What sets your retail operation apart from the store down the block?
Finding and establishing that competitive edge can make or break your business.
Few businesses have no competition. Therefore, it’s part of most business plans to study and report on the competition. Whether this means carefully scouring their Web sites, reviewing their annual reports, or anonymously visiting their business locations, you should take notes on what you find and establish a database on both your direct competitors and your indirect ones.
Once you have the lowdown on their business, the amenities or services that they offer, and their pricing, you can begin looking for your competitive edge. In short, ask yourself what you can offer that your competitors cannot.
There are several areas to evaluate when looking to build a competitive edge:
- The target market. Do your competitors pursue all of their potential customers? Is there an age group or demographic audience to whom they do not cater adequately? Perhaps they have a wealth of furniture but nothing for that “tween” or teen audience who are beyond the kiddy beds. Look for gaps in their demographics.
- Pricing. Beating your competitors’ prices is always a way to hook customers. However, it may not keep you in the black. You can only beat prices if your overhead is low enough to make it work. Therefore, you need to evaluate where you can cut corners. Special sales on hot items can be a more attractive option than always trying to beat the price of your competitor. To learn more about this, read How to Price Your Store Merchandise.
- Convenience. People want things quickly. If you can find a way to expedite the sales process without compromising excellent service or the quality of your products, then you may be able to use this as your edge.
- Service. Many small businesses beat their big-box competitors with personalized service. Customers are typically willing to pay a little more for personal attention. Consider where your competitors are lacking on a customer service level and do it. Often this is more a matter of creativity, common sense, and good old-fashioned courtesy than it is a matter of expensive technology.
- Promotions and Buyer Incentives. What better way to show up the competition then with great promotional events and buyer incentive programs? Build a reputation for entertainment and generosity. Also, giving back to the community can enhance your reputation and give you a competitive edge.
Of course, none of the above will work if you do not know your customers. Therefore, market research is imperative. You need to know who frequents your competition and what they want. Are they looking for lower prices? A higher quality of personal service? Convenience? In the process of conducting your own research, use surveys and questionnaires to determine customer need. Additionally, you will need to monitor your competitors as their businesses grow and evolve. You can then determine which changes you will react to and which ones you will not, since maintaining a competitive edge means evolving with your competitors.
Finally, when you find your competitive edge, promote it!