It is important that I know my competitors and keep an eye on them. But do you recognize and know all your competitors? It’s not as easy as it sounds. Far too often the competitors are chosen from a gut feeling. In addition, you don’t compete equally with everyone. For example, not every competitor has the same categories or follows the same trends with his assortment.
Since the market is constantly changing, we have divided the competition into 4 categories:
Direct competition is the most classic type of competition. These are companies that have the same target group, almost the same assortment depth and structure, and that also pay attention to what they are doing themselves. One acts and reacts and has the direct competitor constantly under observation. Of course, the overlap is not 100 percent, but usually there is an overlap of more than 50% of the assortment in direct competition. A good example in such a case is Esprit and S.Oliver from the middle market segment.
The indirect competitors are companies whose strategy should be partly comparable with their own, but not in all points. For example, the collection is very similar, but the prices are very different or you have the same target group, but you differ from the assortment or you follow different trends. However, you are still in competition, because the customer has only a limited budget. You can see such a case, for example, with Vero Moda and Orsay. Orsay only supplies fashion for women. Vero Moda, or the Bestseller Group, also offers men’s fashion (Jack & Jones). They are direct competitors in women’s wear, but not in other parts of the range (e.g. men’s clothing).
The partial competition is very similar to the indirect competitor, but differs in that it only competes with itself in a few categories of its assortment. For example, if you sell fashion for women and men and a competitor only sells fashion for women, but then also specializes in dresses, blouses and jackets. A full-line retailer therefore usually has more competitors than a specialised company. OTTO should look out for many more competitors than Lascana. OTTO has a much wider product range and a much larger customer segment. On the other hand, Lascana has much less room for manoeuvre and must always play to its strengths.
The shifting competition is one that is hard to grasp. These are companies that are usually not regarded as competitors, but in the worst case, snatch away customers unnoticed. For example, Bonprix might think that P&C (Fashion ID or Van Graaf) is not a competitor. But if we compare Bonprix and P&C with OnSight, our Market Intelligence solution, and mainly consider their sale products, then the competition is quite different: In that case, P&C would even be a direct competitor of Bonprix.
Although the market is constantly changing, you don’t have to watch the changes every day, but losing sight of them can be expensive. At regular intervals, we check in different variants who is competing with whom and how strongly, and who is influencing whom and how much.
Here is a screenshot between my demo shop and Wenz as an example: