According to Entrepreneur Magazine the definition of a competitive analysis is " Identifying your competitors and evaluating their strategies to determine their strengths and weaknesses relative to those of your own product or service" In other words who do you see as your competitors and what makes you stand out from your customers.
I always tell new clients the first step is coming up with your USP (unique selling proposition). In order to know the answer, you need to study at least 3-5 companies that your customers shop from and figure out your competitive advantage. So identifying these competitors is your first step.
The next step is to study them extensively. It is important to know what their range of products are and what services they offer. You want to have a clear understanding of their product, what their prices are, what fabrics they use, and how do they produce. This will help you determine your prices. If they are selling shirts at $50 you don't want to sell yours at $100 unless you are giving your customer extra value to justify the increase in price.
Then you need to study all their marketing. How they market? What types of content creation do these companies they invest in. Do they advertise, post on social media, or dress influencers? How do they communicate their brand message? Knowing this can help you determine what opportunities you have to help outperform your competitors. What types of content creation do your competitors focus on, a blogging, content marketing, or influencers?
Having insight your competition will help with determining your demographics and psychographics of your end consumer. The 2 places I use are Alexa div of Amazon. You can input the companies that are your competition and they will show the demographics for the brand. Facebook does the same thing. However, one caveat if the competition is too small a company it won't show up.
The main reason for doing this analysis is finding out where the opportunities are for your brand. I have a client that was came up with a brand name that he thought would be successful. He wanted to do yoga wear. Unfortunately, through a competitive analysis we found that he was in a very crowded market and he did not have anything different to give the customer a reason to buy the line. He was profoundly unsuccessful when all he had to do was tweak his concept a bit and invest in a decent marketing plan and he would be successful today.
This article was written by our guest blogger, Maria Pesin. Her company, Vibe Consulting is providing essential tips and tools for serious fashion entrepreneurs. More information: www.vibeconsulting.co