It’s important to know what your competitors are doing in order differentiate your shop from what they are offering. There are three questions essential to this exercise:

1. Who are your competitors?
2. What are their strengths?
3. What are their weaknesses?

When I first started sharing insights with my fellow retailers, Walmart was the biggest threat to independent shopkeepers in many communities. Their extensive hours and impressive buying power put many small town stores out of business. Those that survived often did so by offering specialized products and personalized service rather than trying to compete with the deep discounts and huge inventory of a big box store. 

Today’s main competition for most of us is Amazon, as well as other online businesses.  Their strengths include low prices, deep and varied inventory, fast delivery and 24/7 availability. Finding a niche market not covered by them is challenging. And of course they are omnipresent, available to anyone with a computer or smart phone.

Their weaknesses include the fact that customers have difficulty finding something they aren’t specifically searching for – unique offerings, handmade products, local specialties. Serendipity, or the joy of discovering something accidentally, is one of the main competitive strengths of brick and mortar stores. 

Amazon tries to offer personalized shopping by saying that people who like A often also like B – but this is based on mathematics, not emotion.  Being able to “read” what a customer is thinking and offer service based on human interaction also sets a real store aside from an online business.

But your competitive analysis should go beyond thinking of Amazon, online retailers and big box stores as eating into your market share. Where else to your customers go to shop? Is there a nearby town or shopping district that is more enticing than yours? Are people buying experiences rather than goods? Are there stores in your area doing a better job with their website and social media posts than you are? There are many lessons to be learned from this information.

When you get a chance to travel, either for pleasure or on buying trips, take time to visit stores in your category. While these stores are not direct competitors, it’s always good to be inspired by what others are doing well.

Happy Retailing,
Carol “Orange” Schroeder