Competitor Analysis
Competitor analysis involves assessing the strengths and weaknesses of current and potential competitors. It helps businesses understand the competitive landscape, identify threats and opportunities, and formulate effective strategies to gain a competitive advantage.
Why is competitor analysis important?
Understand your market position and share
Develop a UX strategy and prioritize the design process
Discover how competitors solve similar usability issues
Learn about failures and how to avoid them
Determine competition strengths and weaknesses
Learn about trends and innovation
Support user and market research
Purpose of a UX Competitive Analysis
Building a new Product or Feature
UX competitor analysis is a crucial part of discovery-phase research. UX teams use this competitive analysis to understand the competitive landscape and find opportunities.
Identify Market Gaps
UX researchers can use competitive analysis to identify gaps and opportunities. These gaps could be product innovation or simply a better pricing structure.
Finding a gap in the market gives a company an edge over the competition, making their product more desirable.
Support UX Research
Design teams also use a UX competitive analysis to confirm a hypothesis or support user research.
Types of Competitors to Audit for UX
Competition falls into two categories:
Direct competitors
Indirect competitors
Who are Direct competitors?
Direct competitors offer the same goods and services to the same or overlapping target market. These competitors generally compete on price because their offerings are so similar.
Instagram, TikTok, and Snapchat are direct competitors offering similar products to a similar target market.
Who are Indirect competitors?
Indirect competitors operate in the same market space but offer different products. While these are different products, they usually fulfill the same need, so the customer chooses one over another.
For example, many couples go out for dinner and a movie. A cinema with a restaurant in the foyer competes with other local cinemas (direct competitors) and restaurants (indirect competitors).
In tech, we often see indirect competitors with product overlaps. For example, Twitter and YouTube are indirect competitors, but the former offers video hosting for Tweets to keep users on the platform.
Before Twitter offered video hosting, users had to upload video content to their YouTube account and share the link in a Tweet. Nowadays, Twitter users don’t need a YouTube account to share video content, and you can embed Tweet videos in blog posts, resulting in less traffic for YouTube.
Competitive Analysis Research Methods
Create a comparison chart of the competitions’ product features
A list of features and other UX elements that would be most useful to consumers using your product including:
User interface
Images
Filters
Sorting
Load time
Responsiveness
SWOT Analysis
SWOT (strengths, weaknesses, opportunities, and threats) is an analysis technique companies can use internally or against the competition. Companies can conduct a SWOT analysis on an entire industry, market, competitor, product range, or a single product.
A SWOT assesses four key areas:
Strengths: Where is a competitor strongest? Areas where the competition makes it most difficult to compete.
Weaknesses: Where is your competition weakest? What don’t they offer or do poorly? Pro tip: You can usually find this answer in your competitor’s 1-star reviews.
Opportunities: What opportunities are open to your competition that they’re currently not exploiting? This opportunity could be a simple feature like one-click checkouts for an eCommerce brand to increase conversions.
Threats: What could potentially harm your competitor’s business? These threats are usually external, like competition, legislation, politics, technology, etc.
Using a Competitor’s Product
One of the easiest ways to “spy” on your competition and gather data is using their products. For example:
Firstly, what are your competitor’s touchpoints? What happens when you land on their website, download the app, read a blog article, etc.? How does the competition turn traffic into users and then paying customers?
How does your competitor present its products and pricing to customers?
What happens when you sign up for a free trial?
How easy is it to upgrade? And more importantly, do they make it easy to cancel–what’s that process like?
Analyze the overall UI design, including layout, micro interactions, colors, typography, etc.
Use the product as a customer to complete tasks. Were there any pain points? What does your competitor do well and poorly?
Reading Competitors’ Reviews
Reviews from mobile app stores, social media (Facebook pages, Twitter mentions), marketplaces, play store are excellent resources for analyzing competitors (and also your product’s UX). These customer reviews allow you to find out what customers love and hate about your competition.
Spend time analyzing reviews to find positive and negative patterns, and compare these patterns with your other research. Customers often leave comments like, “I wish the product could…” These types of reviews allow designers to identify gaps that competitors aren’t filling.
Advantages of Competitor Analysis:
Strategic Insights: Helps businesses understand their position relative to competitors and identify opportunities for differentiation.
Market Understanding: Provides insights into customer preferences, industry trends, and competitor strategies.
Risk Mitigation: Enables businesses to anticipate threats and react proactively to changes in the competitive landscape.
Benchmarking: Sets performance standards by comparing metrics such as market share, pricing strategies, and product offerings.
Innovation Stimulus: Encourages innovation as businesses seek ways to outperform competitors or fill market gaps.
Improved Decision Making: Provides a factual basis for decision-making in areas like pricing, marketing, and product development.
Last updated