10 Oct 2017
Any eﬀective competitor monitoring strategy consists of ﬁve core elements. Each essential element plays a vital role in identifying opportunities for competitive advantage, determining potentially untapped markets and supporting the overall business strategy for ambitious retailers regardless of size.
One: Price Monitoring
The meteoric growth of e-commerce, driven by our increasingly-connected lifestyles, has been a catalyst for power shift from retailers to consumers, creating an ecosystem where it has never been easier for consumers to quickly compare prices between a wide range of retailers anytime, anywhere and from a multitude of connected devices.
In the absence of any other contributing factor, the lowest price for comparable items for sale across several retailers is a premium sales driver for the typical consumer today. This creates the need for retailers to have a deeper understanding of their competitive environment and the pricing strategies used by the competition.
A 2015 analysis by Boomerang Commerce (founded by former Amazon employee Guru Hariharan), highlighted that Amazon primarily undercuts competitors on the most popular items during a given period, and at the same time increases prices on less popular supplementary items that consumers are already committed to purchasing alongside their primary item.
Two: Product Monitoring
In addition to monitoring competitor pricing strategies, retailers should also monitor their competitors’ product assortment available for sale. Innovation still remains a key driver for many retailers, not just around the physical product but also around how the product is presented and communicated to increase sales. Retailers that have deeper insight of their competitors’ assortment portfolio have key competitive advantages. From product launches to discontinued products, smart retailers use this intelligence to stock the right products at the right time.
Three: Promotional Monitoring
For the value-conscious consumer, discounts and other common types of promotions are powerful sales drivers. While many retailers are content to oﬀer the same promotions as their competition, diligent e-commerce managers understand that contentment doesn't create a competitive advantage – but being proactive based on the latest business intelligence does.
A key reason why driven ecommerce managers engage in competitor monitoring is the valuable insight gained from primary data customised for their retail business to aid scenario planning and strategy against forecasted competitor tactics. This could be to either undercut or get a head start on other retailers by oﬀering better discounts or pre-empting and interrupting planned product and event launches.
The globalisation of product supply chains has a direct impact on most ecommerce manager’s sales and pricing strategies. It is not uncommon for retailers to experience depleted stock levels for a speciﬁc item, but this presents an opportunity for competitors to take advantage - regardless of how short lived the advantage may seem - as long as the advantage is identiﬁed and the response is implemented rapidly.
While it's useful year-round, this strategy is especially advantageous during peak purchasing periods such as the Black Friday/Cyber Monday weekend and the holiday season, both of which are incredibly lucrative for online retailers.
Monitoring Reviews and Other Media
Media monitoring oﬀers a number of potential opportunities for savvy online retailers. The nature of online retail makes it easy for customers to share both their good experiences and their negative ones, and each can provide opportunities for targeting expansion and converting the competition's customers.
Good reviews of the competition should be carefully analysed to determine what made the interaction a success, and this can be compared and contrasted with the policies and procedures ecommerce managers employ within their own operations. If the competition is being actively praised for a product or feature you don't oﬀer, it can be implemented or oﬀered immediately to negate any advantage it provides them.
Negative reviews also oﬀer unique retail marketing opportunities. E-commerce managers can use customer frustration with various aspects of their competitors online shopping process to ﬁx issues with their own sales funnel, creating marketing and promotional materials that highlight their key messages against the areas where their business excels over the competition.
Are you interested in price monitoring? Request a demo today to see how Competitor Monitor could benefit your business.