Understanding customers and assessing competitive advantage online

ipad-820272_1920.jpg When shopping online, the majority of retail customers have different expectations than they do of a physical bricks and mortar shopping experience. However, their expectations of online are often informed by offline shopping; Fast and free postage, hassle free returns process, straightforward transacting and prompt customer service when required.

The ability of retailers to track and interpret customer behaviours in an online environment is a key element of their success. Behaviours, attitudes, and personal preferences all impact the decision making process that each customer goes through. Understanding the online customer needs to be a priority, in additon to undertaking a process to ascertain your point of difference and gather tangible data on their relative strength against their competition. 

Customer Attitudes

Attitudes are personally held beliefs and values that influence behaviours. If a retailer can track the attitudes of target customers, then they can shape brands to represent these values and beliefs.  

Building relationships with customers involves complex factors, such as trust, commitment and reassurance. Developing these depends on how well a retailer can track and respond to shopper attitudes. The attitudes of online customers may be different to those of customers in physical locations.

The online experience has to reinforce brand attributes that focus on:

  • Product and service features
  • Functionality of the web presence (ease of access, navigation and payment methods)
  • Customers’ emotions, including trust and the belief that the transaction is secure and supported by competent staff.

Good brand management includes determining the relative importance of these factors for different products and services, across different customer groups. The online strategy is a new way to place the brand and offer a value proposition to customers.

Assessing competitive advantage

In order to effectively assess the competitive advantage online it is essential to benchmark industry best practices that lead to superior performance.  

Before reshaping or creating an online brand it is key to find out which of your competitors have the best value, how they promote their brands and position themselves online.

Steps to assess competitive advantage are as follow:


  • Determine the critical factors that yield sustainable market advantage for the brand, given the customer target
  • Identify the competitors critical advantages (data collection and analysis)


  • Identify best practices within the current brand strategy
  • Identify gaps between the current strategy and the competitor


  • Profile a successful brand strategy (especially determinants of that success, such as customer attitudes)
  • Identify performance measures and indicators
  • dentify current capacity (especially training and resources)

Following this process can help retailers to ascertain their point of difference and gather tangible data on their relative strength against their competition.  

Many retailers are taking steps toward launching online, shifting an existing business online or developing a multichannel presence. This is largely motivated by the uptake amongst customers of online retail shopping and the perceived benefits to business of operating online.  
To be successful online, retailers need to understand the fundamentals of retailing and how to effectively manage their brands in the online space.

Looking to gain an edge in online retail? The ARA Retail Institute provides leading accredited training options including the Diploma for Retail Management (Multichannel).




Find more information about the services provided by The ARA Retail Institute here.



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