How Retailers Track Competitors Using E-commerce Datasets

Learn how e-commerce datasets help retailers monitor competitors, optimize pricing, and identify market trends effectively.

Winning at retail in this hyper-competitive digital market requires more than just instinct. Retailers are now facing an environment where their competitors may change their prices hourly, where new products are being added to their competitors’ websites every week, and where consumer purchasing habits can change almost instantly. To overcome these challenges, retailers are increasingly using e-commerce data sets to make informed decisions on competitor monitoring, identifying market trends, and data-driven decision making.

Competitive intelligence E-commerce DataSets consist of structured collections of product; Pricing; Availability; and Consumer Interaction (Digital Channels) data that provide tremendous value to retailers. This article provides a detailed overview of how retailers can leverage e-commerce market data sets to track their competitors and the types of data that are included in these datasets, as well as the competitive advantages they offer retailers.

Understanding Competitive Intelligence in E-commerce

Competitive Intelligence in the world of e-commerce is the way in which many online retailers access and evaluate competitive information. In contrast to the way physical retail stores used to track competition through visiting stores and an occasional flow of quarterly reports from competitor retailers, e-commerce has changed the way in which retailers obtain competitive intelligence. Rather than having to rely on manual store visits and quarterly reports, e-commerce provides a more constant, scalable, and granular view of competitive information over time.

The data available to e-commerce retailers allows them to assess the current state of competition and answer key questions such as:

1.How does my competitor price their products similar to my product?
2.Which products are gaining visibility and/or losing visibility?
3.How often is my competitor running promotions?
4.What type of products are out of stock/appropriate for selling at an opportunity?
And, when is the appropriate time to re-enter the market with the same type of product?

When e-commerce retailers have the right data, they can continually monitor the competitive landscape.

Key Types of E-commerce Datasets Used for Competitor Tracking

To gain the best insight, retailers collect a variety of different e-commerce datasets from other retailers, with each dataset offering a different layer of insight.

1. Retailers start with the Pricing/Pricing History Dataset. This dataset provides a foundation for Competitive Tracking. The Pricing Dataset includes information such as:

– Pricing for products called “Products” by Retailers on a variety of Marketplaces & Retailers.com

– Sale Prices

– Shipping Prices/Bundled Deals

By examining the historical pricing data for Products, retailers better understand how to Price Products competitively without compromising their margins.

2. Retailers track Competitors’ Product Catalogs and Assortments as a separate dataset from Pricing History. Product Catalogs include SKU(s), variants, attributes, product launches, and discontinuations, as well as category expansion or contraction. By tracking this data, Retailers learn about the structure of Competitors’ Product Catalogs and Assortments, e.g., a large increase in Private Brand products may indicate Competitors’ increased focus or effort to increase margins, and rapid increases in SKU counts may indicate Competitors’ efforts to reach new Customer segments.
3. Even though most Retailers do not know how much inventory any                                               competitor has or uses, they use e-commerce data as it relates to out of stock signals; Backorders; and changes in Delivery time signals. Tracking this type of availability provides insights into the Supply Chain weaknesses of Competitors and presenting opportunities for Retailers, when Competitors are out of stock on their best-selling Products.
4. The purpose for gathering data is not to simply collect the data; however the data must be compiled and presented in an inventory format which will allow for retailers to compare and contrast their business to other retail businesses in an ecommerce environment.

By creating competitive insight from raw data retailers will have an advantage over their competitors when they create actionable insight from this information.

In order to take full advantage of the benefits of raw data as a tool for the development of retailer’s businesses, retailers will need to combine their raw data with both operational metrics and retail market place operational metrics in order for the retailer to compare and contrast their overall performance as a retailer.

5. Competitor Analysis through Customer Feedback (Review Ratings & Reviews)

Customer reviews and ratings provide an enormous amount of qualitative information on the products of competitors. Retailers will look at the following pieces of data as part of comparing their products to those of a competitor:

• The average rating.
• The number of ratings.
• The types of complaints made by customers, who ask for certain types of features, or request improvements to the product.
• The overall trend in customer sentiment over time.

Identifying the weaknesses of competitive products enables retailers to improve their own product. For example, if several customers expressed concerns about the durability of a product, then this would be an excellent basis on which to build a new product or further emphasize the durability of an existing product.

Transforming Raw Data into Competitive Insights

Data preparation is about developing actionable competitive insights and making those insights consistent across different geographies.

To harness the potential of raw data to create competitive advantage within Retail, Retail must combine raw data with both their own internal operational performance metrics as well as all of their relevant Retail Market Operational Performance Metrics. This will allow Retail to develop useful and meaningful comparative metrics by which they can improve their operational effectiveness and ultimately their overall retail performance.

Using eCommerce Databases, a Retail Business is able to establish its competitors’ performance benchmarks using eCommerce Database information. This allows Retail to assess their marketplace competitors based upon three categories:

• Retailers will be able to identify how their pricing compares with their competitors based upon specific items.
• Retailers will be able to assess how extensive and/or deep their range of product offerings is relative to their competitors.
• Retailers will also be able to assess how much discounting is being provided by Retail and if that discounting is resulting in increased numbers of customers and purchasing customers.

From the findings of the Competitive Benchmarking process, the Retail Business can establish its competitive advantage relative to other Retail Businesses through Pricing strategies, Product Breadth, and Customer Satisfaction Experience.

Recognizing and Modifying Market Trends Ahead of the Consumer

A company that monitors its competitive environment continuously can determine new consumer trends before they become mainstream. To be aware of changes to a specific category and/or to understand any changes that may affect a retailer’s ability to meet customer needs as well as changes to the customer’s perception of the retailer’s product category, is critical for retailers to monitor their competitive environment.

By monitoring the changes in market trends before the general public adopts them, retailers can plan how to adjust their pricing, marketing strategy and their inventory, in anticipation of what their competition will be doing.

Use of automated decision making tools

Retailers can use their competitive datasets with AI systems to make a set of automated decisions, including:

1.Their prices also adjust automatically when a competitor raises or lowers their price 2.Recommend classification changes according to competition
3.They automatically run promotions whenever they see competitors running promotions.

By using automation, a retailer can be responsive in the highly competitive world of e-commerce. Automated price adjustments and promotional activity allows retailers to be responsive to their competitors within minutes.

Strategic Benefits of Competitor Tracking with E-commerce Datasets

A strong customer relationship management (CRM) program allows retailers to maintain a competitive advantage by enabling them to:

1. Anticipate greater accuracy of their pricing and reduce the amount of manual monitoring.
2. React more quickly to shifts in the marketplace.
3. Better identify a product’s position and to create a uniqueness or differentiation.
4. Eliminate the chance of being unaware of what your competitors are up to.

For retailers in highly competitive categories, the above reasons are often the main reasons why some retailers succeed in increasing and maintaining market share and other retailers fail (Baker, 2017).

Although e-commerce datasets present a great deal of opportunity for retailers, there are many challenges associated with properly using the datasets as follows:

– Currency and accuracy of the e-commerce datasets

– Variations in the data from different e-commerce platforms (no standardized definition)

– Legal/ethical considerations with respect to the collection of e-commerce datasets

Best practices for properly using e-commerce datasets and maximizing their full benefits include:

– Making ongoing investments toward the maintenance of high-quality data controls.

– Using legal/ethical methods to collect e-commerce datasets.

Focusing on obtaining actionable analytics rather than just how many e-commerce datasets you acquire.

Conclusion

Retailers nowadays have complete insight into their competition’s pricing strategies, assortment of products, availability signals, as well as opinions about particular products via comprehensive data related to the e-commerce industry which provides continual insight into the digital marketplace.

With these datasets at their disposal, retailers are better able to accurately predict competitor activity, respond immediately to changes within the Market Place, and make sounder strategic decisions. Competitive Intelligence will become increasingly critical to Retail Success as the landscape of E-Commerce continues to change and evolve.