Many retailers the world over are finding themselves threatened by relatively new low-priced competitors, such as discounters or aggressive e-commerce operators. These low-priced competitors have fundamentally different business models to traditional retailers: their economics support low prices in a way that traditional retailers’ don’t. It’s not surprising that traditional retailers find themselves in a difficult position.
In this article, we discuss four things retailers should do to fight back. These include not only taking action on value position, but also on customer proposition and cost base. We have seen examples of retailers who have already used these strategies to successfully defend and even grow their share in markets under attack from low-priced competitors. While this is by no means easy to do, we believe big rewards await the retailers that take meaningful action now.
