How to Remain Competitive in a Saturated Online Retail Market

Online retail has always been a crowded market, and thanks to the plethora of free website builders, it's more competitive than ever before. If you're entering a niche that already has a dozen entities fighting for dominance, you're going to get lost in the white noise. And even if you don't have much direct competition, there's always the threat of generalized juggernauts like Amazon to worry about.

So, what steps can you take to stay competitive in a saturated online retail market?

Target a Distinct Niche

Your best bet is to try to avoid competition by targeting a distinctive niche. There are thousands of online retailers focusing on clothing, but if you focus on a specific type of item, like wool coats, you'll instantly narrow the field. Customers who are passionate about wool coats specifically will go out of their way to find a specialist.

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This is also helpful if you're making use of search engine optimization (SEO). In SEO, your goal is to increase your webpages's rankings in search-engine results, but if you're competing with brands that have been building their online presence for years, you'll find it hard to penetrate powerful keywords like "online apparel." Instead, you can target long-tail phrases, which come with less traffic but are much easier to rank for.

Lower Prices (If You Can)

This is an obvious tip, but try to lower your prices if you can, at least initially, to generate more traffic and paying customers. People often conduct price comparisons on the items they need, so if yours are the most appealing on the market, they'll flock to you.

That said, most small online retail businesses can't compete with major players on price without cutting into their profits, so you may need to find an alternative option.

Give Customers Something Your Competitors Can't

For some companies, this could mean offering amazing customer service. For example, the online shoe brand Zappos became popular in part because of its unparalleled commitment to making customers happy. For other companies, it means capitalizing on an existing legacy. For example, Diamondere has been designing custom jewelry for 125 years and uses that experience in combination with modern technology to produce unique pieces unlike anything their competitors sell.

Start Local

If you're struggling to generate momentum for your business, you could focus on a specific local market and expand from there. Depending on the nature of your business, that might mean opening a brick-and-mortar retail location, or simply mean optimizing your site with local-specific keywords. Targeting a local audience will instantly narrow your demographics, giving you more power to tailor your products and services to their needs. More importantly, it will greatly reduce the number of companies directly competing with you. Once you start seeing growth, you can expand to target other areas.

Get Customers to Try You

If you have good products at good prices and quality service to match, the only thing stopping customers from shopping with you will be familiarity. They're probably used to shopping with a bigger, more established retail brand and won't go out of their way to try something new. That's why you need to make the effort to get customers to try you. Distribute free samples, reach out to people in your target demographics, and offer amazing deals to get people started. Consider it your foot-in-the-door.

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Leverage Your Competition

If you can't beat a competitor, find a way to use them in your favor. For example, some ambitious online retail brands have taken to buying pay-per-click (PPC) ads that utilize their top competitor's brand name; that way, you can capitalize on customers specifically searching for your competitor and persuade them to visit your online store instead.

Offer Unparalleled Customer Service

You can make up for a number of potential shortcomings, including online presence, customer familiarity and price, by offering unparalleled customer service. Anytime a customer has an issue, do everything in your power to make it right, even if it means taking a short-term loss.

Provide your customers with surprise "extras," like free samples or bonus products in their shipments. Make sure they're absolutely satisfied with every purchase. If you go above and beyond, you'll build a loyalty that's practically unbreakable.

Competing with well-established powerhouses in your own online retail niche may be challenging, but it's not impossible. If you're not afraid to make adjustments to your business, and if you offer something your competitors can't match, you should have a good chance of rising to prominence. Just make sure you're doing everything with your customers's interests in mind.