What’s the Best Way To Identify Competitor Threats?

Global customer data science company Dunnhumby partnered with location analytics platform Placer.ai to develop a tool to assess retailers’ competitive threats, joining a crowd of newer tech-driven solutions to competitor intelligence.

The “Competitive Threat Evaluator” tool combines geolocation data from Placer.ai — including cross-shopping behavior and proximity to competitors — with customer perception data from Dunnhumby’s annual Retailer Preference Index (RPI).

Matt O’Grady, president of the Americas at Dunnhumby, said the tool, currently available to grocers, offers “a single dataset that provides invaluable shopper insights and store preferences to make sure they stay on top of their competitive threats.”

According to an article in The Yale Ledger, methods used to gather competitor data may include:

• Conducting market research: Utilize focus groups, surveys, and customer interviews to gather insights on competitors’ reputations and pain points with customers.
• Monitoring online presence: Regularly monitor competitors’ websites, social media platforms, online content, customer reviews, and messaging strategies to gain insights into their strengths, weaknesses, and customer satisfaction.
• Attending industry events: Attend industry conferences and trade shows to interact with competitors directly, observe their presentations, and gain insights into their latest initiatives. Networking with industry professionals can also yield information on competitor strategies.
• Analyzing publicly available information: Scrutinize public sources such as annual reports, press releases, financial statements, and industry publications to gain insights into competitors’ performance, expansion plans, partnerships, and product launches.
• Utilizing competitor analysis tools: By aggregating and analyzing data from various sources, competitor analysis tools enable tracking of competitor performance, pricing, marketing strategies, and online visibility.
• Hiring competitor analysis experts: With an understanding of industry dynamics and intelligence-gathering techniques, competitor analysis experts go beyond surface-level observations and delve into deeper insights, identifying trends, patterns, and competitive strategies that may not be immediately apparent.

“Competitors have a way of sneaking up on you, especially in today’s market,” said Dana Colbert, vice president of Radius, in a blog entry. “The pressure is on as technology opens new supply channels, pricing becomes more efficient, and companies have greater direct access to customers via social media and other online platforms.”

She explained that simply staying close to customers can help retailers avoid being blindsided by changing market dynamics. Colbert said, “Existing customers are your strongest allies for gaining insight to product and service weaknesses and to gaps that can increase your vulnerability.”

According to Shopify, there are six pitfalls of competitive analysis:

1. Competitive analysis is not a one-and-done exercise: With businesses constantly evolving, competitor analysis must be considered as an ongoing process.
2. Confirmation bias is real: Avoid the tendency to favor initial assumptions, including preconceived ideas about competitors.
3. Data without action is useless: Adjustments should be made based on findings on competitors’ strengths and weaknesses.
4. Working harder instead of smarter: Take advantage of the latest data collection tools that can significantly speed up competitor research.
5. Starting without a direction: Before researching, it’s important to define goals regarding what you want to learn about the competition.
6. Not accounting for market timing: Study competitors and how they’ve grown and progressed over time rather than only assessing their approach at a single fixed point.