Assume you’re a young pure-play etailer competing against a well established multi-channel retailer with 15 locations. Your competitor’s strategic advantages are…
1. Ability to offer customers multiple shopping formats- catalog, store, phone and online.
2. Being a larger company driving higher volume they have greater pricing power. Translation- deeper supplier discounts.
3. Their advertising costs are amortized across 15 stores, a call center, an ecommerce department etc.
What are your strategic advantages?
1. Since your competition has multiple channels, each with a unique operating formula, their attention is spread thin. You, on the other hand, have no channel distractions and can focus on experimenting with- product descriptions, page layout, cross-sells and up-sells, email marketing, longtail PPC, etc.
2. Suppliers are unwilling to offer you order discounts. Fair enough. Therefore you can focus on merchandising products your customers care about without the distraction of supplier discounts.
3. Your competitor’s unit ad cost is way lower than yours but their advertising is aimed at the middle because they have to appeal to a much broader audience- web, catalog, store and call center. Your advertising unit cost is higher but you can customize messaging towards online shoppers.
These three points are your strategic advantages and your competitor’s disadvantages. This is the kill zone.