In retail warfare, knowing your enemy wins points

The retail landscape is seeing some interesting seismic activity, globally. The consumer is changing, and so are his habits, choices, likes and dislikes.

With the economies of the world the way they are now, savvy consumers, who are very aware of what’s going on in the market place, no longer have to worry about their choice, because they now have plenty of choices. Whether it’s fashion, food, a commodity or whatever, unless you are very unique in what you’re selling as a product, you won’t be able to survive in the market for long.

You have to be a key differentiator and be clear for what you are standing: are you standing for your product? Or your customers? Or will that be for costs?

Customers know more and more about market conditions, particularly when it comes to the ups and downs of the economy. So they become instantly aware of the value equation, which comes into play in a big way.

Consequently, they will shop around, compare prices and evaluate what value they are getting by going to this or that retailer. Every retailer must be able to gauge his environment that he is — or will be — operating in … whether it is the geography, lifestyles, customs, climate, infrastructure, legal set-up, etc.

When you go into a market or already in, or whether going into a new market, you need to be aware of who you’re competing against. At this stage of the strategic plan, retailers make some serious errors, because they actually define their competition way too narrowly.

It is critical for any business to know what their competition looks like. They need to know what they are up against.

For example, if you’re a department store, your competition is not just the other department stores; your competition is the internet; your competition is a collection of different speciality retailers; your competition is the mall down the road.

All of these are competitors to a department store, but so often, a department store would just worry about who the other department stores are. Meaning, they haven’t properly defined who their enemy is. And that could make all the difference.

After you define your competitors, you need to gather a lot of data about them. You can’t simply say they are just your competitors. You have to look at certain characteristics, such as the areas in which they are strong. Or even the ones that they are weak in.

Your own strategy may end up being directly dependent on this.

You have to know your enemy, you have to get behind enemy lines, you have to find out as much about them as you can. Legally … of course. In addition, there might be people working within your organisation who have worked for some of these competitors before.

Talk to them, find out what sort of things they have to say about their past workplace. They may turn out to be your best bet — as they will be able to clearly and accurately identify the plusses and minuses in their past vs their current set-up.

Research about how they do some of the things that you’re perhaps weak in. Recognise what their strengths are, relative to your strengths. Look specifically at the areas where they are winning and get into that kind of detail, as much as you can.

Doing your homework well is winning half the battle here …

If you think about it like a game, like American football or rugby, you can try running into your opposition head-on. But the fact is, that’s a really, really good way to get hurt.

Or, you could run alongside your enemy and use your momentum and their movement to actually knock them off balance, much more easily than by hitting them head on. A side-on bump is always going to be more effective than a head-on collision, in terms of disrupting the market.

Last, but not least, even more important than knowing your enemies is knowing yourself.

Keep in mind analysing their strengths relative to your strengths. For instance, you’re a retailer trying to compete with Wal-Mart. But Wal-Mart is huge.

Are you going to be able to buy better than Wal-Mart does? Probably not. They would probably have an economy of a scale that you can’t leverage.

Therefore, you might not be able to beat them directly on prices on every item, but you might find areas where they’re a little bit vulnerable. If you go in there in those specific areas, and highlight that you can do things cheaper, that you can do things better, and what things you can do better than they do, you’ll turn yourself into a winner.

Remember: don’t tackle them head-on, but find out how you can knock them off balance.

Every retailer needs to know the game they will end up playing. Play by the rules and play well.

The writer is a Partner — Leadership Transitioning with Stanton Chase Middle East, ranked in the Top 10 executive search firms in the world.