Strategic Marketing: How Retailers Gain A Competitive Edge
When retailers talk about points of competition, the first thing they often think about is price, especially when these retailers sell on the Amazon or eBay marketplace. That’s not surprising, because price is often the primary battleground among retailers that want to win over the customers visiting these online marketplaces. Prices on Amazon and eBay can be tracked with re-pricer software and used to adjust a retailer’s price points automatically.
However, engaging in price wars can be a fruitless effort. Even if merchants win and gain a few customers or sales, they still lose in that they are selling products for lower margins than they would like to.
In fact, some of the most successful retailers in the world opt not to compete in price wars: They look for other points of differentiation and capitalize on strategic marketing instead to win their customers.
Strategic Marketing Helps Omnichannel Retailers Create Differentiation
Take Apple, for example. Most items sold in an Apple store are available at the manufacturer’s suggested retail price, and it wouldn’t be unusual to find some products in discount bins or on sale at a reseller store. Apple, instead, competes by crafting a unique shopping experience with strategic marketing initiatives. The moment someone steps in an Apple store, they can tell it’s different than Best Buy or other electronics retail stores. Whether it’s the glass storefronts and minimalist decor or the attentive employees, customers often enjoy shopping in an Apple store.
Apple has refused to be involved with price wars and has proved their ability to charge premium rates and still attract business. However, for some online merchants, engaging in price wars may be completely out of necessity and risk of losing customers.
This makes choosing the battle ground even more important, and it may require some careful planning and innovation on the retailer’s part.
“There are plenty of other ways to set your business apart from the rest: assortment, price, availability, service and expertise,” Jessica Elenstar, Web content manager for the National Retail Federation, wrote on the organization’s blog. “Stores – both online and physical locations – have to become destinations for entertainment and engagement.” For example, each time Apple launches a new product, a shortage of quantity in stock creates panic for those who have yet to order and value for those that are the first to own it.
As retailers look to identify the ways they can differentiate themselves from other retail competitors, it’s important that they identify how to incorporate innovation, powerful branding, strategic marketing, and excellent customer service into their strategy and avoid price wars.