Most businesses are black and white. If they make a sale, their competition loses one. If you are getting more engagement, it means your competitors are not. But in the world of retail business, there is no such thing as straightforward. At least not if you want to put more money in your pockets.
Why do you need to collaborate with your competitors for your retail benefit? Collaborating with a competitor can provide access to data, analytics, trends, and new resources that are mutually beneficial. Working together can help identify new sales opportunities, promote cross-selling, and coordinated marketing promotions.
In today’s era of the Internet, knowing who your competitors are is crucial. It provides you with plenty of ways to take advantage of them if you want to get ahead of them. One of them includes working with your competitors. It seems counterintuitive to be working with competitors, but it will totally give you an advantage.
When you know your competitors' next move, this will provide you an edge against them and other competitors — giving you more opportunity to top them all. Not just that, it’ll provide you with the chance to learn some wisdom from mentors to help a small retail business like yours to thrive.
An all-out competition is undoubtedly the basic tenet of all businesses in the world. After all, the market is already super competitive and you’re also trying to get a share of the profits it has. But has there ever been a time you wondered whether collaborating with your competitors would actually be a good idea?
Is there a time when co-opetition, not competition is a smart move? This means that, even though you’re all fighting for the same customers, revenue share, and profits, there are instances where you put your differences aside and work together towards a common goal.
According to a recent study by the Multidisciplinary Digital Publishing Institute, the benefits of collaborating with a competitor are likely to outweigh the disadvantages. The report concluded that collaborative competition that lasts anywhere between three and five years, has the potential to mutually reduce company costs by up to 50%.
“Nowadays, the best partner might be your direct competitor,” says Paavo Ritala, a professor of Strategy and Innovation at LUT University of Technology in Finland. “Competitors tend to face similar markets and use similar resources and technologies. They typically have to deal with similar challenges at large. Thus, with rising costs of R&D and globalizing competition, it often makes sense to collaborate with competitors on product development, innovation and joint manufacturing.”
Amazon, for instance, is one of the major companies that have collaborated with their competition such as Amazon Marketplace (now better known as Fulfilled by Amazon). While that move sparked debate within the company, the results are proof enough that collaborating with a competitor would yield better results.
Today, FBA (Fulfilled by Amazon) accounts for over 50% of all Amazon sales. Amazon justifies the terms of the partnership as being best for its customers. “Third-party sales are now 58% of our gross sales because we are committed to helping independent retailers meet the needs of Amazon customers around the globe,” said Amazon spokesperson Joel Sider.
Co-opetition is not something new and many businesses have taken that route. However, you may not have to take the same road, as all business needs are different, and you need to curate one that works best for you.
Before we venture into the topic at hand, let us make something clear. Collaborating with your competitors is not about doing competitor analysis or spying on their social media. It’s about working with them side by side. Although it doesn’t seem it will work, believe me when I say it has its merits, which is what we are here to find out.
Straight competition and pure cooperation will not get your business at the top. You will only lose too much. Instead, you should work towards achieving a middle ground between competition and cooperation. Competing will limit your resources and require you to focus more on marketing. But with co-opetition, you can achieve survival and sustainable growth.
Competition is vital for a retail business. Without it, you won’t be driven to innovate. But it is only beneficial up to a point. If you focus too much on competing, you will miss profitable business opportunities around you. When you find the right company to work with, you can utilize each other's resources and expertise. It will help you achieve your goals, such as gaining more loyal and recurring customers.
What could be another reason to work with your competitors? How about having someone who will inspire you to push through your limits? You might not realize it yet, but your competitors might actually be the mentors you need to thrive. In that case, cooperating with them is a wonderful opportunity for you to learn.
Many in the industry don't shy away from sharing their insights. This could greatly help a small retail business like yours to accomplish things you previously thought were impossible. Through mentors and competitors, start-up businesses can blossom. You never know, but your cooperation with one of your competitors can be an enriching experience.
Collaborating with your competitors entails a give-and-take relationship. It can benefit your retail business well, as it means you can have a way to cover an area of weakness you could not handle before. For instance, your competitor can share some gathered data about their consumers that can help improve your business model.
If you can exchange some valuable information with your competitor, it is enough reason why you should consider working with them. Of course, it means you will have to share something with them as well. This way, both businesses can benefit and find a way to grow despite being competitors.
This one is also about sharing beneficial information. The insights your competitor partner can provide may help you strengthen your email campaign. You can use it to tweak your emails in a way that will pique your customer’s interests. Nowadays there are a lot of marketing tactics that can help you handle the task. Case in point implementing video in marketing emails can multiply open rates by more than 6 times. It is especially useful if you are planning to extend your customer reach.
With the information your competitor can share, you can improve your email campaigns together with the following tips:
• Send emails regularly. Schedule at least two emails weekly. This way, those potential consumers will know when to expect your emails.
• It also helps when you invest in an email marketing tool to help you in making your campaigns better.
• It is also crucial that you grab your consumers' attention by offering discounts and free samples.
• Make sure that your subject lines pique both their curiosity and interest. Subject lines are the first one we all see on an unread email, right? Make sure they count.
There is much advantage when you work with your competitors. But do remember that it is a risky business. It's good advice to take the time weighing in the risks with the benefits of a collaborative relationship with your competitors.
Does sharing relevant resources trump the loss of control and leak of know-how in your business? If you think it does, then collaboration may work for your retail store. Just think about it - without cooperation, industries will not survive.
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