Many retailers have explored monitoring of competitors’ prices
, even if only casually, but stock monitoring can be just as useful for competing well. Also known as inventory intelligence or inventory monitoring, stock monitoring is a way of keeping tabs on what, specifically, your competitors are selling.
In the offline context, this might have been done in the old days with a simple visit to a competing retailer’s store to see what was on offer.
With modern tools, however, and the proliferation of ecommerce, you can use software to get the same information much faster.
Benefits Of Stock Monitoring
Inventory monitoring and inventory spying can bring several important advantages to your retail business.
First, it allows you to grab market share. For example, if you see that a certain product is out of stock at competitors’ stores, you can invest more in marketing your store specifically for that product. Some of the new customers will stick around for the long term.
Second, inventory spying keeps you informed and allows you to plan better. You can see which products are becoming commoditized due to intense competition, and which ones offer blue ocean opportunities.
What Software Tools Do You Need?
There are two categories of software tools you need, inventory spying tools and price monitoring tools. An inventory spying tool includes capabilities to track product categories, variations, names, descriptions, and other metadata from competitors’ stores.
On the other hand, a price monitoring tool like Competitor Monitor
will allow you to track the prices at which these products are being sold by competitors. Some tools, such as Competitor Monitor, include support for both types of monitoring.
Maximizing Revenue When You Are The Sole Seller
There are times when you bring to market a unique product or discover a product ahead of your competitors.
This happens, for example, when you start sourcing product from a manufacturer in a different country, thus bringing a new brand in front of buyers. If you time things right, you could make good profits before competitors discover your product.
Spotting Opportunities Where You Can Be The Sole Seller
You can discover new and exciting products through multiple channels. One way is to attend manufacturer trade fairs or product model launches. Manufacturers often look for opportunities to broaden their networks with the launch of a new product.
This gives you, the retailer, the opportunity to stock a new product or model ahead of competitors. If it’s a widely sought-after product, you will be ahead of competitors in selling the new model, at least until others start ordering stock of the product.
You can also use product search tools that highlight exciting new products using market analytics to predict which new products might do well. Such product research software will give you insights into what’s trending, helping you take action before the rest of the market catches on.
Establishing Authority As The Seller Of Record
If you find that your competitors have not discovered the product you are currently making good sales with, you can build on that early advantage for long term success. First, try not to alert competitors to a lucrative opportunity if you can possible avoid alerting them.
Secondly, create content and other add-ons, such as guides or events, that will build your store’s reputation as the go-to store for that product. This way, even when others eventually start selling the same product, consumers will still prefer your store because you offer a more complete package.
You can retain an advantage and make higher sales for a longer time despite gradually increasing competition in the marketplace.
Adjusting To Multiple Seller Markets
Through competitive inventory monitoring, you will be able to discover when competitors enter into your unique product markets. These could be competitors in your local area who discover your product suppliers, or far off competitors who start selling a similar product.
What To Do When Competitors Discover Your Unique Product
If the competitor is far away and focused on a different market, there might be little worry because your markets don’t overlap. For example, they might be selling the same shoe but with a focus on a different city or geographic area.
However, often, it’s your direct competitors who discover a profitable product you have been selling almost exclusively. This is not to be taken as a defeat. After all, you too will be able to discover new, potentially profitable, products in the future by carefully keeping stock of what your direct competitors are selling.
With more competition, however, you must focus much more on improving the overall value you offer customers. You can do this by offering better service, product guarantees, or, in some cases, offering customers a better bargain.
Staying Competitive With Market Pricing
When there are multiple product sellers all selling the same thing, the market price becomes simply the average of the various prices at the different stores. In such a market, unless your store happens to have a unique advantage such as fast delivery or some other factor, to make sales, your price has to be close to the market.
If you are selling your products through a storefront such as Amazon, you might have discovered the rule of market pricing. It is hard to make good sales on such platforms if you charge above a certain percentage of the established market price. This is because there are typically many other sellers on the platform all selling the same thing as you.
You do have another tool for making sales at higher prices, however, and that’s through using the power of brand to retain market power.
Creating A Brand Or Special Services To Retain Market Power
Creating a strong brand around your store, and not being seen as a commodity reseller of products, is essential to positioning your store for long term success. Having a strong brand that your ideal shoppers self-identify with means that you can make sales even when you charge premium prices for products that others have in stock.
Overall, your margins will be higher, and this means you can spend more money on acquiring new customers than your competition can. This virtuous cycle can mean the difference between a growing, thriving, store, and one that struggles to make headway.
Brand is a special subject in its own right, but you can create or enhance it through such tactics as:
- Targeting - Focusing on a particular core demographic, such as Millennial buyers, Baby Boomers, cycling enthusiasts, Paleo dieting fans, and the like.
- Social Media - Brands leverage the power of social media to create thriving communities of like-minded people who are all interested in using their product.
- Values - Rather than just selling products, brands create a shared sense of purpose by promoting or adhering to a set of values. This can be seen by looking at the values espoused by two major brands: Google and Apple. Google’s motto for long was “Don’t be evil” whereas Apple in 1997 introduced the slogan: “Think different.” The values behind these iconic statements resonated with the brands’ communities and served to bind the community together for the long run.
Tracking Inventory And Adjusting Accordingly
Not only can you track competitors’ prices using tools like Competitor Monitor, but you can gain additional advantages by tracking inventory.
With competitor monitoring of inventory, you will have a fuller sense of the market. This allows you to spot opportunities where you can play more aggressively, such as when you discover a unique product ahead of competitors. You can invest more in advertising or brand building in order to build a long term advantage.
Likewise, you can use inventory monitoring to compete better against others when the market has many sellers for a particular product.