No competitors is worse than many competitors

Contrary to what we think or would like to believe, having an original product isn’t always a sure sell to buyers. Having no competition can be worse than the alternative. It could be much harder to get retail shops to buy your stuff if there is no competition in your niche. Before we jump to conclusions, let’s clarify a few things:

Are you sure your product idea is original and has no competition? It is more likely that you’re not looking in the right places. If the item doesn’t exist where you shop, you need to look farther afield to conduct competitive analysis. If the product doesn’t exist where you shop, it is probably because there’s no market for it there. That doesn’t mean to throw in the towel, it means you must reconsider where you thought to sell it because your product idea may be a mismatch due to price, styling, need or whatever.

So let’s say it truly doesn’t exist, having no competition can be the kiss of death rather than an advantage. Behavioral economics is based on reasons people buy stuff. People don’t buy because of presumed risks some of which are:

  • Maybe it doesn’t perform as promised so they will lose money.
  • People worry about appearing foolish for their purchases -especially when it comes to clothes!
  • Safety in numbers; it is too new, they don’t know anyone else with one.
  • People don’t understand what it is or why they need it.
  • Whatever you may consider to be your value proposition is not valued by others.

Because everything in apparel has already been done, your product may not exist in the marketplace now because it didn’t sell or no longer sells.  It boils down to this for consumers and retail buyers: buyers won’t be comfortable about your product unless it is comparable to something else they are familiar with. In a nutshell, this is why the lack of competition should be a red flag.

A better idea is to consider retail buyer behavior. It’s a mistake to deprecate the intelligence of retailers because they won’t buy our stuff and while there are always exceptions, they’re practically geniuses. If a retailer is successful by any measure, they know their market and their customers. Retailers are driven by sell through. No successful retailer can stock what they like personally or what they think is the best quality because that is not what their customers buy. Customers buy value. And isn’t that what you’re looking for? What consumers will buy?

Speaking of, don’t think of retail stores as middlemen; the retailer is your customer. Since you hope this will become a long term relationship, you need to be predictable and fit in with the vibe of their existing merchandise. You want the buyer to become so comfortable with you that they plan a given portion of their OTB to go toward buying your products before they’ve even seen your latest collection. Think about that. Compare that to a consumer. A consumer doesn’t plan their clothing purchases by thinking “I need to set aside X dollars of my budget to buy Suzy Q styles for my summer wardrobe”. Or maybe some do (I buy socks this way) but these customers are few and far between.

The solution is find products you aspire to compete with so you can figure out their competitive advantage because if your product truly does not exist in the marketplace, there is little potential for it. Rather, find out who has done it and if they failed, you can free-ride on their failure to avoid the same mistakes. Look at it this way, if you are the first mover, there is no one to learn from which means you’ll make more mistakes and spend more money than you would have. Even worse, if you’re out there blazing a trail, you’ve opened the path for others who will follow your lead but they’ll have the hindsight of avoiding the mistakes you made. It almost doesn’t seem fair does it?

You can’t assume consumers understand the benefit so it’s up to you to market it appropriately so they do -and that may not be by saying it is wholly new in the marketplace; it must be comparable to something else they are familiar with so they have comparisons of likely performance and how it will fit in their lives. Nobody buys anything just because it is new. Which is not to say you shouldn’t do new versions. Sure, trumpet new and improved once you get a foot hold so you can sell some more to existing customers.

Related:
This being a kind of, sort of follow up to targeting the market for your business plan and why business plans are over rated, you might want to see those too.

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11 comments

  1. Vicki says:

    This is so true. I’ve been told “You are going to take … “so and so’s” customers because you are right up their alley, at at a better price point, yet somehow different”. Not meaning that my designs are like theirs, but rather equally appealing. That is exactly what’s happening. To my surprise actually. I didn’t even know about these couple of other companies until just recently. I just do what comes naturally and, everything else naturally follows. Good, or bad.

    Thanks Kathleen. You have created such an invaluable resource for all of us DE’s.

  2. Jane says:

    This is interesting and also brings up a point in my mind of whether or not consumers are “ready” for a product or not. I remember reading somewhere that Blockbuster Inc. actually tried selling DVD’s from vending machines before Redbox did, but it was a flop. Assuming this is true, I’m guessing people just weren’t ready to give money to a machine for an actual movie – just for a soda or candy bar. I still find it odd but my 7 year old loves it – he’s ready to buy almost anything from a machine while I’m still waiting in line for a real person and looking for 1-800 numbers!

  3. Barbara Pontius says:

    This is quite timely for me. I originally thought my niche in the market was a “high quality” collegiate apron. I quickly learned several things. First, I need to have a line, rather than one item. Secondly, it’s unlikely for me to sell exclusively on line and obtain collegiate licenses. Next, the costs add up quickly and am not sure consumers will appreciate the “high quality” fabric in an apron” made in the USA”. Even though I believe fans (at least southern conference) buy lots of collegiate merchandise, it still has to have value to them. Maybe production in China will give me the price point I need, regardless of the social cause I’m supporting by producing in a women’s correctional facility. I’m actually at the scary point where I’m spending real money and soon to get consumer feedback. This post has really helped me emotionally detach from my prototypes and realistically look at this business. Thank you!

  4. WendyB says:

    A different angle on this is when I was trying to get some press coverage for my brand back in 2007 and pitched the social media angle — that I was very active in blogging world even though I was doing luxury goods, which I’m supposed to be all snooty and exclusionary about. People told me no one does that, it’s a bad idea and doomed to fail, so not a story. Then every luxury-goods company got online in 2010…and the stories were about de la Renta, Versace and Cavalli, not me. Someone told me, “It would have been better for you to be third than to be first.”

  5. Barbara Pontius says:

    Wendy, I’m not sure I understand the comment “It would have been better for you to be third than to be first.” Could you please explain?

  6. kenna says:

    @ Barbara P – I understand Wendy’s comment to be another iteration of Kathleen’s “if you are the first mover, there is no one to learn from which means you’ll make more mistakes and spend more money than you would have.”

  7. kris combs says:

    It could be a good thing thatyou have no competitor if your quality is above everyone else, ( highly unlikely)your turn around time is untimely quick, no mistakes and stand behind your work completely.
    Bad if it is because you sell intirely on cheap pricing, cheating yourself and or employees, ruining real business operations with Walmart mentality, only to put others out of business at the cost of others

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