Economic pressures continue to impact how consumers engage with retailers, driving the need for a better understanding of the market. In the recent, Collier Winter 2024 Retail Report, Nicole Larson, National Retail Manager at Collier, stated that “the changing economic landscape continues to reshape consumer behaviour, with shoppers becoming more price-sensitive and brand-neutral.” As competition intensifies and consumer loyalty declines, retailers need to conduct regular retail competitor analysis to gain market insights, identify gaps, and adjust strategies promoting growth.
“The changing economic landscape continues to reshape consumer behaviour, with shoppers becoming more price-sensitive and brand-neutral.”
Nicole Larson, National Retail Manager at Collier
A retail competitor analysis provides data to help you make informed decisions, whether you planning to launch a new product, revamp your marketing strategies, or expand into new markets. This article will explore what retail competitor analysis entails, its benefits, and how to conduct one effectively.
What is a retail competitor analysis?
A retail competitor analysis is the process of evaluating other businesses in your market to understand their strengths, weaknesses, strategies, and market positioning. By scrutinizing your competitors, you can identify trends, spot opportunities, and develop strategies to stand out in a crowded industry.
Think of it as a structured method for collecting valuable insights about your business operations. Whether you’re examining pricing, customer experience, or innovation, competitor analysis provides you with the necessary data to compare your operations against those of your competitors.
Benefits of competitor analysis
Performing a thorough competitor analysis comes with a range of benefits that can transform your retail operations:
- Improved market positioning – by understanding where your competitors excel, you can tailor your offerings to fill market gaps and better meet customer needs.
- Better marketing strategies – analyzing competitors’ promotional tactics helps refine your own marketing efforts to resonate more effectively with your audience.
- Identifying industry trends – a detailed analysis reveals emerging trends, enabling proactive adjustments to your product line or business strategy.
- Strengthening business development – competitor insights provide a foundation for strategic planning, helping you define your goals and allocate resources wisely.
- Enhanced customer experience – learning from competitors’ strengths (and mistakes) allows you to design a superior shopping experience for your customers.
Why is competitor analysis crucial for business development?
Staying stagnant in retail is not an option. Conducting a competitor analysis allows you to:
- Adapt to market changes – the retail sector is always changing and analysis ensures you stay relevant.
- Understand consumer preferences – insights into competitor offerings help you align your products and services with customer expectations.
- Anticipate competitive moves – predicting your rivals’ strategies gives you the upper hand in planning your next move.
Ultimately, competitor analysis fuels innovation and keeps your business moving forwards.
Is competitor analysis secondary research?
Yes, competitor analysis is a form of secondary research, as it involves using existing data sources to gather information. Although primarily secondary, you can complement it with primary research, such as customer feedback, conducting surveys or focus groups, to get deeper insights.
What should a retail competitor analysis include?
Depending on what areas of a business you want to cover, a high-quality retail competitive analysis should cover key aspects of your competitors’ operations, such as:
1. Product offerings and quality
What to examine: Assess competitors’ product range, quality, pricing tiers, and unique selling points.
Why it matters: Identifying gaps or weaknesses in their offerings helps you position your products to better meet customer needs.
2. Pricing strategies
What to examine: Review competitors’ pricing models, promotions, discounting practices, and perceived value.
Why it matters: Pricing insights allow you to remain competitive without undervaluing your products or services.
3. Marketing and customer engagement
What to examine: Analyze their advertising campaigns, social media activity, email marketing, and loyalty programs.
Why it matters: Understanding what resonates with customers lets you fine-tune your own marketing strategies to drive engagement and loyalty.
4. Customer experience and service
What to examine: Evaluate customer reviews, in-store experiences, return policies, and service efficiency.
Why it matters: Learning from competitors’ strengths and weaknesses allows you to elevate your own customer experience and foster loyalty.
5. Online presence and sales channels
What to examine: Study their website functionality, SEO performance, e-commerce options, and omnichannel strategies.
Why it matters: A strong online presence and connected experience is important for any modern retail business. These insights can help you improve accessibility and customer convenience.
How to conduct a retail competitor analysis
Conducting a retail competitor analysis involves deliberate steps to uncover valuable insights about your competitors. By following this process, you can identify opportunities to improve your business and gain a competitive edge.
1. Define the scope and objectives
Start by clarifying the purpose of your analysis. Are you improving pricing, refining marketing strategies, or discovering market gaps? Identify your direct competitors (businesses selling similar products to the same audience) and indirect competitors (offering alternative solutions). A clear scope ensures your analysis is focused and actionable.
2. Research competitor data using multiple sources
Gather information from diverse sources, including competitor websites, customer reviews, social media, and public financial reports. Use tools like SEMrush, Zoominfo, and Bloomberg to analyse relevant business metrics and visit physical stores to observe in-person operations. This multi-source approach provides a well-rounded understanding of your competition.
3. Break down key competitive elements
Analyze specific aspects of competitor performance, such as product quality, pricing strategies, customer engagement tactics, and sales channels. This granular approach helps you pinpoint opportunities for differentiation, innovation, or improvement within your own business.
4. Experience competitors as a customer
Interact with your competitors by visiting their stores, shopping on their websites, or using their services. Pay attention to the customer journey, including service quality, website navigation, and response times. Experiencing their business firsthand reveals strengths and weaknesses from a customer’s perspective.
5. Organize data and perform comparative analysis
Use frameworks like SWOT (Strengths, Weaknesses, Opportunities, Threats) or gap analysis to compare competitors systematically. Create visual aids such as charts or tables to highlight differences and patterns. Organizing data effectively makes it easier to identify actionable insights and prioritize improvements.
6. Focus on customer insights and feedback
Study customer reviews, social media comments, and forums to uncover what customers like or dislike about competitors. Tools for sentiment analysis can help you process large-scale feedback. Understanding these customer perspectives allows you to enhance your products, services, or marketing to better meet their expectations.
7. Monitor trends and competitor evolution
Stay updated on competitors’ activities, such as product launches, partnerships, and marketing campaigns, as well as broader industry trends. By predicting their next moves and anticipating market changes, you can proactively adapt your business strategies to stay ahead.
8. Transform insights into actionable strategies
Turn the insights gained from your analysis into specific action plans. This might include adjusting pricing, improving customer service, or launching new marketing campaigns. Prioritize initiatives that address competitors’ weaknesses or leverage your unique strengths to secure a competitive advantage.
Leverage consumer insights with TruRating
With TruRating, you can combine your secondary competitor research with primary customer feedback and uncover granular insights about customer preferences and buying habits, helping refine your market positioning.
Imagine asking shoppers, “Is this your first time shopping here?” or “Do you shop here weekly?” and hearing from 80%+ of customers in-store. TruRating empowers you to understand your audience and where your standing is against the wider market.
Plus, with targeted questions based on consumers’ baskets, like “Do you always buy laundry detergent here?” you can uncover valuable data about specific product preferences in your stores.
By integrating consumer insights into your competitive analysis, you’ll keep pace with your competitors and lead the charge toward a more customer-centric retail experience. Don’t just analyze—act.
Ready to see how TruRating can elevate your retail strategy? Book a demo today or learn more about our customer feedback platform. Then, you can start making smarter, more informed decisions with every customer interaction.
