Competitive insight, you need it, and your competitors have it.
While attempting to achieve the largest available market share in your retail business niche, you gain some competitive insight. Even a fledgeling business places itself in a broadly competitive position against its immediate competitors. At the same time, you can be very sure that competitors are doing the same thing, however, the better the intelligence and the response to that intelligence, the better the return on investment in competitor monitoring.
Competitive insight, what is it?
Precisely what it says, insight into the practices of the competition. The primary target of competitive insight is usually finding out your competition’s pricing strategies and how to provide a better deal or a better product for an excellent price. However, it is vital to understand that price alone is not the sole focus of competitor monitoring.
Competitive insight can assist a retail store, whether on or offline, in competing with their known competitors, discovering new and upcoming contenders, and also finding out if they are genuine competitors or pretenders that can be easily surpassed without costing a significant chunk of profit margin.
While you may begin your investigation into your competition with the price at the forefront of your mind, competitive insight is so much more than finding our your rivals prices. The following are almost as important when it comes to deciding who your real competitors are and how to combat their effects on your profitability.
# Availability
# Customer service
# Deliverability
# Quality
Price comparison: Is cheaper always a better deal?
As price is the most commonly researched comparison point between retailers, it is a crucial focus of competitive insight. Effective price monitoring of competitors is a dynamic process that requires almost continuous attention. Some of the most effective competitor monitors are online giants, such as Amazon and Ali. It is vital to place pricing as a priority when monitoring the competition. Irrespective of beliefs, values, quality demands or standards, the price will always be a primary deciding factor for your customers.
Insight #1: How you compete, which channels, which locations, and what your lowest possible sales price can be. Trying to compete on a level that is less than profitable is a path to guaranteed failure.
Strategic Pricing Models: It’s not only how low you can go, but also when and how you do it.
Pricing strategies of competitors are almost as important as the price at which they sell their identical or comparable products. How your competitors time their flash sales and discounts, as well as the structure of their ‘full-price’ rates, will shape how their clients (and potentially yours) expect to have their needs met. Pricing strategy competitive insight requires an understanding of both of the competition and the market in which you are delivering, i.e. the customer base.
Insight #2: Strategic pricing models that don’t reflect the customer needs are going to benefit your competitors who have the right strategy for the clientele.
Available right now or in a while?
Availability will influence the sectors of the market you can afford to engage. With the right tools, you can analyse the product availability of your competitors and decide whether they are genuine competition or if you can outperform them in providing the product.
However, in a contrary fashion the better the personalisation of the service or item, the longer a more discerning customer is willing to wait.
Insight #3: Urgency and the need for immediate access to products can determine the price that customers will pay. A retailer that can provide same day or next day delivery or access can demand a high price at checkout than a retailer that will take more than three days.
A Customer-first approach
Delivering a superior service with the products you are selling can determine the benefit your customers receive for a beneficial price. Providing excellent content to your website in addition to your product pages can increase customer engagement and increase the rate at which you can remain competitive.
It’s not just about how you deliver your products; customer service is a holistic approach and doesn’t always result in sales. However, the customer experience is enhanced, and their appreciation is more likely to be something they will share.
Insight #4: Selling a product isn’t everything, selling a customer experience, and imparting knowledge enhance the value of the product you provide.
Delivering on your promises
While deliverability does apply to the distribution of the purchased products; it also encompasses the delivery of the service too. You can proclaim to deliver the next working day (specific circumstances will apply), but if your actual next day delivery rate doesn’t reflect your claims, you can be sure that customers will have something to say about it. Moreover, your competitors will use it against you directly or indirectly. In the same way, you can use the poor performance of your rivals to your benefit.
Insight #5: Customers will complain about broken promises before they praise fulfilled ones. Competitive insight into your rivals will show up their weaknesses first, but your weaknesses will show first too.
Added Value and Perceived Value
The quality of the products is an important benchmark to understand. While other retailers may obscure the origins of their supply (the omission of EANs and GTINs from their online catalogue), there are significant chances that you and at least some of your competitors are selling the same items. However, there will be differences in the pricing of a product depending on the business model, pricing structure and overheads with which different retailers have to contend.
Insight #6: The cost from a supplier may be the same for several competing retailers, but the added value and perceived value that each retailer gives to an identical product will dictate the price their customers will be willing to pay.
Pricing Target Fixation
It can be effortless to slip into the mindset that everything about competitive insight is about price. It’s an understandable conclusion; everything about the success of your retail business is about increased revenues, profits and sales, which eventually all boil down to the price that customers pay.
While the bottom line is what will define your business success it is dependent on the methods you use to claim your share of the customer base. It is widely acknowledged that continuously engaging in a race to the lowest price; if it is so cheap, there must be something wrong with it.
