How to Conduct a Competitive Analysis on Amazon
In today's fiercely competitive e-commerce landscape, understanding your competition on Amazon is crucial for your brand’s success. Conducting a thorough competitive analysis not only helps you identify opportunities and threats but also enables you to refine your strategy to gain a competitive edge.
Here’s a step-by-step guide on how to conduct an effective competitive analysis on Amazon.
1. Identify Your Competitors
Before you dive into the data, you need to know who your competitors are. Start by identifying both direct and indirect competitors. Direct competitors sell the same products or similar ones, while indirect competitors might offer alternative solutions to your customers’ problems.
How to Identify Competitors:
Search for your products: Type in the keywords that best describe your products and see which brands and products rank highly.
Analyze the "Customers Also Bought" section: Amazon’s algorithm suggests related products that customers often purchase together.
Use Amazon tools: Tools like Jungle Scout, Helium 10, or AMZScout can help you identify top competitors in your category.
2. Research Share-of-Voice, Share-of-Shelf and Market Share Data
Before diving into the specifics of your competitors' product listings, it's essential to understand the broader landscape of your market. Share-of-Voice (SOV), Share-of-Shelf (SOF) and market share data provide a macro-level view of your position in the marketplace relative to your competitors.
How to Research SOV and Market Share:
Utilize and analyze the "Amazon Brand Analytics" reports: Amazon’s brand analytics tools are powerful and are a rich source of Customer loyalty, search and behavioral data for your brand which will give you insights into how your competitors are doing in total.
Use advanced tools: Platforms like SimilarWeb, SmartScout, CommerceIQ, Jungle Scout, and Helium 10 offer robust analytics that can help you gauge SOV and market share.
Analyze SOV: Look at the proportion of your brand’s presence in search results compared to competitors. This includes organic search rankings, sponsored ads, and brand visibility.
Assess market share: Determine your brand's percentage of total sales within your category compared to competitors. These SOV tools can estimate sales figures and help you identify your market position.
Identify trends: Track changes in SOV and market share over time to understand the impact of your strategies and shifts in consumer behavior.
This step helps you grasp the overall competitive landscape, enabling you to see where your brand stands and which competitors are dominating the market. With this information, you can tailor your tactics to improve your visibility and sales on Amazon.
3. Analyze Product Listings
Once you have a solid understanding of your market share and SOV, it's time to dive into the details of your competitors' product listings. Pay attention to the following elements:
Product Titles: How do competitors structure their titles? Are they keyword-rich? Do they include unique selling points?
Bullet Points and Descriptions: Review how competitors highlight product features, benefits, and usage. Note the language and tone they use.
Images and Videos: Analyze the quality and number of images. Do they use lifestyle images, infographics, or videos to showcase their products?
Customer Reviews and Ratings: Look at the average star ratings and read through customer reviews to understand what customers like and dislike about their products.
Pricing Strategies: Note the pricing and any discounts or promotions they offer. Consider how your pricing compares.
4. Evaluate Competitors' Keywords
Keywords are the backbone of Amazon’s search algorithm. Conduct a thorough analysis of the keywords your competitors are targeting.
How to Evaluate Keywords:
Utilize "Amazon Brand Analytics" Search Query Performance reports: Amazon provides excellent search and keyword data for your brand which will give you insights into how your competitors are doing in total.
Use keyword research tools: Tools like Helium 10’s Cerebro or Jungle Scout’s Keyword Scout can help you uncover the keywords your competitors are ranking for.
Analyze backend keywords: Some tools allow you to reverse-engineer competitor listings to discover hidden keywords used in their backend.
Assess keyword performance: Look at the search volume and competition level for each keyword. Identify gaps where you can rank higher with less competition.
5. Monitor Pricing and Promotions
Price is a key factor influencing purchase decisions on Amazon. Monitoring your competitors' pricing and promotional strategies will give you insights into market trends and customer expectations.
Steps to Monitor Pricing:
Track price changes: Use tools like Keepa, Helium10 or CamelCamelCamel to monitor price history and trends over time.
Analyze promotional tactics: Observe when competitors offer discounts, coupons, or lightning deals. Consider how these promotions affect their sales rankings.
Compare value propositions: Evaluate how competitors justify their pricing through features, benefits, or brand reputation.
6. Assess Advertising Strategies
Amazon’s advertising platform is a powerful tool for driving visibility and sales. Analyzing how your competitors leverage advertising can help you optimize your own campaigns.
Key Advertising Metrics to Monitor:
Sponsored Product Ads: Identify which keywords and products competitors are bidding on. Use tools like Helium 10’s Adtomic to analyze ad placements.
Sponsored Brands and Display Ads: Look at how competitors use these formats to build brand awareness and drive traffic to their Amazon storefronts.
Budget and Bidding Strategy: While it’s challenging to determine exact budgets, you can infer from competitors’ ad visibility and frequency. Adjust your strategy based on their activity.
7. Analyze Sales Performance
Understanding your competitors’ sales performance will give you a clearer picture of where you stand in the market. Although exact sales data can be elusive, there are ways to estimate it.
Methods to Analyze Sales:
Sales Rank Analysis: Amazon’s Best Sellers Rank (BSR) can give you an idea of a product’s sales volume. Track changes in BSR over time to gauge performance.
Estimate sales volume: Tools like Jungle Scout and Helium 10 offer sales estimates based on BSR and other factors.
Review frequency of reviews: A higher volume of reviews often correlates with higher sales. Monitor how quickly competitors accumulate reviews.
8. Examine Customer Service and Fulfillment
Customer service and fulfillment play a significant role in customer satisfaction and repeat business on Amazon. Evaluating how your competitors handle these aspects can reveal areas for improvement in your own operations.
What to Analyze:
Shipping options and speed: Check whether competitors offer Prime shipping, free shipping, or expedited options.
Return and refund policies: Review how competitors handle returns and refunds. Are their policies customer-friendly?
Customer support: Analyze how competitors respond to customer inquiries and complaints. This can be seen in product Q&A sections and review responses.
9. Benchmark and Set Goals
After gathering all this data, the next step is to benchmark your performance against your competitors. Identify areas where you outperform the competition and areas that need improvement. Use these insights to set realistic goals for your Amazon business.
How to Benchmark:
Create a competitive matrix: Use a spreadsheet to compare key metrics like pricing, keyword rankings, reviews, and sales estimates.
Set SMART goals: Your goals should be Specific, Measurable, Achievable, Relevant, and Time-bound. For example, “Increase SKU123 product visibility by ranking in the top 10 for five new keywords within three months.”
10. Regularly Update Your Competitive Analysis
The Amazon marketplace is dynamic, with new competitors entering and existing ones changing their strategies regularly. Make it a habit to revisit and update your competitive analysis periodically to stay ahead of the competition.
Tips for Ongoing Monitoring:
Set up alerts: Use tools to receive notifications of changes in competitor pricing, reviews, and rankings.
Stay informed: Keep an eye on industry news and trends that could impact your market.
Adjust your strategy: Be agile and ready to tweak your strategy based on new insights from your ongoing analysis.
Conclusion
Conducting a competitive analysis on Amazon is an ongoing process that requires attention to detail and the use of the right tools. By understanding your top competitors, staying aware of new competitors and strategically responding to their moves, you can position your brand for success in the crowded Amazon marketplace. Remember, the goal is not just to imitate but to innovate and offer greater value to your customers.
Feel free to reach out if you need more insights or personalized advice on optimizing your Amazon selling strategy. Let's achieve success together! For more detailed strategies and best practices, click this link to schedule your complimentary 30-minute consultation.
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