How do they organize their UX during peak holiday shopping?

Further reading: The Founder's Guide to Customer Journey Map (eCommerce)

14. Check how they integrate their site with social channels

This is a crucial task when you’re studying eCommerce competitors because it has a direct impact on website traffic and as a result, on conversions too. 

Here are a few things you’ll need to look at:

👁 Do they have a social wall? And do they use this wall to make the posts shoppable or does it just represent a random collage of follower posts?

👁 How prominent are their social share buttons? Many eCommerce brands, after all, hide away their social share buttons in the footer - but in our experience, brands that showcase their share buttons higher up either in the header or around the product page CTA button, receive better visibility & traction

👁 Do they use #hashtags on their website? This is a great way to do a back-and-forth between website and socials, because hashtags convey an idea / event / launch instantly - exactly what eCommerce cookware brand Misen leverages on their website, taking website visitors to their Instagram handle, where they feature select UGC content:

15. Find out SEO gaps in organic & paid search

Thanks to all the Google updates, big and small, now’s when eCommerce brands have to work harder than ever to stay relevant AND interesting. 

And this is why your competitive strategy around organic & paid SEO have to be super effective. 

Here are a few steps to include in your eCommerce competitor analysis:

🔍 Search for high-value keywords competitors are using: Also check where on the website they’re strewn - typically, product descriptions, blogs and category page text banners carry high-value keywords

🔍 Make a “high-value, low-difficulty” compilation: Apart from noticing which of the high-value keywords you’re not ranking for, also search for those that would pose a lower difficulty for you to rank

🔍 Review high traffic pages for keyword usage: This would include the homepage, the category pages and the product pages - the best keyword usage is often subtle, so do a top-down scroll audit - for paid ads, ensure to repeat this exercise across landing pages

Pro Tip: From the assessment, find ways to double down on your local SEO strategy - take a look at how complete local business listings are in terms of information and what kind of high-value keywords they’re using and ranking for.

Further reading: Convert More Paid Traffic—9 Strategies That Always Work (eCommerce)

eCommerce businesses also ask:

1. How to monitor competitors’ website traffic?

There are several steps you can take to monitor your competitors’ website traffic as part of your competitive analysis:

- Use a traffic estimation tool: Something like Ahrefs or SimilarWeb can help you get data on total traffic, user engagement metrics, top performing pages etc. 

- Get a sense of their traffic sources: This will tell you which of their marketing & sales channels are doing well and why - it may also help you find newer opportunities across channels you haven’t considered before

- Find data on user engagement metrics: Focus on metrics like average session duration and pages per visit to see how a competitor’s visitors are behaving, preferring and how they’re spending time during a session

- Track social media activity: Check which posts lead back to the website - their messaging, if they’re also displayed as ads etc. 

2. How to do SWOT analysis for your eCommerce website?

A SWOT analysis for your eCommerce website can offer a comprehensive view of what you’re doing right and what you’re not in terms of a competitive strategy. What it also does is help you discover opportunities and threats that you can leverage and negotiate to keep the conversions rolling. 

S-Strengths: What is it that you’re definitely doing better than your competitors? Is that you ship fast or offer superb personalization for every one of your customer segments?

Knowing your own strengths can help you build on them and also find out related areas that you can leverage (for example, if you’re known for a friendly returns policy, see if you can also offer free shipping in some form.)

W-Weaknesses: What is that your competitors are definitely doing better than you? Is their customer support more reliable? Do they pitch offers that are super-targeted? 

Knowing your weaknesses in relation to your competitors’ strengths is gold—it helps you to discover gaps, which in others words is 👇

O-Opportunities: This represents the areas that you can potentially have a first-mover advantage on—be it in terms of tech, marketing campaigns or even content strategy. 

Even if it’s not big, it could simply be something more aligned with what your shoppers expect—for example, they may want to see clickable buttons on FAQ when they land up on your live chat. 

T-Threats: These are potentially negative market and industry shifts that when not reviewed in time can backfire—a great example could be the arrival of a big aggregate shopping player that makes it difficult for small businesses to survive because of better prices, improved delivery times etc. 

3. What are some mistakes to avoid in eCommerce competitor analysis?

While we’ve covered ground in telling you what you can leverage, here’s where we tell you WHAT NOT TO DO: 

❌ Not paying attention to competitor mistakes: If you’re not paying attention what your closest competitors are doing wrong, you’re likely to repeat them. 

❌ Not focusing on which competitor products are doing well (and why): It’s convenient for most eCommerce brands to engage with other brands at an overall strategy level without getting into the granularities of slow-moving and fast-moving products and the “why” behind. 

❌ Not focusing on the most relevant competitors: It’s likely that you have at least 200 competitors across direct and indirect competition, but if you’re not able to focus on the 10 most important ones, you’ll be missing out on why their target audiences (who’re very similar to yours, btw) are preferring them.

❌ Not having a goal for your eCommerce competitive analysis: Too much data is always a pitfall in a competitive strategy analysis, and to avoid that, you need to have a goal - a goal also helps in better benchmarking and related research. 

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