COMPETITIVE ANALYSIS
Definition
Competitive analysis is the process of observing, comparing, and interpreting competitors' pricing strategies in order to make more informed pricing decisions.
As part of a pricing strategy, it goes beyond simply collecting price data; it also involves analyzing promotions, product assortments, positioning, product availability, and perceived value.
Its goal is to identify opportunities for differentiation, maintain the company's competitiveness, and simultaneously optimize sales, margins, and price image.
Why it's important
- Protecting your price image: Avoiding a negative price gap on key products helps prevent a loss of traffic.
- Identifying profit opportunities: pinpointing the products where you’re cheaper than the competition allows you to raise prices without risk.
- Anticipating market disruptions: Continuous analysis detects new entrants, structural price declines, or changes in product assortments.
Example
A home appliance retailer is implementing a weekly analysis of 12 competitors across 3,000 product SKUs.
The study reveals that for 18% of its products, prices are more than 5% higher than the market low, which damages its price image.
Conversely, for 22% of products, its prices are more than 5% lower without any profit margin. The streamlining generates a +1.8-point margin increase for the category without any loss in revenue.
How do you measure/use it?
An effective competitive analysis consists of four steps:
1) Define the scope (relevant competitors, benchmarks to follow, frequency),
2) collect data (web scraping, in-store surveys, partners),
3) consolidate and clean up (product matching, promotion management),
4) Analyze and make decisions (positioning by category, by product, by competitor). Analytics tools integrate these steps into a standardized workflow.
Mistakes to Avoid
- Comparing non-equivalent products: incorrect product matching skews all conclusions.
- Tracking too many competitors: spreading your analysis across 30 brands dilutes the insights; it’s better to focus on the 5 to 8 that are truly competing.
- Confusing data collection with analysis: simply collecting prices isn’t enough; you also need to put them into context and use them to make decisions.
Frequently Asked Questions
Comparing prices alone is no longer enough to understand the reality of the market
A true competitive analysis also takes into account promotions, product assortments, stockouts, brand positioning, services offered, and changes in demand
It is this comprehensive view that enables truly informed pricing decisions.
The frequency depends on the industry
In e-commerce, daily monitoring is often essential
In mass retail, a weekly schedule is generally used for the most sensitive products, while other categories can be analyzed on a weekly or monthly basis depending on their volatility.
The goal is not to track every player in the market, but to select the competitors that truly influence your performance
This includes direct competitors, pure players, marketplaces, and—depending on the category—local players
A list that’s too broad creates noise and complicates decision-making.
Web scraping solutions combined with product matching engines make it possible to automatically collect competitive data, identify equivalent products, and populate real-time dashboards
This allows pricing teams to focus on analysis and decision-making rather than on data collection.
The most common mistakes include comparing non-equivalent products, systematically copying competitors’ prices, or reacting too slowly to market changes
A reliable competitive analysis must always be viewed within the context of your sales strategy, your margin goals, and your customers’ behavior.
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