A Guide to Incorporating Competitive Intelligence in Your eCommerce Strategy
As we’re sure you’re already well aware, eCommerce is cutthroat and competitive. To be successful in this volatile space, online retailers must remain vigilant—ever aware of rising trends, technological developments, and threats—and respond appropriately or risk losing their competitive edge. Fortunately, there’s a way to stay ahead of the game: Competitive intelligence.
Analyzing and acting on the information gathered about competitors can help ensure future success. All that intelligence must be used to make smart and strategic moves, positioning a company for continued growth.
In this guide, you’ll learn why eCommerce retailers must achieve competitive intelligence and exactly how to do so. Buckle your seat belts, and let’s get started.
What Is Competitive Intelligence?
A good place to start is with a definition. Competitive intelligence is just what it sounds like: Gathering and analyzing information about competitors and the market to gain insights to inform strategic decision-making. Done right, it gives retailers a clear understanding of their competitors’ products, tactics, marketing strategies, and other activities.
How do businesses uncover all of this valuable information? They peruse websites, monitor the news, read industry reports, conduct customer surveys, and talk to industry insiders, among other methods we’ll discuss below.
Some might question how competitor intelligence differs from traditional market research. Put simply, competitive intelligence focuses on gathering and analyzing information about specific competitors to understand their strategies, strengths, and weaknesses. In contrast, traditional market research is a broader study of the overall market, including customer preferences, trends, and market size, often without a specific emphasis on competitors.
Why Does Competitive Intelligence Matter to eCommerce Business?
Competitive intelligence is a valuable tool in an eCommerce company’s arsenal. Why? It provides immensely useful insights that can be used to shape its marketing strategies, pricing decisions, brand positioning, and more.
Staying Ahead in the Industry With eCommerce Competitive Intelligence
When online retailers systematically gather and analyze data on competitors, market trends, and consumer behavior, they’re better able to:
- Make informed strategic decisions
- Identify emerging market opportunities
- Assess competitor strengths and weaknesses
- Optimize pricing strategies
- Refine product offerings
- Anticipate market shifts and consumer preferences
Ultimately, competitive intelligence empowers companies to proactively innovate, enhance customer experiences, and stay ahead in the fast-paced and ever-evolving eCommerce industry.
Using eCommerce Competitive Intelligence for Strategic Planning
Competitive intelligence plays a key role in strategic planning. For example, a company can learn much about its competitor’s strengths and weaknesses.
That information can then be used to identify market opportunities and might also influence the business’s marketing campaigns and pricing models. After all, to strategize and plan effectively, executives need access to accurate and relevant insights and data—exactly what competitive intelligence offers.
Enhancing Business Performance through eCommerce Competitive Intelligence
Without a doubt, competitive intelligence can dramatically improve a company’s performance. How? Based on the insights gleaned from it, online retailers can effectively optimize their pricing structures, improve their product quality, and tailor their marketing efforts to better resonate with their target audience.
Competitive intelligence also enables eCommerce businesses to identify potential threats and opportunities in the market, allowing them to adapt swiftly to changing conditions and maintain a competitive edge. Ultimately, online retailers can refine their strategies, boost efficiency, and drive growth in an increasingly competitive digital landscape by leveraging the insights gained.
Benefits of Integrating Competitive Intelligence into Your eCommerce Strategy
The eCommerce industry is crowded, competitive, and constantly changing. It’s not easy to stay ahead of everyone else.
Competitive intelligence allows online retailers to identify opportunities and outsmart the competition. Below, we list several other benefits of incorporating it into your business strategy.
Identifying Market Trends
Market trends are patterns or tendencies in a particular industry or market that reflect changes, shifts, or developments in various market aspects. Various factors, including consumer behavior, technological advancements, economic conditions, and societal influences, can drive new trends. With a good competitive intelligence strategy in place, a company can preemptively spot these industry trends and take advantage of them to gain more market share.
Gaining a Competitive Edge
Competitive intelligence sheds light on the competition’s strengths and weaknesses, branding, messaging, and other tactics so a company has everything it needs to create a marketing strategy that sets it apart. It also helps eCommerce retailers gain insights into their rivals’ business operations and customer experience, giving them a competitive advantage to stay ahead of the curve—and their competition.
Product Development and Pricing
A clear picture of the competition’s products and pricing is critical. Achieving competitive intelligence in this area enables online retailers to understand where their products and pricing sit compared to others and make changes accordingly—often accelerating growth potential and directly impacting sales and profitability.
Finally, understanding and analyzing information related to market threats and risks allows companies to proactively identify and mitigate them. This proactive approach can prevent or minimize financial losses, reputational damage, and other negative impacts. For example, a company might use competitive intelligence to obtain insight into a rival’s cybersecurity practices and then use this as a benchmark for its own data protection measures.
How to Incorporate eCommerce Competitive Intelligence into Your Strategic Decisions
Now that we know why competitive intelligence is so important, let’s discuss exactly how to integrate it into your strategic decision-making.
Integration into Planning
Incorporating competitive intelligence into business planning and decision-making often involves multiple steps, which can include:
- Defining objectives
- Identifying key competitors
- Gathering and analyzing data from multiple sources
- Conducting SWOT analysis
- Scenario planning
- Aligning findings with business strategy
- Maintaining continuous updates
- Fostering cross-functional collaboration
- Assessing risks
- Using intelligence in decision-making
- Monitoring and adjusting strategies
- Establishing a feedback loop
- Providing training and tools
- Ensuring ethical compliance
This process allows commerce businesses to make informed decisions, adapt to changing market conditions, and gain a competitive edge in their industries.
Data Collection and Organization
One of the most crucial components of competitive intelligence involves gathering relevant data about competitors. This can include information about their marketing strategies, product offerings, pricing models, social media presence, and more.
This data can be collected from a variety of sources, including:
- Competitor websites
- Case studies (like this Gucci eCommerce case study)
- Industry reports
- Regulatory filings
- Press releases
- News articles
- Social media
- Customer feedback
- Market reports
- Web scraping
- SEO analysis
- Trade shows and conferences
- Financial statements
Companies can collect this information either manually or using automated tools.
Knowing Your Customers
Competitive intelligence can also be used to develop a deeper understanding of your own customers. One way to gain insight in this area is to conduct surveys and focus groups to obtain and analyze customer feedback. Moreover, it’s advisable to try and determine not only how your customers feel about you but also about your direct and indirect competitors—without a doubt, these valuable insights will help your company make more informed decisions.
Setting Objectives and Identifying KPIs
Another important step in the competitive intelligence process involves establishing objectives and KPIs so your online business can measure its progress and identify areas of improvement. Some common customer intelligence KPIs include win rates, revenue growth, customer retention, and customer satisfaction.
When eCommerce stores utilize competitive intelligence to evaluate their competitive landscape and make smarter decisions, this should include monitoring the competition’s personnel changes. When C-suite executives and managers move on, it can signify that change is on the horizon, potentially impacting your competitors' strategies and more.
Keeping tabs on your competitors' performance and pricing is also a good idea because customer buying decisions are massively influenced by price. Consider using price tracking software to monitor and analyze rival prices and adjust yours accordingly.
Monitoring Competitors’ Products and Content
Paying attention to the competition’s products might seem obvious so your company can keep tweaking its own. But don’t overlook checking out your competitors' websites and social media—and the content they post on them, too. This can alert you to new product innovations, hot trends, and changes in your competitor’s strategic direction.
Actionable Insights and Adapting Strategies
After collecting and analyzing this information, which can take weeks (or, ideally, is done continuously), it’s time to translate it into actionable decisions and strategies. To accomplish this, eCommerce companies should make every effort to bring together disparate data sources, add context to their data, and communicate their findings in a relatable and action-oriented way. Ultimately, if this is done successfully, they can adjust their business model, pricing, products, or marketing campaigns based on solid competitive intelligence data.
Best Tools and Resources for Gathering Competitive Intelligence
Fortunately, many different tools and resources are available on the market to help companies with their competitive intelligence. Some have been around for a long time; others are new technologies. Consider briefly reviewing and comparing each competitive intelligence tool, including emerging technologies, to see if any can assist your company.
Some popular competitive intelligence tools include Bright Data, Dealavo, Wiser Solutions, SEMrush, DataWeave, SimilarWeb, Stackline Atlas, Ahrefs, Google Trends, and Bungee Tech.
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How G & Co. Can Help
There’s no denying that eCommerce is fast-moving and volatile, with a bevy of companies constantly vying for your customer’s loyalty (and money). To stay relevant and profitable, online retailers must maintain an edge that differentiates them from the rest. Integrating competitive intelligence into your strategic planning is the best way to stay ahead of the crowd, giving you all the data-driven incentives you need to continue innovating and evolving.
Collecting and crunching all that data can be time-consuming and tedious. Thankfully, G & Co. is ready and willing to take it off your hands. Trusted by numerous Fortune 500 retail leaders like Nike, Saks Fifth Avenue, and Levi Strauss & Co., the team of expert consultants at G & Co. knows how to unlock your business’s true potential via market research, advanced data analytics, and in-depth competitor analysis.
Contact G & Co. and get started today.