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Understanding Competitive Differentiation

To stand out in the crowd is one of the much-loved ambitions for us humans. Done right and for the right reasons, it brings attention and attracts interest. Interest creates desire and desires motivate people to initiate favourable actions. The same phenomenon is observable in business also but with the difference that here it is a marketing strategy to favourably influence customers and consumer behaviour.

The need for brand differentiation stems from competition and homogeneity of products and services. But if a brand is positioned uniquely in a market, it helps businesses build a brand persona that customers can easily distinguish and associate with. The more strongly a brand or a business resonates with its customers and their needs and aspirations, the better are its prospects for customer acquisition and retention.

But to state terms like unique and strong differentiation takes us to ambiguity. In business, there is no scope for ambiguous communication whether it is internal communication or outward branding communication. This post highlights five powerful marketing strategies for creating competitive differentiation as retail business ideas.

Five Powerful Strategies for Competitive Differentiation in Retail

Add Value and Emotion to Customer Experience

When customer experience is under consideration, value and emotions are two key parameters of performance for retail businesses. These two elements exist and speak for a brand at every touchpoint customers encounter in their shopping journey.

Emotion in customer experience can be narrowed down to the feelings associated with being proven right, treated more than fairly, living up to the expected standards of performance and delivered promises. For instance, if a bicycle rental service advertises that bicycles in all price ranges are available but when customers visit the store or enquire over the phone or chat and are informed that only the expensive products are available, such deviations are a source of dissatisfaction for customers. That is when customers feel being proven wrong and brands fail to deliver on the expected promises and standards of performance.

Value is utility for customers. It fuels the motivation and provides the resources needed to carry forward a shopping journey. From the example used earlier, if the retail business fails to provide information to customers or answer their queries in the required manner, it brings the customers’ decision-making process to a halt. That is also a blow to customer experience.

Attention to such details of experience and improvisations made in this regard means a lot to customers and help retail businesses create positive, subtle differences that often go unnoticed by competitors.

Adopt Online Technologies

Adopting online technologies need not necessarily mean a shift to eCommerce. There are many aspects of online technologies that could be put to use by traditional brick and mortar retail businesses to get their brand closer to the market and customers. For example, having an eCommerce website or application enables customers to preview the offered products and services, check the prices, get to know about the terms and conditions, place orders, track deliveries, raise complaints, etc. Because people are getting more convergent using online digital platforms, it makes sense to incorporate them into business and provide digital convenience to customers. Businesses that refrain from having an eCommerce strategy and going online in relevant ways fall behind competitors who make it easier for customers to reach out to them.

Give Multiple Payment Options

Retail stores, online or offline, need to ensure that all the payment options offered are working fine in the normal course of business. If any option is not working properly, they should notify the same to customers and try to make it back to action as soon as possible. Many customers on online platforms cancel or halt their purchase decisions from the checkout page when they see that the desired payment option is not available. The downtime could be for a few minutes but that time is sufficient to push away tens or hundreds of customers to a competitor’s website.

An effective approach to smoothen the checkout process is express checkout. Express checkout reduces or automates the need for filling up the required fields like billing, shipping, and payment information. It stores previously-entered information with a user-friendly interface. It displays only the necessary information. It maintains consistency across devices.

In physical stores too, the problem of one or some of the payment options not working is rampant. Customers do not like to be delimited by options at the time of checkout. And consulting for big retail brands or as part of advisory resources for small retail businesses could vet for it.

Having multiple options for making payments for purchases adds flexibility to the shopping experience of customers. It is not only a tangible utility to customers but also gives them a psychological edge. Customers get the choice of making a change in their payment method till the last moment of checking out. It is one of the powerful retail business ideas for all retailers.

Use Digital Marketing

Retail businesses operating in the brick and mortar format should go for digital marketing to create a competitive edge against their offline and online competitors. With increasing internet penetration, the democratization of technology, and the ever-growing usage and popularity of search and engines and social media platforms, digital marketing is the need of the hour for retail players. Digital marketing is not restricted to promotions only but also analytics. It gives businesses the edge of information and insights for a better understanding of markets and consumer behaviour. This is gold in retail. It helps businesses contribute to building competitive differentiation in terms of promotional accuracy and informative insights for marketing decisions and strategies.

Offer Discounts and Membership Plans and Benefits

Discounts often prove to be effective in increasing retail sales and securing a customer base. Discounts could be temporary or long term as retail business ideas. Temporary discounts are offered for a limited period and selected products. This strategy works for stock clearance, market development (new players), and thwarting competitive forces. The other form of retail discounting is long term. Retailers use this strategy for market development as a long-term strategy. In some cases, the rates of discounts are kept on reducing once the desired market share is achieved. This strategy works particularly well for grocery and departmental stores where the price differences are easily recognized by customers in comparison to any competing store. Retailers are able to provide discounts by cutting on their margins and betting on volume.

As part of advisory resources for small retail businesses, membership is commonly advocated as a powerful strategy in retail business ideas. It has been in use by many fashion brands and retailers. But over the years, the strategy is being used by retailers across industries and channels. Retail brands try to create a brand differentiation that is based on special membership benefits in comparison to what is being offered to non-members. Early and free deliveries are a prime example here. Once out, the membership benefits begin to speak for themselves among the customers – members and non-members.

How YRC can make a difference

YRC (Your Retail Coach) is a boutique retail and eCommerce consulting firm. Started in 2012, YRC now has a growing international presence. It has consulted over 500 clients in more than 20 verticals.

YRC offers specialized services in emerging and critical areas of retail and eCommerce like customer experience (CX), digital transformation, omnichannel and hybrid business models, and digital marketing. These services are designed uniquely for each client keeping in mind the fundamentals of marketing and the evolving requirements of the industry.

More information on YRC’s retail and eCommerce business consulting services are on their official website.

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    The idea of having Ecommerce Consultants on-board from the beginning itself points towards reducing the involvement of the promoters in daily operations. Ecommerce Businesses willing to be a brand reaping profits & sustaining the competition must ensure that most of their processes should be automated. The more the manual intervention, the more would be the errors.

    In Ecommerce business, you get only 1 chance to impress the customer & if you mess up there, you lose the customer for long.

    Process automation in respect to all the activities pertaining to customers from order receiving to order fulfilment is a must for a seamless experience for the customers.

    Task Management is another grey area where most deadlines fail as 90% of the tasks are assigned manually & are forgotten, unheard, misunderstood or mistaken.

    YRC Team of Ecommerce Management Consultants helps to make maximum of the processes system-driven to ensure minimalistic manual intervention.


    No matter how good your product is, the customer would know only if it looks good.

    Photography includes the following steps:

    • Cataloguing your products
    • Cataloguing your images
    • Backup your images (A few cloud storage solutions include Dropbox, Google Drive, Bitcasa, Apple’s Cloud Storage etc.)
    • Choose the right camera & lens (You may also outsource the photography to a third party agency)


    Digital Marketing includes SEO & SMM. SEO i.e. Search Engine Optimization includes activities like back-linking, meta tags, blog-writing etc. to ensure your website ranks on the 1st page on Google Search.

    Next comes SMM i.e. “Social Media Marketing” which as the name suggests including promoting your products on all the social media sites, email marketing, influencer marketing & several other BTL activities.

    These activities are going to be recurring & would decide the traffic on the website, the conversions, whether the right target market is tapped, the likes, the views, the orders, the reviews & much more. YRCs Ecommerce Consultants create a budget for digital marketing right from pre-launch to launch & for each month thereafter.

    Building digital marketing strategies in coordination with the agency, selecting them to signing them off would be the role of YRC.

    This ensures seamless coordination, detailed interactions & desired execution as it is always advisable to work with a single agency than multiple of them.


    Selection of the right software for smooth functioning of back-end operations right from production to webstore display would be suggested and integrated by YRC Team.

    YRC’s Team defines SOPs of Product Movement, maps it with the locations & people. They then create a blueprint of all the features required in the software & help in shortlisting & selection.

    IT Integration involves connecting your offline inventories with real-time online webstore so when a sale occurs, inventories get deducted real time across offline as well as online platforms.

    This helps in accurate inventory management, maintaining the MOQs, re-order levels & achieving the optimum inventory levels.

    Some popular software include unicommerce, viniculum for your front-end website management & Genisys for your entire back-end Purchase, Production, Accounting, Invoicing etc. management.


    • How many cities or countries you wish to sell in?
    • Where should your Warehouse be located?
    • Should you have one warehouse in each country or city?
    • Should you be having your own delivery team in your base city?
    • Would the 3rd party vendors be reliable? What happens when they lose or misplace your product during delivery?
    • How should I manage the logistics if my goods are coming from different countries?
    • How should the goods be stored and barcoded?
    • How much space do I require for warehouse?
    • I am sure several such questions must be haunting you while you think of starting your own fashion ecommerce brand.


    At YRC, our warehousing and logistics experts can help you devise a strategy for all of the above mentioned queries and much more.

    We design the layout of the Warehouse considering the inward, goods processing, software entry, barcoding, outward, goods return, scrap storage, goods stacking & much more.

    Logistics route plan is devised considering the manufacturer to your warehouse and from there to last mile delivery locations.


    This Step involves 03 distinct parts:

    Part 1: Choosing the right Platform:

    From several platforms available in the market right from Shopify to magento, woocommerce, prestoshop, wordpress etc. you must choose the one that fits best for your business

    Part 2: UX Designing:

    “UX” denotes User Experience, which if put in simple language is building the functional requirements of the website.

    UX Designing includes designing the features required in the website, customer journey map, website features, the browsing features, navigation features, ecommerce order management process flow, checkout cart features, catalogue management, ecommerce payment system, cross selling features & much more.

    “As per statistics, 68% of the customers abandon the carts before payment”

    An interesting UX ensures the customer sticks on to the website for a longer time.

    Part 3: UI Designing:

    UI stands for User Interface, which means designing the look and feel of the website. UI includes using the right colours, elements and the entire aesthetics of the website.

    A good User Interface ensures the user completes the task that he has come for. It navigates the user through the journey of the brand in the simplest but most effective way.

    The UX designer maps out the bare bones of the user journey; the UI designer then fills it in with visual and interactive elements.

    If User experience is the bare bone, user interface wraps it up with an attractive cape.

    At YRC, our team if experts can help you develop the entire User Journey to ensure it is engaging!


    This step follows the “Designing” Phase, whether you have an in-house design team, freelance designers or an outsourced design company. It is one of the most exciting phases, as here you see your designs turning into products & your ideas turning into reality.

    In most start-up cases, production is outsourced i.e. brands tie-up with the established manufacturers/ job-workers to get their products manufactured.

    Sampling involves multiple 04 Stages, Fit-Sample, Prototype Sample, Pre-Production Sample & the Production Sample.

    Prototype Sample is the first sample provided to the buyer. It can be in any fabric/ colour. This sample is just to understand whether the product design looks equally great in reality.

    Fit Sample, as the name suggests is prepared to check the fit of the garment i.e. the various sizes, length, width etc.

    Pre-production is made by the actual production line. Here the stitching quality and other aspects related to manufacturing are checked. This is the last stage where rejection can be accepted.

    Production Sample is made before the production which is the replica of what is going to be finally produced.

    Once you are through with all this, you are good to go ahead & get your goods manufactured.


    Product Designing or Sourcing is the heart of the Ecommerce Fashion Brand.

    Product Designing / Sourcing can be done in several ways, as follows:

    • In-house Design Team
    • Freelance Designers
    • Outsourced Design Team
    • Ready Product Sourcing (From Manufacturer or Wholesaler)

    At YRC, we evaluate your business strategy & business model to arrive at the decision, which of the above ways would be best-fit for your business. In certain cases, product sourcing may be a combination of the above.

    These are the people who are going to build your brand! Whether they are the designers or merchandiser, your brand look is going to be in their hands.

    If you are designing each garment from the scratch, the sourcing would play crucial role in developing design identity of your brand.

    Sourcing includes fabric, trims, lining & all the raw material required to build the garment.


    Branding is the “Look of the Brand”, right from logo to tagline, the colours used, the brand story, the brand communications on social media, the packaging & all the other aspects which speak directly or indirectly to the customers. Branding constitutes the look & feel of the brand & hence must be thoughtfully planned to match with the product that we are selling.

    Branding must appeal to our target audience. Example : A golden colour logo depicting finesse, art, richness, premium, however beautiful it may be individually cannot go with a brand selling affordable kids wear products. So, your logo must be in-line with your brand positioning, whether you are an expensive brand or a luxury brand or a value for money brand, it must be depicted from your “Branding”.

    It is an integral part to attract the target audience.


    Organogram is the “HR Blueprint” of the business which is created at the onset, to map out the team required across each function at various stages of the business. At the launch, only key people need to be got on board to ensure the project gets started & at this stage, all of them need to multi-task. Similarly, certain financial as well as operational goals are set for addition of the further team. Example, for the operations team, we hire 1 operations manager during the pre-launch phase & we add 1 more only when the business kicks-off & we reach a volume of selling more than 1000 pcs/ month or a turnover of more than 0.1 million USD.

    SOPs are Standard Operating Procedures, a bible to run the entire organization right from Sales, Purchase, HR, Order receiving to Order fulfilment, Inventory Management, Accounts, Warehouse, Logistics, Supply Chain, Production & all the other relevant functions for the business. Business must be organized from its first day of operations; only then the tasks can be delegated.

    At YRC, we design the organization structure, the processes, and approximate time taken to execute each process, job profile of every member within the organization, their KRAs, KPIs & the Reporting Structure.


    Critical Pathway Analysis (CPA), is a project management technique which cannot be overlooked while launching an ecommerce fashion brand. Brand launch process is cumbersome with multiple inter-dependent & time-bound tasks involved, which need to be tracked to ensure the project remains on track.

    CPA outlines key tasks across the project, their turnaround time (TAT) & the dependencies of tasks upon each other. It identifies the sequence of tasks, their interdependent steps from inception to completion, their criticalities, and their dates of onset, target dates of completion along with the key responsible person for the respective activities. Critical Pathway helps in understanding the unimportant & not urgent tasks which may jeopardize the execution of the project because of an unexpected snag! It also maps out the potential bottlenecks which might be posed because of the dependencies of tasks upon each other & cases where the next task cannot be commenced before the completion of the previous one.

    CPA detects the minimum & the maximum time involvement of a particular individual or team to execute the task, thereby arriving at the overall deadlines associated with the project.

    At Your Retail Coach, we design the Critical Pathway & review it periodically to ensure the project is on track & the progress is measurable.


    Business Strategy includes the vision, mission, goals, business model, business plan & strategy for all the functions within the organization.

    Business Strategy is a well-defined plan that outlines who, what, where, why, how & when for the company; for example, who would be the target market, how to attract the target audience, when to launch new products, where to operate from, how to handle competitors, what would be the USP, what would be long term goal of the organization & several other answers to the 5Ws of Strategy.

    Business Strategy aligns the organization towards a common goal. Business SWOT helps company to identify & overcome their weaknesses & focus to sharpen the strengths. Business strategy forecasts future risks and helps business in building skillsets to overcome the potential threats.

    YRC’s Business Plan focuses on creating a “Blueprint” of the business, thereby deriving the feasibility of the concept & gauge whether the opportunity is lucrative to invest time, energy & effort. Business Plan creates cash flow understanding i.e. building inflow & outflow cash projections from Week zero to week 60 i.e. 05 year projection. Business Plan calculates the capital investment, operating costs, one-time costs, recurring costs & all the other numbers relevant to obtain the breakeven sales, return on investment, return on capital, internal rate of return & several other ratios. Business Plan is also one of the important requirements if you are targeting the “Investor Route”. Fund raising becomes extremely transparent & channelized. With business plan panned out clearly, the business will know until what point must it be stretched & where to stop, which reduces the probability of unplanned investments.


    Starting the concept of Ecommerce Fashion brand with Market Research ensures we get detailed understanding of the industry & this research report also acts as a social confirmation for your concept. Market Research helps in understanding the target locations, their population, potential online buyers for your product, competitors for each category, and top selling products of the competitors, competitors’ price range, offers & their responses & much more. Market Research helps in thorough understanding of your brand position as compared to our competitors. It helps in identifying gaps in the market, in your category along with the scope of the said product in the desired market. This will help in validation of your concept & prevents you from making the same mistakes as your fellow brands, eventually saving your time, energy & efforts. This phase is also a make or a break phase, as the market research study may at-times come up with some eye-popping numbers & statistics which might compel you to re-think on your product or category that you are planning to sell or alter your entire concept itself!! Market Research Reports analyse the competitors’ webstore for their traffic, conversion & sales. This is extremely valuable information to derive our inventory budgets & projections, which takes us to our next phase.