Focus sur on your competitors
You’ve got all your ducks in a row and a shop that’s doing well. But you’re worried about a new competitor nearby. Admittedly, competitive pressure is always there, and it’s definitely something to keep in mind. Because no matter how you look at it, a competitor in the same location is going to want to attract some of your sales and customer potential.
But don’t panic just yet, because a direct competitor can also give you a turnover boost: after all, a competitor generates traffic. In other words, a competitor has many faces, and not every competitor is actually competitive. Another benefit is that competition keeps you on your toes. And remember, competitors are proof of the existing market potential.
Through various parameters and targeted analytical models, you get a good picture of your shop in its current configuration. How much turnover do you generate in normal circumstances?
How much customer potential is there in your area? Can you take advantage of the brand name or additional traffic builders in your area?
In summary, know what to expect from your shop and ask yourself as a retailer how you can deliver the added value that sets you apart from the competition. Retail is not an exact science, but that should not prevent you from regularly screening and updating your shops, both at the product and customer level, and even location. If you know the value of your shops, you also know the value of your competitors.
The world of competition has changed dramatically in recent years. That’s understandable, because the way in which retail reaches and serves its customer base is constantly changing. In this regard, think of the entire Internet, which is open to all kinds of providers. But let’s stay focused on the competition of physical locations. It definitely makes sense to see exactly what those competitors are doing and why their customers are choosing them.
So, first find out who your competitors are. Are they direct competitors who sell the exact same thing, or are they indirect competitors who are providing the market with an alternative? Or another option, is there internal competition in which fellow shop managers are competing with each other? In quite a few sectors, there is a high degree of cannibalisation between the various shops of the same retail chain.
Are they direct competitors who sell the exact same thing, or are they indirect competitors who are providing the market with an alternative?
Competition is a tactical element that – depending on the sector – can be played out in many ways: a competitor for one is an ally for another. After all, you can also use your competitors strategically to improve the mutual competitive position – car dealers do it, and the same goes for kitchen shops and fashion shops. With the right neighbours, you’re safe, because you attract visitors with different profiles and complementary buying motives. Read more about Dividuals consumer segmentation.
In any case, it’s in your best interest to describe the competitive pressure as thoroughly as possible. A careful screening of competitors and target groups will help you start based on your own strengths. Based on the correct data and the necessary model calculations, the geomarketing experts at SIRIUS Insight can estimate the strength of the competitors, and, if desired, estimate a new projected turnover.
What gap are you filling in for your potential customers? This crucial question is more important today than ever. Because the time when people just went to the shop to buy a product is over. Retail must evolve along with the change. If you don’t, then you may be trampled underfoot for years to come. Especially in times when consumers are less loyal than before.
It’s simply a fact that in 2022 you can no longer wait five years to renew your shop, reconsider your range or review your target group. As a retailer, you’ll always have to be creative and respond quickly and intelligently to market trends and developments. But don’t be fooled: if you invest and innovate based on what you see in the competition, then your range will increasingly look like that of the competitor, and as a result you will lose your distinguishing factor.
The number of points of sale in Belgium may have decreased in the past decade, but the shop floor area has increased more strongly, together with a wider range. This can also cause a problem with your competitor: if they have a larger shop with a much larger range, they will be able to convince customers more easily on their shop floor. If you’re considering expanding or renovating your shop, or you want to know what impact the changes have on a competitor, SIRIUS Insight can guide you with an up-to-date and accurate turnover calculation, so that you can make the right strategic decision.
Put all the strengths and weaknesses in a matrix so that you can easily determine the competitiveness of your shops: what is their distinctive ability and what opportunities in the market can they respond to.
Belgium has a wide range of shopping possibilities, ranging from shops in the city centre and strip malls to shopping malls, retail parks and solitary locations. Where and how is your competitor located? What is their target group? In what way are they trying to differentiate themselves? And what consequences does this have for you? It’s simple, as long as you look at your own figures and see that your shop is still doing fine, there’s no need to panic and make hasty decisions. However, if you’re seeing a downward trend, then you know there is a problem with your shop. That problem may have already been there; the competition has only made it worse.
And remember: a new competitor doesn’t always have an impact, and more importantly, a competitor can also be good news. For example, business clusters have a strengthening effect, or you can take advantage of a competitor that generates extra traffic due to their reputation. It may also be the case that your competitor is too far away from you: in urban areas, a competitor 1 km away may be too far away or appeal to a different type of target group.
It’s definitely a good idea to visualise your competitors – including their sales area – on a map. This way you not only keep your finger on the pulse, but you know where you stand and what you have to take into account. Investments may be needed to strengthen your market position. SIRIUS Insight can put you on the right track with an objective turnover and risk assessment.
SIRIUS Insight supports retail and marketing managers in the most efficient way in making their strategic geomarketing decisions. We offer innovative insights – with a unique look at customers and channels – to create benefits for our customers in optimising their marketing and sales. You can count on our support for:
