An online retailer has to prevail over thousands and thousands of other store operators within the current market situation. Standing still for a single moment does often mean falling back sharply.
The digitalization of trade did not only change the interaction of company and customer, it also modified the relations between single companies. However, while the online customers’ purchasing behaviour is being influenced by various analysis functions and methods – especially in connection with social media platforms – the field of market and competitive analysis remains something untold to the majority of online retailers.
According to a study ran by Statistika heading the question Which factors do you consider to be the ones to limit your company’s growth the most? after all 44 percent of all participants name competition the most growth-restrictive factor. Nevertheless, online retailers mostly spend less time on market analysis and do neither know their actual potential nor their competitors’ typical product market prices. The steadily increasing dynamic in ecommerce and the growing number of competitors cause the market- and competition analysis’ importance to become more and more crucial. Only knowledge on current and prospective market situation can provide decisive information for the company- and strategic development.
Market intelligence as a key to success
Another survey on the subject of Booster for modification processes and changes in B2B ecommerce 2013 stated the competition activities to be place 4 out of 11 with 72%. The necessity of getting involved in the field of market intelligence will gain importance for lots of online retailers. That is being shown clearly by the study. While manual research on the competitor milieu is enough for small-seized merchants, medium-sized and major enterprises utilize Big Data- and systematic analysis more and more often. This market- and competitive monitoring system is being characterized by systematic, steady and perfectly legal gathering and evaluation of information about companies, competitive products and market developments. Since only freely accessible information is being gathered on the Internet, polished and analysed this process is nothing like espionage.
Be aware of what the competitors plan for tomorrow – today
Rainer Michaeli describes this process involving a lot of details in his book “Competitive Intelligence” as data gathering, analysis, communication and finally integrating the information into further decisions. Initially, potential competitors have to be identified. The product spectrums do not always overlap since competitors do often only share certain partial areas. Prices and price developments are an example. By means of such data the price a product has been sold for at a certain time or which price has been the lowest or the highest can be analysed.
It is equally relevant for product life cycles and product features. Such product data being compared is especially important for manufacturers who develop new goods and launching them to the market. Knowing which products are being sold by which store – the supervision of sales channels or the realization of certain distribution strategies – is also an important factor to manufacturers.
Competitive Intelligence makes is possible to monitor the strategies, offers and concepts the competitors work with. It is obvious, that such information is crucial for one’s own assortment planning and brand strategy. Only those who develop a vivid imagination of their own business environment from all freely accessible information about markets, competitors and products will be able to assert their selves on the highly competitive online market sustainably.
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