Great retail marketers know their market. What makes the difference is how well they know it through the eyes of their target customer. To effectively differentiate in a crowded market, retailers need in-depth knowledge of how their business stacks up against the competition.
To make the most of benchmarking activities, retailers need to return to their key strategies and establish a framework to compare their performance and their most significant competitors’ objectives. Where possible, benchmarking should include data that establishes a way to gauge the target customer’s perspective, preferences, and behaviours about those objectives.
The ARA Retail Institute runs multiple workshops on retail, planning and strategic management. Join the ARA Retail Institute in their latest workshop which looks into how to analyse merchandise performance results and follow an organisational strategy to plan and enhance ongoing merchandise performance.
It is generally straightforward for retailers to gather quantitative data on their business performance; it may be challenging to do so for competitors. However, the Australian Bureau of Statistics (ABS) and peak industry bodies do carry out industry sector research that can be of value.
Relevant benchmarking data may include measures such as:
· Market share in specific categories and key product lines
· Share of advertising voice
· Brand awareness
· Customer loyalty
· Market advantage
Market advantage is the competitive edge a retailer has that affords their business a somewhat exalted status in the minds of the target customer. Businesses with a market advantage are understandably in a highly coveted position. It is for this reason that retailers invest time and energy into developing strategies to enhance their market advantage.
Reviewing the activities of competitors is one way to develop knowledge that can be applied to enhance the market advantage of a business. An analysis of the market position of competitor’s relative to your business can also provide insights into the factors behind their performance.
When clarifying market position, it is essential to:
· Establish the business point of difference
· Attraction – the provision of values and attributes target customers desire
· Distinction – the provision of values and attributes target customers receive exclusively from that business
· Define which customers the business services best
· Understand how target customers perceive the business offer
Doing this from the perspectives of key competitors allows insights into positioning that can be compared to that of your business. If done well, the result can be clearly highlighted advantages of each business under examination.
For newly established retailers and those facing the need for reinvention, this is a valuable activity and one that can prompt strategic change to market position to facilitate a more advantageous comparison to competitors. Bench marking market position against competition.
About ARA Retail Institute
ARA Retail Institute is Australia’s leading retail training provider for both accredited and non-accredited learning programs. For more information, please visit: www.retailinstitute.org.au