Thoughts, resources, articles

The tech industry loves to talk about defensible moats like technology IP or network effects because the common belief is that scale can eventually help ward off competition.

Is this true in the new retail era?

Unfortunately, the answer isn’t really that straightforward.

It depends on who you are positioning yourself against.

  • Are you distributing your own brand products or
  • Are you carrying products for a manufacturer?

We will address both positions individually because they come with their own unique problem sets.

You Own The Brand

You likely entered the industry after realising that there was a whitespace because there wasn’t anybody else within that category or they weren’t doing it well. Here are some quick tips on how to dominate that niche-

photography of a person wearing adidas gazelle
Photo by Matthew Barra on

1. Brand (duh!)

The strength of brands as a moat is commonly understated but the truth is that if you can stay at the top of mind, your shoppers might not have even thought to look for anything else.

If you think of basketball and think of Nike, you probably wouldn’t be googling for the closest Adidas store (and vice versa). Brand matters.

We have more articles dedicated to this topic in our resource section but what you have to take away is that Branding is like gardening. It always sounds amazing to have a backyard filled with beautiful flowers but if you don’t invest sufficient time and resources into it, the garden dies out pretty quickly.

2. Community

Many top brands have experimented with the concept of gathering a community and it works.

Do your shoppers feel connected to a wider network of individuals who also believe in what you are building?

Some brands have gone beyond the concept of social proof and have leveraged their social media assets to start a social movement. We won’t name any one brand in particular but just turn on Facebook, Instagram or Twitter and check out how many communities are out there. #sports #jumpman #vintage #shoeporn

The community you build is the company you build

If you are just starting out, these pockets of individuals who love your brand to death will be fanatical about getting their friends and family to give your brand a try. Nothing feels greater than having a group of outsiders rooting for your success. So build this early and be authentic about your mission.

3. Merchandising: Selection Curation

You may have started out with the smallest niche that you could have possibly thought of to get a foothold into the market. Now you are in the race and it is time to expand.

How can you curate a selection mix to ease the buying decision?

Think about the other products within your space that you can add into your mix. IKEA does a fantastic job in selecting products that go well together. Their shoppers can visualise the merchandise coming in as a set.

Learn from this example- don’t make your shoppers think about what to buy. Let them imagine what they would feel if they had bought.

Selling Other Brands

Maybe you are a corner store and heard your best supplier is now going to ship their products directly to consumers- bypassing you completely. Before you panic, think about the role that you play…

1. Immediate Assortment Choice

Think about the typical local mart or an e-commerce store, it can carry anywhere between 1,000 to 20,000 SKUs made from over a hundred different companies. Manufacturers tend to focus on one specific vertical and consumers might not want to enter 3 different stores or websites just to complete their weekly groceries.

2. Greater Cost Advantages

Whether it is boxes of the latest handbags or cartons of milk, you, as the intermediary, have the ability to offer these to shoppers in lower quantities whilst reaping the benefits of ordering these products in bulk from manufacturers- lowering delivery and warehousing cost.

For those in the pure brick and mortar play, one major convenience factor that you have going for you is that you act as a consolidated holding space for all their shoppers. Shoppers know that you are there whenever they need to make a quick repurchase so they don’t have to overstock their homes.

3. Service: Increasing the Overall Value

We often forget that shoppers come for the products but they stay for the service.

Service can come in many forms, from credit payments for larger ticket items to on-the-spot tailoring in fashion.

Perhaps the best example of this is the Hema Stores (Alibaba group) where shoppers can enjoy a fresh seafood meal in the supermarket.

Final Words

Building a moat against competitors simply isn’t that easy but we want to help. I’m sure that you have tons of questions on your mind and we want to help.

Leave a comment or question and we will get back to you ASAP.

Good luck!