How to start a delivery service: Completing a competitive analysis
Interested in starting a delivery service for your business? Learn how to complete a competitive analysis and hit the ground running.
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This article highlights one of the most important exercises any business owner interested in starting a delivery service can conduct: competitive analysis. A competitive analysis provides valuable insight into the existing market, the consumers served by that market, and opportunities to gain traction as a newcomer to that market. We’ll walk through the basics of a competitive analysis, outline a four-step process for completing one, and provide tips to ensure it remains current as both the market and your business grow and evolve.
What is Competitive Analysis?
Competitive analysis is the process of researching and analyzing the strengths and weaknesses of competitors in a particular market. It involves gathering information about competitors, including their products, services, strategies and positioning, and using that information to make informed decisions about how to effectively compete with them. A robust competitive analysis ensures entrepreneurs have concrete data, market knowledge, and actionable insight in order to build a successful business.
Conducting a competitive analysis is an essential task for any business owner. A thorough competitive analysis will provide a complete picture of the industry you intend to enter, and provide answers to key questions in three areas that can help your business thrive:
Market Awareness: What competitors already exist in the market and region? How long have they been established, and how big of a threat are they?
Consumer Values: Who are the target consumers in this market? What features or product offerings appeal most to them? What causes consumers to choose my competitors over another similar option?
Strengths & Weaknesses: What works well for my competitors that I can copy? What doesn’t work so well that I can improve upon and exploit?
What Data is Included in Competitive Analysis?
As more information is added to your competitive analysis, a greater understanding of the market begins to emerge. Some of the key data to focus on is listed below:
Owner, CEO and/or individual in charge
Social media pages (Facebook, Twitter, LinkedIn, Instagram, YouTube, TikTok, etc.)
In-house delivery, or outsourced to a third party?
Vehicle type(s) used for delivery
Delivery service(s) used (courier, UberEats, postal service, etc.)
Delivery zones or areas served
Delivery types offered (same day, next day, scheduled, etc.)
Additional fees for any delivery type listed above
Competitor’s Go-To-Market Strategy:
How are they finding new customers?
What sets the competitor apart?
Why do customers choose this competitor over others?
Now that we've identified many of the different types of data to include in your competitive analysis, it's time to start organizing and researching. Follow the four steps below to create and start populating your competitive analysis.
1) Create a spreadsheet to track your data
In order to organize all of the data collected through the competitive analysis process, a basic spreadsheet can be used to track information for all competitors in the market. Each competitor will be listed in their own column, with rows comparing and contrasting different aspects of their businesses:
Any additional details you uncover through your research that will broaden your understanding of the market will help improve the depth and quality of your competitive analysis - add more rows to the spreadsheet to compare additional aspects of your competitors’ businesses beyond the list above.
It may also be useful to add an additional “Notes” field for each competitor to store pertinent information that doesn’t fit under any of the other data types mentioned above.
2) Research your competitors online
One at a time, Google each of your competitors, adding any relevant data to your spreadsheet as you go. Some of the data types listed above may be difficult (or impossible) to find for certain competitors, so include any information that’s readily available. A few suggestions:
Take a look at competitors’ corporate websites, blogs, social media channels, storefronts and listings on third party delivery sites (such as UberEats or DoorDash, if applicable) to gather as complete a picture of their operations as possible.
Add some of their products to a cart and see what their checkout and scheduling workflows look like - are there any surprises or additional fees for delivery that aren’t described elsewhere?
Large-scale competitors may be required to post financial statements or other regulatory documents that can be accessed publicly online - if available, use these to gather multiple data points from one highly reliable source.
3) Gather real-world customer feedback
A competitor’s fundamentals only provide a slice of the information required to effectively compete with them. Where possible, seek out feedback from past customers who have ordered from your competitors: find out what they liked, what they didn’t like, and any areas for improvement you can incorporate into your own business to appeal to potential customers. Some tips to help with collecting real-world feedback:
Scroll through a competitor’s Google or Yelp reviews and identify the three primary complaints and compliments that business receives most frequently.
Check for any feedback directed towards your competitors - via comments, tags, or posts - on their social media channels. Is the feedback mostly positive or negative, and how do they respond to it?
Speak to people in your personal and professional networks that have relevant insight, or those who may have previous experience ordering from any of the competitors you’ve identified. What has their experience been with your competitor, and what would they like to see improved?
4) Keep on top of industry trends
A completed competitive analysis represents a moment in time: a snapshot of the market when the research was conducted. Competitive analysis is a continuous process as the business environment is constantly evolving. Staying on top of what’s happening as the market evolves can help you anticipate shifts and adapt your strategy accordingly. Here’s a few suggestions for maintaining a current competitive analysis:
Whenever a new competitor enters the market and begins to attract customers, create a new column in your spreadsheet for this competitor to maintain an accurate and evolving competitive analysis.
When existing competitors update their product offerings or pricing structure, update your spreadsheet to reflect this data, as well as any customer reactions that might inform or update your strategy.
Monitor your competitors’ social media channels, websites and blogs for product announcements or any other updates that may influence your approach.
Keep an eye on industry trends and how your competitors respond to them. What starts as a viral TikTok may end up driving consumer demand for a particular product or service. Even if temporary, these trends could lead to increased sales and opportunities to convert first-time buyers into repeat customers.
A comprehensive competitive analysis will help guide you through the complexities of the market landscape, shedding light on existing competitors, consumer preferences, and untapped opportunities. By undertaking this critical process, you gain invaluable insights that are fundamental to building a successful business.
In a world where change is the norm, staying informed and adaptable is essential for success. Your competitive analysis is not a static document; it's a living resource that should evolve with the market. As competitors emerge, products change, and trends come and go, your well-maintained competitive analysis will be your compass, guiding you toward making informed decisions and achieving sustained success in the dynamic delivery landscape.
Stay on top of the competition with EasyRoutes
Stay tuned to the Roundtrip blog for more tips and step-by-step guides on how to start a delivery service for your business. Ready to save time, delight your customers and simplify your local delivery process? EasyRoutes is available to install from the Shopify App Store, offering a 14-day free trial to test out all its features and functionality. Feel free to contact us if you have any questions about how EasyRoutes can play a role in streamlining your delivery operations - we’re here to help!