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This chapter is from the book

Competing in the New Marketplace

Your competition is not just another online store—nor is it just retail, nor just catalog. Today, it's every store, and tomorrow it will increase even more. The more you know about your competition, the more you'll know about how to acquire and retain customers.

Understanding your competition will help you position yourself in the marketplace. You'll need to know their financial positions, their customer value propositions, and how target customers view them. Are their suppliers reliable? What solutions do they offer the customer? How big is an online competitor? The Internet hides the size of businesses, unlike a physical retail store. It is difficult to know whether a given company is a large enterprise or a home-based company.

Customers have a basic level of online shopping expectation, which sets the bar. The most successful and popular online stores today are raising that bar as they integrate emerging technologies and refine website design to accommodate shopper preferences. Every day, expectations grow higher and the bar continues to move. There is no room for complacency in today's business environment. The competition is only a click away.

The online store must differentiate itself from all channels and all competitors. The most difficult task is to create a truly unique website. Retail stores that are the most memorable provide something that other retailers do not. Wal-Mart's success is attributable, in part, to the company's strategy to build stores in smaller towns and cities. Consumers found the stores to be accessible and convenient.

Nordstrom differentiates through its special service and store ambience. Online, Amazon.com doesn't just list titles of books. It gives customers access to excerpts of books and even allows individual consumer comments and reviews. Online merchants each need a unique position in the marketplace.

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