How to Conduct an E-commerce Competitor Analysis That Actually Works

Understanding Your E-commerce Landscape

E-commerce competitor analysis is the process of researching and evaluating your competitors to understand their strengths, weaknesses, and strategies in the online marketplace. This information helps you make informed decisions about your own business strategy.

Quick Guide to E-commerce Competitor Analysis:1. Identify your competitors (direct, indirect, and tertiary)2. Analyze their websites (design, UX, product presentation)3. Evaluate pricing strategies and product offerings4. Study marketing approaches (SEO, social media, email)5. Assess customer service policies and execution6. Review customer feedback for insights7. Use analytical tools to track performance metrics

In today's digital marketplace, with over 26.5 million e-commerce sites globally (up from 9.2 million in 2019), understanding your competition isn't just helpful—it's essential for survival.

The explosive growth in online retail means your customers have more choices than ever before. Every day, shoppers compare products, prices, shipping options, and experiences across multiple stores before making their purchasing decisions. Without a clear picture of your competitive landscape, you're essentially operating in the dark.

A thorough competitor analysis gives you the insights needed to differentiate your store, optimize your pricing, improve your customer experience, and ultimately capture more market share. It transforms guesswork into strategy.

Think of competitor analysis as your market intelligence operation—revealing opportunities that might otherwise remain hidden and alerting you to threats before they impact your bottom line.

I'm Steve Pogson, a Shopify Expert with over two decades of experience conducting e-commerce competitor analysis for brands looking to grow their online presence. As founder of First Pier, I've helped numerous businesses leverage competitive insights to outperform rivals and capture greater market share.

Common E-commerce competitor analysis vocab:- E-commerce marketing strategy- E-commerce product photography- E-commerce supply chain management

Why E-commerce Competitor Analysis Is Crucial in 2024

The online shopping world has exploded in recent years. Global e-commerce sales jumped by a whopping 27.6% in 2020, reaching $4.2 trillion. And that growth? It's not slowing down anytime soon, making the digital marketplace more crowded and competitive than ever before.

But here's the thing – it's not just about how big the market is. It's about how quickly shoppers are changing what they expect from you.

Let these numbers sink in for a moment:

• 59% of American consumers will walk away from a brand after several bad experiences (and 17% will give you just one chance before they're gone for good)
• 43% of shoppers are happy to pay extra for more convenience like faster shipping
• 71% of people will pay premium prices for brands that show exactly where their products come from

I've seen this play out countless times with our clients. Today's online shoppers demand excellence, and they'll click away to your competitors in a heartbeat if they don't get it. According to research by PwC, four factors drive most purchase decisions: product quality, shopping experience, customer service, and price. Guess what? E-commerce competitor analysis helps you improve in all these areas.

"Almost any product you can think of is already being sold by someone else. That's both good and bad news," I often tell my clients at First Pier. "The good thing is that competition is a strong proxy for consumer demand."

After working with countless e-commerce businesses in Portland and beyond, I've noticed that companies who regularly check out their competition make better pricing decisions, find untapped market opportunities, understand shifting customer expectations faster, develop more compelling unique selling points, and spend their marketing dollars more wisely.

Think about it like this: preparing to climb a small hill versus scaling Mount Kilimanjaro requires completely different gear and training. Without proper research, you might be preparing for the wrong challenge entirely. E-commerce competitor analysis helps you understand exactly what mountain you're climbing and what equipment you'll need to reach the top.

The online marketplace gets more competitive every day. Staying on top of what your rivals are doing isn't just helpful—it's essential for survival and growth in 2024.

Want to build a comprehensive business strategy based on solid market analysis? Check out our guide on E-commerce Business Strategy for more insights.

7-Step E-commerce Competitor Analysis Framework

Looking at what your competitors are doing isn't about casual browsing or copying their approach. It's about gathering insights systematically to improve your own business. After helping hundreds of e-commerce brands level up their game, I've refined this 7-step framework that consistently delivers results you can actually use.

Before we dive into the steps, let's understand who we're actually analyzing. Your competitors typically fall into three categories:

Direct competitors sell similar products to the same customers you're targeting. Indirect competitors offer different products that solve the same problems. And tertiary competitors might compete for your customers in specific situations or could become competitors in the future.

For example, if you run an online specialty coffee shop, other premium coffee websites are your direct competitors. Coffee subscription services might be indirect competitors, while local cafés or even tea companies could be tertiary competitors.

Now, let's explore each step of our framework in detail.

Step 1 – Identify Competitors & Set Goals for E-commerce Competitor Analysis

Finding out who you're really competing against is your crucial first move. Start with Google searches for your main products. If you sell handcrafted leather wallets, search exactly that and see who appears in the top results.

Don't stop at search engines. Browse major marketplaces like Amazon, eBay, and Etsy to find sellers offering similar products. As one e-commerce founder told me, "I use Amazon as a database to find similar product offerings."

Tools like SimilarWeb can help identify websites attracting similar audiences to yours. Simply enter your domain, and these tools reveal sites with comparable demographics and interests.

One of my favorite techniques is simply asking your customers. A quick survey question like "Which other stores did you consider before buying from us?" often reveals competitors you hadn't considered.

Once you've identified 7-10 key competitors, categorize them and clarify what you want to learn. Are you looking to improve your messaging? Find gaps in your product line? Better understand customer expectations? Being clear about your goals ensures you collect relevant information.

Step 2 – Gather Website & UX Data

Your competitors' websites tell a story about their business priorities and customer experience. In this step, you'll analyze their online presence through a customer's eyes.

Examine their navigation structure—how are products categorized? Is the menu intuitive? Check site speed using tools like Google PageSpeed Insights. Test mobile responsiveness across different devices. Note how they place conversion elements like calls-to-action, trust badges, and their checkout process.

At First Pier, we use a structured approach that involves defining what to evaluate, creating customer personas to guide our perspective, mapping the customer journey from landing to checkout, documenting pain points and positives, and summarizing findings.

Pay special attention to product presentation (image quality, videos, 360° views), product descriptions (detail level, tone, focus on benefits), trust elements (reviews, guarantees), and the checkout experience (steps, payment options, upsells).

I once worked with a home goods client who finded all their main competitors required account creation before purchase. By implementing a simple guest checkout option, they saw an immediate 15% increase in conversion rate. That's the power of spotting gaps in the competitive landscape.

Step 3 – Track Product Range, Pricing & Stock

What your competitors sell, how they price it, and how they manage inventory reveals a lot about their business model and target customers.

When looking at product range, consider both breadth (variety of products) and depth (variations of each product). Does your competitor offer a wide selection or focus on a specific niche? How many variations (sizes, colors, materials) do they provide for each product? How often do they introduce new items?

For pricing analysis, look beyond just comparing numbers:- Are they using fixed pricing, dynamic pricing, or subscription models?- Where do they position themselves—budget, mid-range, or premium?- Do their prices vary by location?- How often do they run promotions and how deep are their discounts?

Tools like Netrivals can help automate real-time price monitoring across multiple competitors, especially useful in categories where prices change frequently.

Stock availability provides insights into supply chain efficiency and sales volumes. How often are products available? How quickly do out-of-stock items return? Do they allow backorders?

One Portland-based apparel client finded their main competitor was consistently out of stock in certain size ranges. By ensuring better availability in these sizes, they captured frustrated customers looking for alternatives.

Step 4 – Inspect Marketing Channels

Understanding how competitors attract and engage customers helps shape your own marketing strategy. This step involves analyzing their presence across various channels and their messaging approach.

Start with SEO analysis. Which keywords are they ranking for? What's their content strategy like—blog frequency, topics, depth? Who links to them and why? Tools like Ahrefs or SEMrush can uncover the keywords driving traffic to competitor sites and help identify gaps you could target.

For paid advertising, notice which keywords they're bidding on, where their banner ads appear, and whether they use retargeting when you visit their site.

Social media reveals their brand voice and customer engagement style. Which platforms are they most active on? What content types do they share—photos, videos, user-generated content? How often do they post? What's their engagement like?

Take FashionNova, for example. They post at least 30 times daily on Instagram, creating an overwhelming presence that's tough to match. While this volume isn't right for every brand, it shows their commitment to dominating social media.

Email marketing strategies can be analyzed by subscribing to competitor newsletters. How often do they send emails? What's their content mix—promotional versus educational? Do they tailor messages based on behavior? What automation flows do they use?

For more insights on building a comprehensive marketing strategy informed by competitive analysis, check out our guide on E-commerce Marketing Strategy.

Step 5 – Evaluate Customer Service & Policies

Customer service can make or break an e-commerce business. In this step, you'll assess how competitors handle customer interactions and what policies they have in place.

Start with shipping and delivery options. What shipping speeds do they offer? How do they structure shipping costs? How transparent is their delivery tracking? 43% of consumers will pay more for faster shipping, making this a potential competitive advantage.

Next, analyze return policies. How long is their return window? How simple is their return process? Do they charge restocking fees?

Test their customer support directly. What contact options do they provide? How quickly do they respond? How helpful are their support agents?

I often suggest clients contact competitor support with a basic question to gauge response quality. One home goods retailer finded their main competitor had a 48-hour email response time. By implementing live chat with immediate responses, they highlighted superior service as a key differentiator.

Also examine warranty and guarantee policies. How long are their warranties? What exactly do they cover? Do they offer satisfaction guarantees?

Step 6 – Mine Reviews for Strengths & Gaps

Customer reviews are goldmines of competitive intelligence. They reveal what customers love and hate about your competitors, highlighting opportunities for your business.

Gather reviews from multiple sources: competitor websites, marketplace platforms like Amazon, third-party review sites like Trustpilot, social media comments, and industry forums.

Look for patterns in positive reviews. What features do customers consistently praise? Which service aspects get mentioned? Do customers feel they received good value?

One beauty brand I worked with noticed customers consistently praised a competitor's packaging as "Instagram-worthy." By redesigning their own packaging to be more photogenic, they saw a significant increase in social sharing and referral traffic.

More importantly, analyze negative reviews for weaknesses you can exploit. What complaints come up repeatedly? Where's the gap between what was promised and what was delivered? What features do customers wish the product had? Where does the customer experience break down?

Use sentiment analysis to quantify these themes. What's the overall positive-to-negative ratio? Which features receive the most praise or criticism? Is customer satisfaction improving or declining over time?

"Customer reviews are a goldmine for uncovering both what delights and what frustrates shoppers," I often tell clients. These insights directly inform product development, marketing messages, and customer service improvements.

Step 7 – Summarize Findings With E-commerce Competitor Analysis Templates

The final step is organizing all your research into a structured format that translates into clear actions. Without this crucial step, you risk collecting data that never improves your business.

SWOT analysis (Strengths, Weaknesses, Opportunities, Threats) is one of the most effective frameworks for summarizing competitor insights. Create a grid for each major competitor showing what they do exceptionally well, where they fall short, what gaps exist that your business could fill, and what competitor advantages might impact your business.

Perceptual mapping is another valuable tool that visually plots competitors along two key dimensions, such as price vs. quality or selection vs. service. This helps identify positioning gaps in the market your business could fill.

Finally, translate your analysis into actionable items:1. Quick wins you can implement immediately2. Projects to launch within 3-6 months3. Major initiatives requiring significant resources

A Portland furniture retailer I worked with identified that none of their competitors offered augmented reality visualization tools. This became a 6-month initiative that ultimately increased their conversion rate by 24%.

The goal isn't to copy competitors but to learn from both their successes and failures to develop your own unique market position. As one expert puts it, "Data without action is useless." Make sure your E-commerce competitor analysis directly feeds into your strategic planning process.

Must-Have Tools and Metrics

When it comes to e-commerce competitor analysis, having the right tools in your arsenal makes all the difference. In my years helping online stores grow, I've found that the right combination of tools and metrics can transform a good analysis into a great one.

SEO and Traffic Analysis Tools

The digital landscape is constantly changing, and keeping tabs on your competitors' online presence is crucial. Tools like Ahrefs have been game-changers for my clients, revealing the exact keywords competitors are ranking for and which content drives their traffic.

SEMrush offers similar insights but with the added benefit of paid search analysis. I remember working with a Portland boutique that finded their competitor was dominating a niche set of long-tail keywords related to product care. By creating more comprehensive guides on these topics, they not only captured traffic but positioned themselves as the go-to experts in their field.

SimilarWeb rounds out the traffic analysis toolkit by providing estimates of visitor numbers and behavior patterns. This helps you understand not just where traffic comes from, but what users do once they arrive.

Technical and Platform Analysis

Knowing what's under the hood of your competitors' websites gives you valuable technical insights. BuiltWith has been my go-to for years when helping clients understand competitors' technology choices.

The Wappalyzer browser extension is perfect for quick checks while browsing competitor sites. And if you're specifically focused on Shopify competitors, the Shopify Inspector Chrome extension can reveal theme details and other Shopify-specific information.

One client used these tools to find that all their major competitors were using outdated payment processing systems. By implementing a more modern solution, they reduced checkout abandonment by nearly 20%.

Price and Product Monitoring

Pricing is often the battlefield where e-commerce wars are won or lost. Tools like Prisync automate price tracking and can even help with dynamic pricing strategies.

Netrivals specializes in real-time competitor price monitoring, which is particularly valuable in fast-moving markets where prices change frequently.

For more general website changes, Visualping alerts you when competitors update their sites, add new products, or change key pages. As one e-commerce expert I work with often says, "Use price-tracking tools to monitor historical pricing and anticipate competitor moves."

Social Media and Content Analysis

Your competitors' social presence tells a story about their brand and marketing strategy. BuzzSumo helps identify which content resonates most with your shared audience.

Hootsuite provides a dashboard for monitoring competitor social activity across platforms, while Mention casts a wider net to track brand mentions throughout the web.

Review and Reputation Monitoring

Customer reviews are goldmines of competitive intelligence. ReviewTrackers aggregates reviews from multiple platforms, helping you spot patterns in competitor feedback.

For broader market insights, Brandwatch offers powerful social listening capabilities. And don't overlook the simple but effective Google Alerts – a free tool that notifies you whenever your competitors are mentioned online.

When choosing between manual and automated data collection, consider these trade-offs:

When selecting which metrics to track, focus on those that directly impact your bottom line. Market share gives you the big picture view, while share of voice measures your visibility compared to competitors in search and social spaces.

Your price index relative to market averages helps position your products appropriately, and tracking assortment overlap shows how directly you compete with others in your space.

Conversion rate comparison against industry benchmarks helps identify opportunities for optimization, while customer satisfaction scores like NPS or CSAT put your customer experience in context.

The goal isn't to track everything possible – it's to gather meaningful insights that drive action. As I tell my clients, data without action is just noise.

For more on making the most of your e-commerce data, check out our guide on E-commerce Data Analytics.

From Insights to Action: Implement, Monitor, Avoid Pitfalls

Gathering all that competitive intelligence is just the starting point. The real value comes from putting these insights to work in your business. Let me share how to transform your research into results while steering clear of common traps.

Implementing Competitive Insights

I always advise my clients to prioritize their opportunities based on four key factors:

First, consider the potential impact on your revenue or profit. Some changes might seem exciting but won't move the needle on your bottom line.

Second, be realistic about the resources required – how much time, money, and expertise you'll need to make the change happen.

Third, think about the implementation timeline. Quick wins can build momentum while you work on longer-term projects.

Finally, ensure strategic alignment with your brand identity and business goals. Not every competitor tactic will feel authentic to your brand.

"We don't want to be reactive to every competitor move," I remind clients. "We want to be selective and strategic."

For example, a Portland-based kitchenware store finded through competitor analysis that none of their rivals offered price matching. By implementing and promoting this policy, they saw a 15% increase in conversion rate with minimal impact on margins.

You might implement competitive insights through:

Pricing tests to find the sweet spot between conversions and profit margins. One client found a 10% price reduction on select products actually increased overall profitability through higher volume.

Product improvements based on gaps in competitor offerings or common customer complaints. Adding features that customers repeatedly request from competitors can be a quick win.

UX fixes to streamline your shopping experience. If competitors have a simpler checkout process, testing a similar approach could reduce abandonment rates.

Marketing copy refinements that better communicate your unique advantages. One apparel client realized their competitors weren't highlighting sustainability practices – emphasizing this in their messaging increased engagement substantially.

Monitoring Competitive Changes

Competitor analysis isn't a one-and-done project – it's an ongoing practice. The e-commerce landscape evolves rapidly, and yesterday's insights can quickly become outdated.

Set up systems to keep tabs on your competition:

Scheduled reviews give your team a chance to dive deep into major competitors' activities each quarter. Block this time on your calendar and treat it as non-negotiable.

Automated alerts through tools like Google Alerts can notify you when competitors launch new products, change pricing, or receive media coverage.

Regular team input is invaluable – your customer service and sales teams often hear directly from customers about competitor offerings. Create a simple system for them to share these insights.

"Your competitor analysis should be a living document," I often tell clients. "Something you revisit and refine as the market evolves."

Avoiding Common Pitfalls

Through my years of helping e-commerce businesses grow, I've seen several recurring mistakes in how companies approach competitor analysis:

Confirmation bias happens when we only look for information that supports what we already believe. According to research on confirmation bias, we naturally gravitate toward evidence that confirms our existing views. To combat this, deliberately seek out information that challenges your assumptions.

Analysis paralysis strikes when you collect so much data that you become overwhelmed and fail to take action. Imperfect action is better than perfect inaction.

Copycat syndrome is the temptation to simply mimic competitors rather than developing your own unique advantages. Your goal should be to learn from competitors, not become them.

Ignoring indirect competitors can leave you vulnerable to market disruption. Sometimes the biggest threats come from businesses that aren't direct competitors today but could capture your customers tomorrow.

Failing to update your competitive intelligence regularly means you're operating on outdated information in a rapidly changing landscape.

A client in the beauty space once told me, "We were so focused on what our direct competitors were doing that we completely missed the rise of subscription boxes. By the time we noticed, we were playing catch-up."

The best approach is to maintain a structured, ongoing competitive analysis process that involves diverse perspectives from across your organization. Focus on generating actionable insights rather than endless data collection.

For more strategies to grow your e-commerce business based on competitive insights, check out our guide on E-commerce Growth Tactics.

Conclusion

In today's crowded online marketplace, a thorough e-commerce competitor analysis isn't just a nice-to-have—it's essential for survival and growth. With over 26.5 million online stores vying for customer attention, understanding where you stand gives you the clarity needed to stand out and succeed.

Throughout this guide, I've shared the framework and tools I've developed over two decades of helping e-commerce businesses transform competitive insights into growth opportunities. Each step of the process—from identifying competitors to mining customer reviews—provides valuable intelligence that can reshape your business strategy.

Competitor analysis isn't about copying what others do. It's about understanding the market landscape so you can carve your unique position within it. As one successful furniture brand owner told me, "Looking at competitors showed me not what to copy, but what gaps to fill." That insight perfectly captures the true value of this work.

At First Pier, our Portland-based team works closely with Shopify store owners to put these competitive insights into action. We've seen how small changes informed by competitor analysis can lead to significant improvements in conversion rates, customer loyalty, and bottom-line results.

The most successful online stores don't treat competitor analysis as a one-time project. They make it an ongoing practice that informs decisions at every level—from product development to marketing strategy to customer service policies. By building regular competitive monitoring into your business rhythm, you'll stay ahead of market trends and continuously sharpen your competitive edge.

Ready to gain a deeper understanding of your competitive landscape? Want to turn those insights into practical improvements for your online store? Learn more about our award-winning Shopify agency and how we can help you outperform your competition.

In e-commerce, knowledge isn't just power—it's profit. Start your competitor analysis today, and watch your business thrive tomorrow.