The world of retail has changed and those who do not adapt will likely go out of business. Retail has become more challenging and simply opening a shop and expecting customers to walk in will no longer work.
The world of retail has also become a lot more competitive. The businesses that win are the ones that have defined their competitive advantage, what makes them different, and use this to rise above the competition.
Think about what makes you different? What is your retail store famous for?
Unless you are a big box retailer, it will be hard to win on price. Therefore, you need to compete on something different, like the customer experience, product range, product knowledge or product flexibility. Often you want to stand for more than one capability. For example, JB Hi-Fi is famous for their “perceived” cheaper prices but also have a large product range.
In considering what makes you different, it is essential to analyse your competition. You may want to be known as the biggest and cheapest retailer in your industry but if there are two other retailers who are already famous for this, it is not the area to differentiate yourself. Coles and Woolworths are examples of two grocery chains who are currently going head-to-head with a similar competitive strategy and points of difference. This strategy is a lot more challenging and be costly to win.
Conduct a competitive analysis on a regular basis. You want to understand what your competitors are doing and when they are doing it. Gaining insight into your competitors’ strategies, strengths and weaknesses is a great way to better understand your own.
The Australian retail climate is becoming more global and retailers need to have a clear point of different to win or even survive.