How to compete with your biggest competitors

As a guide, more than 10 per cent of your business changes in a variety of ways every year. This is an important statistic because in today’s retail environment, if you don’t reinvent your store by at least 10 per cent each year, in just three years’ time you could be 30 per cent behind your competitors.

Change is a major stop on the road to survival. Remember Blockbuster Video? Everyone went to Blockbuster until Netflix showed up and offered videos for one low monthly fee – with no late fees – without requiring its customers to leave the house.

Netflix flourished and Blockbuster closed its doors because it didn’t keep up with the times. Borders Books stumbled and lost when Amazon’s low prices and Kindle device came on the scene.

That’s the 10 per cent change factor at work. If your store is to stay relevant you have to keep up with your competition, your customers, and the times. You need to know how your store stacks up when compared to your competition – because your customers are constantly comparing you to your competitors.

You probably know the old joke that’s relevant to retail competition: two hikers are out enjoying the day, when suddenly a large bear jumps from behind a bush and starts to chase them.

They’re both running for their lives when suddenly one man sits down to put on his running shoes.

His friend says, “Are you crazy? You can’t outrun that bear!” And the other hiker says, ”I don’t have to outrun the bear; I just have to outrun you!”

Here’s the thing: complacency kills.

How often do you mystery shop your competition – in person, online and on social mediums?

Monthly? Yearly? Never?

You may not be shopping your competitors but you can bet that your hungry competition is shopping you.

You can’t think your store is different and that it’s on target to withstand the test of time. Too many retailers think their business is immune to change. It’s not. No store is invincible.

Keep your enemies close

Shopping your competition is an exercise that needs to happen at least once a quarter, more often during holidays and other peak retail seasons.

Here are a few tips to assist in investigating your competitors:

• Make a list of everything you need to know about each store: When we mystery shop we carefully examine the operational categories in the store, and then rate each one on a scale of one to 10.

It is subjective, an opinion, but it’s a good one. Yours will be too.

• Determine where you stand in your marketplace: Send someone you trust to a public place in your neighbourhood to ask people if they can recommend a good jewellery store.

If yours is mentioned first, you have built ‘Top of the Mind Awareness’ – good job!

If you are not mentioned first, or worse, not at all, you have some work to do. You can also ask a friend to mystery shop your store. Your perception of how you are doing could be tremendously different from the customers’ perception.

We undertook this exercise with a retailer who thought his store was the ‘best’, so we took him to visit a new competitor’s store, and then came back to do the same exercise in his store. It was an eye opener; he realised how much work he had to do to bring his store up to speed.

You don’t have to do it all by yourself. If you are uncomfortable or may be recognised, send a friend or family member. You could even ask one of your loyal customers to visit the competitor for an appraisal.

However, some good advice is for you to occasionally visit the store just to say hello, and casually look around while you are there.

Another strategy is what we call the ‘How Did It Feel‘ exercise. Assign your staff to visit your various competitors posing as typical customers. Have them go through all of the steps outlined in this article.

When the staff member returns, ask them to document their visits, breaking down everything they experienced in each area of the store.

After each comment ask, “How did it feel?” You’ll learn what those competitors did well and where they fell down. Compare those findings with your own store.

Note your first impression: is the competitor’s store interesting from the minute you approach it? Are the displays and store windows compelling? Shoppers view your window displays in eight seconds or less, so they can’t be too elaborate.

The average shopper makes a value judgment about a store – positive or negative – in 10 seconds or less. Ask yourself, what vibe does your store present to potential customers? What happens just beyond the decompression zone – that is, the first 2–4 metres inside the front door?

Rate the in-store experience. Is it a fun place to shop or merely a place to ‘buy stuff’?

• Analyse the customer flow: Does the store layout create and control how customer traffic flows through the floor? A retail study found that 50 per cent of shoppers never see the entire sales floor.

Do customers linger in the store or get in and out?

Stop and watch shoppers; try to see the merchandising and customer service through their eyes.

Observe how shoppers enter the store, which way they go and why, plus what they look at, and how long they linger in specific areas, along with what they buy and return.

• Rate the overall appearance of the sales floor: Does it motivate shoppers to buy? What do your competitors do to highlight important product? Is the merchandise fresh or dated? Is the sales floor neat and clean? Are displays well maintained and dust free? Are they unique?

Where are the important basics and hot sellers located? Are displays merchandised as a destination product – think milk and eggs in a grocery store – or as impulse purchases? Are the displays clearly signed and is the merchandise clearly and competitively priced?

How does your competitor differentiate between full price and markdown merchandise?

Note where it is and how’s reduced. How is clearance product merchandised – is it in its regular department or in a special clearance area?

Does the store have signage and is it effective? Does it reinforce the overall feeling of the store’s brand?

Are signs well placed and legible and is there a standard format or are they handwritten and taped to fixtures?

You should also assess the perception of the store’s pricing compared to yours. Is the retailer trying to convey an upscale, quality service combined with a unique experience, or as a discount merchant?

Are the staff attentive to shoppers’ needs? Are there trained staff members available to help with difficult customer questions?

Put the store staff through their paces to find out if they possess specialised skills and strong product knowledge.

Online exploration

You’re not finished yet. It’s critical to visit your competition online, too. Check out each competitor’s Yelp business page and Google reviews on a weekly basis. Review yours, too.

Don’t have a Yelp or Google My Business page? You may have one even if you didn’t set it up because if a customer decides to review your store, that becomes your page. Claim it, and see what is being said.

When setting up the page, complete all the information fields, add high-quality photos, and respond to comments – good and bad. Monitor it weekly – or daily, if you are getting lots of reviews. And don’t worry about cost; Yelp and Google My Business are free.

Monitor the ‘Zero Moment of Truth’ – a term that describes the moment when a consumer researches a product or store online prior to purchase, or prior to visiting the location in person.

You should consider establishing an account with Mention.com and TalkWalker.com to learn what’s being said about your store online.

Both sites will email you a link each time you are mentioned, plus a link to take you to the comment. We have alerts set up for ourselves, our company, and everything else we want to monitor.

Meanwhile, Facebook Pages to Watch – found on your Facebook Page Insights – allows you to do an anonymous, automatic daily comparison with your competition’s Facebook pages. Your competitor will receive notice that someone is ‘watching’ their page, but they won’t know that it’s you.

Utilising these techniques will give you an accurate picture of where you stand in relation to your competition. It will allow you to see your store through your customers’ eyes and identify your strengths as well as weaknesses.

With that knowledge, you can develop new strategies to improve your existing customers’ experience at your store, as well as encourage new customers to shop with you instead of your competitors.