Competitive Analysis for UX Design: Analyzing the Market Context

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Diana Woch

Updated May 28, 2024 • 20 min read
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Businesses looking to stand out in today’s crowded digital landscape must have a comprehensive understanding of their market context. As part of the UX design process, a proper competitive analysis digs deep into their competitors' design choices.

Founders, executives, and product designers might have a strong vision for how their platform should look and feel. This vision may be biased due to a range of factors, such as attachment to ideas they personally developed or difficulty putting themselves in the shoes of their user personas.

However, it’s also helpful to understand what other market players are doing and why they’ve made those design choices. What might they know about your target users that you don’t know yet? What can we learn from their mistakes?

In this article, we’ll discuss the benefits of competitive analysis in UX design and how to conduct one as part of UX research. We’ll also cover some useful data sources for gathering information about your competitors and a few key tips when conducting your competitive analysis.

What is competitive analysis?

In the context of UX design, competitive analysis is the process of analyzing the digital products as well as physical ones (and the overall business) of competitors for the purpose of gaining insights to enhance one’s own platform. This is an essential part of the UX design process because it helps companies understand the broader context of their product.

By analyzing competitors, businesses can differentiate their product and create a unique user experience. This includes identifying areas where there may be unmet user needs by looking at what the competition is offering, or not offering.

When conducting a competitive analysis specific to user experience design, it's important to take a structured approach. This involves identifying key competitors, gathering data on their products, examining their UX/UI approaches, and assessing how this all fits into their overall business strategy.

Teams can use a UX competitive analysis tool to gain insights into how their product stacks up against competitors. By conducting competitive analysis research, these insights inform design choices and the broader product strategy, providing an edge in today’s competitive market.

A comprehensive UX competitive analysis relies heavily on the identification of competitors. Here, we separate competitors into two categories: direct and indirect. Understanding the nuances of these two types of competitors is vital as it provides a wholesome view of the competitive landscape and user needs.

Pinpointing Direct Competition

Direct competitors are businesses that provide similar goods and services to the same or overlapping target market. They compete directly with one another for the attention and business of potential customers. However, understanding direct competition goes beyond knowing who they are. It involves evaluating and contrasting similar features among them, as well as considering direct and indirect competitors. This process, often facilitated by comparison charts, enables a clearer understanding of product offerings and their value.

Valuable information about a competitor’s branding, design choices, and marketing communications can be obtained by investigating their online presence, which includes websites and social media profiles. This information is critical in understanding the competitor’s appeal to the target audience.

Recognizing Indirect Competition

On the other hand, indirect competitors are businesses that offer different products or services but fulfill the same user needs, competing for the same target market. For instance, consider how Twitter introduced video hosting to compete with YouTube for user attention, despite being distinct platforms.

The recognition of indirect competition is vital in UX competitive analysis, influencing user perceptions and interactions with various products that may meet identical needs. This recognition also helps in understanding the market size and how a company positions itself within that market.

How to conduct competitive analysis

To create a successful user experience (UX), you must analyze the context in which the competitor operates and use that information to inform your own design choices. Let’s break down how to analyze the competitor’s context.

Step 1: Define your goals

Any UX research process, including competitive analysis, must begin with defining its goal (or set of goals). Otherwise, all your effort might not lead to actionable insights. Consider these questions:

  • Why are you conducting this competitive analysis?
  • What are your hypotheses, or what kind of insights do you think this might reveal?
  • Will this analysis have an impact on UX decisions?

Step 2: Identify your competition

The next step in analyzing your competitors' context is to identify who they are. Start by figuring out who your direct competitors are. These are businesses that offer products or services that are similar to yours.

Your process may also benefit from assessing indirect competitors, which could have a broad range depending on how you define them. What’s important is to apply your judgment to determine which competitors you could learn from.

It could be companies that provide a different offering but compete for the same target audience. They could be solving the same problem with a different solution. They might be targeting a different customer segment while using a similar set of features, or they might be using the same customer base while using a different set of features.

Step 3: Gather data on your competitors and their products

Once you have identified who your competition is, your team needs to gather relevant information about them. This includes researching, among others, their:

  • Products
  • Business models
  • Customer service policies
  • Pricing strategies
  • Design philosophies
  • Marketing tactics

Use a variety of data sources to collect information about your competitors' products or services, including their:

  • Websites
  • Social media profiles
  • App stores
  • Review sites
  • Industry reports

Examine their web and/or app design — including layout, navigation structure, content quality and quantity — as well as any other customer touchpoints such as emails or print materials.

We’ll go through some of the most important data sources for competitive analysis in the succeeding section.

Step 4: Analyze the data and identify patterns

Structure and analyze the data about your competitors to find patterns and trends. Be cognizant of which UX approaches are effective and which aren’t. This will help you identify areas where you may need improvement or generate opportunities for innovation.

For example, one of your competitors might have a superior customer service workflow compared to yours and the rest of the industry players. It’s worth exploring how they achieved that success so that you can adapt it to your product to better serve customers yourself.

Step 5: Identify areas for improvement in your own UX design

Lastly, use what you've learned from your analysis to figure out how you can improve the UX design of your platform. Be clear about the interventions you want to take. This could include improving the onboarding process, introducing new features, integrating accessibility, or reworking user workflows, among other things.

Data sources for competitive analysis

Basing your design choices on credible data sources is vital. It’s not enough to simply eyeball your competitors’ platforms and generate insights from there alone. When building your competitive landscape, consider the following data sources:

  • User reviews on app stores or review sites: These provide valuable insights into your competitors’ websites and apps, particularly their strengths and weaknesses.
  • Social media mentions and online communities: By monitoring your competitors’ social media profiles, you can gain insights into their marketing strategy and how they engage with their audience. It also tells us about their language, the keywords they use, and their tone. This is a great way to help you find your own voice for your written content.

Further, participating in social media conversations and online communities related to your industry or product provides a great way to stay on top of customer feedback and keep up with the latest trends in UX design.

  • Competitors’ websites, social media profiles, and other official platforms: Analyzing your competitors’ websites and social media profiles can give you insights into their brand identity, design choices, and messaging.
  • Industry reports and studies: Industry reports and studies are helpful for staying up-to-date on current trends in customer needs, preferences, buying behaviors, and more — all important considerations when designing successful user experiences in any field or industry sector.
  • Text and data mining: Text and data mining can greatly enhance a competitive analysis by automating the process of collecting and analyzing data from various sources. This process extracts insights from unstructured data such as customer reviews, social media comments, and industry reports.

This can help designers identify patterns and trends in their competitors’ UX designs, understand their target audience better, and identify areas for improvement in their own designs. Data mining can also help find key performance indicators of competitors and market trends and keep track of them.

  • User surveys: Surveying users of your competitor’s products can provide insights into their preferences, behaviors, and needs. This type of data is valuable for understanding how different demographics value features and prioritize tasks that relate to UX design.
  • Analytics platforms & heatmaps: Measuring usage patterns helps designers understand which parts of interfaces are used most frequently (and which ones aren’t being used at all). Heatmaps help to visualize these usage patterns, and are an important tool for identifying where improvements can be made. Applying these tools to the platforms of your primary competitors might be a bit advanced, but it will likely generate powerful insights based on what their users interact with the most.

Key tips in conducting competitive analysis as part of UX research

Product teams can get overwhelmed by this process. Here are some key tips when implementing a competitive analysis for your business.

  • Avoid the temptation to merely imitate successful UX/UI designs from competitors. Taking direct inspiration from other platforms without due consideration for your specific context or user needs can spell failure. Design is a complex process that requires in-depth understanding of your own problem areas, your customers, and your own contexts.
  • Decide based on criteria, not personal design preferences. When comparing platforms, organize your notes into criteria or specific areas of analysis. For example, which mobile app among your competitors offers the most seamless workflow during checkout? Which one requires the least data points in their online forms? Identify the specific areas you want to evaluate. Rather than relying immediately on personal design preferences, compare first how other apps are implementing them.
  • Usability testing is still indispensable. If you think that you can benefit from adopting (and adapting) a UX approach from a competitor, remember to ultimately listen to your own users. The only real way to determine whether a new design is successful, whether it was created by you or someone else, is to test it with actual users in real-world situations.
  • Identify benchmarks and track those that matter to your company. Based on the data you’ve gathered, identify UX benchmarks (e.g. app store ratings, completion rate, average time to make a purchase, return visitors, etc.). Not all of them will matter to you, but continue to track those that do. When you’re lagging behind these benchmarks or a competitor is pulling away, this might be a signal to revisit your conclusions from your prior competitive analyses.

What are the benefits of competitive analysis?

Why is it important to analyze the competition’s context? Here are the key reasons why you should conduct competitive analysis as part of your app design and product development process:

Understand user needs and preferences

Analyzing your competitors' products and user feedback can help you identify what users like and dislike about similar products. UX designers can use this information for further user research and ideation. While competitive analysis doesn’t necessarily speak directly about your users’ needs, it can inform you about how your competitors are trying to tailor to them — but this doesn’t mean that they’re automatically right.

Competitive analysis allows you to gain insights into user behavior, pain points, preferences, and expectations by studying how they interact with comparable products. With this, you can identify gaps in the market or areas where your product can improve upon existing solutions.

For example, if your competitor's product has a confusing navigation system that frustrates users, you could develop a more intuitive navigation system that makes it easier for users to find what they're looking for.

Identify opportunities for differentiation

Analyzing competitive products allows one to spot opportunities for improvement or innovation that can give one an edge over competitors’ offerings. By gaining an understanding of what works for others (and what doesn’t), UX designers can focus on developing creative solutions that enhance user experiences and set their product apart from competitors.

Competitive analysis helps you identify unique selling points (USPs) or value propositions that help you stand out in a crowded market and attract more users. By figuring out where your competitors are falling short or not meeting user needs, you can develop features or functionalities that address these gaps.

For example, if your company is designing a new ecommerce website, and none of your competitors offer third-party integration, multi-language support, one-click checkout, or any other feature uncommon to your peers, then this could be an opportunity for differentiation.

Learn from competitors’ mistakes

One of the key benefits of conducting a competitive analysis is that it allows you to see how users are currently interacting with comparable products. By analyzing customer feedback and reviews, you can gain insights into where your competitors fall short.

By looking at your competitors’ products, you can identify mistakes they have made and avoid making them yourself.

Suppose a banking company is developing a new mobile app and wants to ensure that its design and user experience are top-notch. To achieve this, the company looks at its competitors' onboarding process and identifies a common issue - a lack of clear guidance for new users. To address this, the company develops an onboarding process that guides new users step-by-step through the app's features and functionalities, making it easy for them to get started and become comfortable with the app.

Optimize design decisions

By analyzing market trends and patterns, you can make informed design decisions that optimize the user experience. This includes everything from layout and navigation to copywriting and visual design.

Competitive analysis provides valuable insights into industry standards, such as best practices for layout design or common navigational patterns used by other companies within the same industry. This information is helpful when deciding on how best to present information on a website or app interface so as not confuse visitors while still delivering an intuitive experience

When designing a new ecommerce website, a designer can look at competitors' websites to identify common design patterns and industry standards. By doing this, they may discover that most ecommerce websites have a shopping cart icon located in the upper right-hand corner of the website. This insight can help the designer ensure that their website adheres to industry standards and provides a familiar experience for users, increasing their chances of successfully navigating and using the website.

It’s essential for UX designers to stay informed on industry trends and changes in user preferences. By analyzing competitor products, one can gain insight into evolving market conditions and emerging user expectations, which could impact their product strategy.

Increase customer satisfaction

Creating a product that meets user needs and preferences can lead to higher levels of user satisfaction. This not only improves retention rates but also increases the likelihood of positive word-of-mouth referrals.

The ultimate aim of conducting competitive analysis in UX design is to deliver digital experiences that leave lasting impressions on end-users. The happier they are with their overall experience on any digital platform, the more likely they are to come back and recommend it to other people.

By incorporating feedback from competitor analyses into UX designs, you create experiences tailored specifically around what works best based on existing data. By meeting customer needs through this iterative process, you can improve user satisfaction, which ultimately leads to increased customer loyalty.

To illustrate, the owner of an online grocery store runs a competitor analysis, looks at customer service offerings and identifies an issue of personalized and timely customer support. To address this, the company implements a chatbot system that can quickly and efficiently handle customers’ most common, easy to fix queries and issues, as well as providing a personalized customer experience. Additionally, they add a loyalty program to its website, providing clients with incentives to shop more frequently and increasing customer retention.

Another key component of UX competitive analysis is tapping into market trends. Industry reports, AI-driven market intelligence platforms, and market research can provide insights into customer needs, and preferences, and help in spotting emerging UX design trends and market shifts.

In this digital age, text and data mining enable automation in collecting and analyzing data from various sources, identifying critical patterns and trends for UX designers. Some ways to utilize text and data mining for UX design include:

  • Collecting and analyzing data from various sources

  • Identifying critical patterns and trends

  • Monitoring design patterns and user interface elements across competitors

  • Utilizing tools like Google Trends to forecast future UX trends and preferences across different regions.

    Gaining Actionable Insights from Data

    Once you have gathered a wealth of data from UX competitive analysis, the next step involves transforming this data into actionable insights. This is achieved by organizing, categorizing, and prioritizing findings based on impact.

    Interpreting User Interface Elements

    The user interface is the visual gateway to your product, influenced by external factors such as layout, colors, typography, and micro-interactions.

    helps to identify what aspects of a competitor’s product are aesthetically appealing and functionally effective.

    Recognizing common navigation items and UI elements across indirect competitors enables the understanding of user expectations and unveils opportunities for differentiation in secondary navigation items. Usage analytics and heatmapping tools assist in determining which parts of the user interface attract the most interaction, offering insights for future UX enhancements.

    Understanding the User Flow

    Whether it’s an online store or a mobile app, the way users interact with a platform is a critical part of UX competitive analysis. Evaluating user interactions on competitors’ websites is an essential part of this analysis, as it helps identify areas for UX improvement.

    Comparing user journeys across different platforms involves:

    • Mapping customer tasks from start to finish

    • Pinpointing opportunities for enhancing the user experience

    • Using analytics to identify where users typically drop off or experience frustration

    • Informing how the customer journey can be optimized

    Making smarter design choices

A thorough and structured competitive analysis isn’t just a tool for benchmarking one’s overall business. Product teams can leverage this process as part of the user experience (and user interface) design process. When done properly, evaluating competitors’ platforms can provide actionable insights into what works and what doesn't, so you know where to focus your own efforts.

Their product strategies and design methods can help you improve customer satisfaction and achieve your business objectives. With the right sources of information, your UX team can spot trends and pick out relevant UX practices so they can make smarter decisions about your digital products.

If you want to stay ahead of the game and create a truly remarkable experience for your customers, understand the competition’s context. Rather than simply eyeballing your competitors’ digital platforms, take the extra effort to conduct a thorough competitive analysis.

In conclusion, mastering UX competitive analysis is a journey that involves understanding the importance of the process, identifying competitors, establishing analysis goals, conducting thorough research, applying research methods, gaining actionable insights from data, implementing findings, and finally, visualizing the competitive landscape. This journey, while complex, is a rewarding one that drives product success and enhances user experiences. So, buckle up and get started on your quest to master UX competitive analysis!

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Diana Woch

Diana has been into art and design ever since she can remember. She attended drawing classes since...
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