October 26/November 2; Volume 30/Number 10
By Lisbeth Calandrino
Most of us spend little time looking at our competitors’ stores or their brands. Instead, we listen to what our customers say about them and are calmed by their complaints. But don’t get lulled into thinking these customers won’t buy from your competition. The customer who complains about your competitor and then tells you she will be back may in fact be returning to your competitor for a second look. Maybe your store is the one that looks lame in comparison.
I consider any flooring store that has been in business for a number of years and has shown stability in the marketplace to be your competition. The business that steals customers by selling below wholesale is not a competitor; this business is a fool. Eventually, selling below wholesale will only attract cheap customers. The retail landscape is littered with dead bodies that have subscribed to this strategy in the past.
The more successful we become, the less likely we are to review our competitors. In the beginning we look for ideas that we can use to help us grow our own businesses. But once we feel like we’ve made it, we stop looking; we now think we set the standard for our industry. Because of this philosophy, we believe we are untouchable.
Consider that Circuit City was originally credited with starting the electronics superstore and had 600 stores before its close in 2008. It could never out price Best Buy and eventually became history. As we’ve often heard, neither success nor failure are guaranteed.
You don’t have to shop your competitor weekly, but here are some things you can do:
- Sign up for your competitors’ mailing lists. After a few months you’ll know what they are selling and for how much. Once you get the scoop, rather than sell the same product for less, just don’t sell it. I know a successful flooring retailer who cut out all of the products his competitors carry and now only sells high end products that aren’t well known. He says it’s better than trying to compete on price and it works.
- Sign up for Google Alerts. What are the trends in your industry and what is happening in other industries? Become a lifelong learner and stay up to date. Who knows more about trends and people than Google? If it’s out there, Google will be reporting it.
- Keep up with technology. Consider what happened between Kmart and Wal-Mart. Both opened in 1962 and by 1963, Kmart had 62 stores while Sam Walton was opening his second location. From the beginning, Walton invested in technology. He tracked everything about Kmart, forged his own strategies and eventually outsmarted his competitor.
Trends in technology continue to determine business success. If you don’t keep up with it, you are giving the advantage to your competitors. Find out what your competitors do and see how it can help you. Are their technologies easier to use? What are the difficulties? What are they doing that would improve your operation?
- Stop wasting your emails. Many business owners tell me they don’t know if they should ask for an email address because they feel it is intrusive. It reminds me of the 1980s when retailers felt they shouldn’t ask for a customer’s phone number.
Every business has a list of sold customers. But sold customers are worthless if they are kept in your computer or, even worse, on a paper invoice. It’s impossible to keep up with your competitors if you don’t keep up with your customers. Smart retailers are working with companies that can provide them with quality written emails as well as an automated way of sending them out to past customers.