Running an online store is tough if you don’t know anything about your competitors. Competitive research requires you to do your due diligence on competing stores in your space. As a result, you learn more about the techniques that work and, in some cases, don’t work.
But competitive research is more than that. It gives you the ability to understand how to differentiate your online store. It also helps you undercut the competition and grab some market share.
Let’s take a look at some practical examples of how competitive research drives a stronger business model.
STEP 1: Understanding your audience.
If you’re just getting started in online retail, one of the most crucial parts of setting yourself up for success is understanding the motivations of your audience. Well-established businesses in your space have already done the research required to appeal to your audience.
Looking at successful companies gives you an idea of what strategies can best engage your audience, driving more traffic and more sales to your store. Examine the feel of the copy. Check out the visual cues. Everything you observe on a successful competitor’s website represents a calculated effort to appeal to their target audience.
Step 2: Mapping out the market.
In the beginning, you must understand market saturation. Are there already a host of businesses in your market with the same offerings you plan to build into your store?
Competition is a good thing. If you want to be the best, though, you’ll need to fill holes in the market. If there are no holes in the market, you may need to question your choice of niche.
Step 3: Stealing ideas.
Within ethical boundaries, of course. Looking back to understanding your audience, you’ll find strategies that work through successful competitors. You can take the strong tactics and filter out the weak ones to create a refined shopping experience for potential customers.
But don’t take idea theft to the extreme. Great online businesses are born of unique approaches. It’s still important to do things differently. Significant differentiators should be your focus; proven strategies should uphold these differentiators.
Step 4: Undercutting prices.
Savvy online shoppers are looking for a deal. When you get ready to plan promotion strategies, you’ll want to make sure your low prices aren’t overlapping with the competition. Again, this is a big part of differentiation.
By keeping a keen, up-to-date eye on your competitors’ pricing, you gain the ability to offer products at prices below the norm, drawing shoppers to your store.