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The e-commerce industry is one of the most competitive industries in the world. Numerous successful startups joined the industry in 2022 (Figure 1), growing the industry even more. More startups mean more competition to keep existing businesses on their toes.
As the market becomes more competitive, it can be challenging for businesses to stay ahead of the curve and remain attractive to customers. That is where competitive intelligence (CI) comes into play. CI is the collection and analysis of information from competitors in the same industry to improve a company’s decision-making and strategic planning.
To help business leverage effective competitive intelligence in their businesses, this article explores:
- What competitive intelligence is
- The benefits it provides to e-commerce businesses
- Top 5 best practices to achieve competitive intelligence
Figure 1. E-commerce startup ecosystem growth
What is Competitive Intelligence?
Competitive intelligence (CI) is a process that involves gathering, analyzing, and using data regarding the market, competitors, and customers to gain a competitive advantage. The goal of CI is to identify opportunities and potential threats that can impact the business. In e-commerce, CI is crucial because it helps businesses:
- Stay ahead of their competitors
- Identify market trends
- Optimize their strategies for success
5 benefits of competitive intelligence for e-commerce businesses
This section highlights the key benefits an e-commerce business can achieve from effective competitive intelligence.
1. Identify market trends and opportunities
Competitive intelligence helps e-commerce businesses stay up-to-date with the latest trends in their industry, including new product offerings and pricing strategies. For instance, Amazon1 identified the increasing popularity of electronic devices and other products, which led the company to invest in developing its own line of electronics, such as the Amazon Echo, Fire TV, and other products.
Now they have a diverse range of products:
2. Optimize pricing and promotions
Pricing is one of the main reasons why customers abandon shopping carts during checkout (Figure 2). If there are cheaper options available, the customer will not wait before switching to them.
Therefore, e-commerce businesses need to monitor their competitors’ prices to stay on top of the game.
CI allows e-commerce businesses to stay competitive in their pricing and promotional strategies. For instance, an online retailer can use CI to monitor its competitors’ prices and offer lower prices for the same products to attract more customers.
Figure 2. Top reasons why customers abandon shopping carts during checkout (2022 study)
3. Improve product offerings and customer experience
Knowing what your customers want is essential in beating your competitors. CI provides insights into customer preferences and expectations, which helps e-commerce businesses tailor their product offerings and customer experience.
For instance, If your customers value faster deliveries and easy returns, you can focus your efforts on improving them to get a competitive edge.
Watch how a DIY leader in France improved its offerings and pricing strategy through competitive intelligence:
4. Enhance marketing strategies
Competitive intelligence also allows e-commerce businesses to understand their competitors’ marketing strategies and identify areas for improvement in their own strategies.
For instance, an online fashion retailer can leverage competitor intelligence to analyze its competitors’ social media presence and launch its own social media campaign to competitive edge.
5. Forecast potential threats
Preparing for the future will make your business more resilient than your competitors. CI helps e-commerce businesses prepare for potential threats, such as changes in regulations or disruptive technologies.
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An AI-powered solution can help you implement effective competitive intelligence in your e-commerce business. BrightData offers an AI-powered web data platform to help e-commerce businesses stay ahead of the curve. The platform offers:
- Data analytics of multiple competitors
- Track competitor pricing for their products and services
- Monitor competitor product catalogs to help you improve yours
- Monitor consumer sentiment toward your brand
5 Ways to Achieve Competitive Intelligence in E-commerce
This section highlights some of the best practices that can help e-commerce businesses leverage competitive intelligence
1. Monitor competitors’ websites
A recent study on the American market identified that website-related issues are among the main causes of shoppers not purchasing from a brand (Figure 3). If your website is faulty or too complicated, customers will likely close the tab.
One way to achieve competitive intelligence is by regularly monitoring competitors’ websites for changes in pricing, product offerings, and promotional strategies.
For example, an online store can use an e-commerce analytics tool to monitor a competitor’s website for changes and receive alerts when updates occur.
Figure 3. Main reasons why customers give up online shopping in the US
2. Analyze social media activity
You can also achieve competitive intelligence through social media monitoring. A smart tool with social media monitoring features can provide valuable insights into competitors’ marketing strategies. It can also show how the competitors are engaging with their customers on platforms such as Facebook, Instagram, etc.
For instance, an e-commerce business can use social media monitoring tools to track competitors’ social media activity and analyze their followers’ demographics and preferences.
3. Conduct customer surveys
Conducting customer surveys can provide insights into competitors’ strengths and weaknesses from the perspective of the customers, helping a business to develop a more effective competitive strategy.
An e-commerce business can conduct surveys to gather feedback on its competitors’:
- products and services
- pricing strategies
- customer experience
4. Attend industry events
Attending industry events provides opportunities for business leaders to network with competitors and learn about their strategies and product offerings.
For instance, attending industry-specific trade shows, conferences, and webinars can help gather insights into the developments and trends of the sector.
5. Hire a customer intelligence professional or dedicate a team
Some businesses have hundreds of competitors, if not thousands. Hiring a competitive intelligence professional or a dedicated team can provide such organizations with expert insights and strategies.
A CI professional can analyze market trends and provide recommendations for pricing, product offerings, and marketing strategies.
Further reading
References
- Creswell, J. (June 23, 2018). “How Amazon Steers Shoppers to Its Own Products.” The New York Times. (Accessed: March 03, 2023)
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