Attention all E-Commerce Business Owners: Is Targeting Competitors A Genius Strategy or A Race To The Bottom?

This is the first of a two-part blog post series arguing both sides of the coin for a question many, many, ecommerce business owners regularly ask: Should we be targeting our competitors to grow?

In this post we argue that targeting competitors is folly and ultimately creating a snake that will bite its own tail.  We will release part 2: Why Targeting Competitors is a Genius Strategy, next week.

The temptation to directly target competitors can be strong. After all, what better way to grow your business than by stealing customers from your rivals? While this strategy may yield short-term gains in brand recognition and sales, it's a risky move that can ultimately backfire.

We spoke to an agency owner, Jenny*, recently who explained to us the number one question she receives from E-Commerce business owners whether they’d be getting ahead if they fight fire with fire and target their competitors to try and get their customers.

“Business owners just want to get ahead. It’s no secret the Australian economy and shoppers are challenged. Outside of Black Friday and Cyber Monday, which is expected to be huge, a lot of ecommerce owners who have stores with little differentiation, but have great brands, are looking for that next jolt of growth. Often they think they can get it by stealing from their competitors.”

We asked Jenny what she advises her clients, and her answer has led us to create this two-part series outlining the upsides, risks, opportunities and opportunity costs of focusing on trying to steal customers from a competitor brand.

So, read on for part one: Should e-commerce businesses fight fire with fire and target competitors to grow?

The Cannibalistic Nature of Competitive Targeting

When you directly target a competitor, you're essentially cannibalizing your own market. You're taking customers who might have otherwise chosen your brand and diverting them to a specific product or service. While this may boost sales in the short term, it can lead to long-term problems.

As more and more businesses adopt this strategy, the competitive landscape becomes increasingly crowded and noisy. What was once a unique selling proposition can quickly become a commodity. In this environment, it becomes harder to differentiate your brand and attract new customers.

Building a Sustainable E-commerce Business

To build a truly sustainable e-commerce business, you need to focus on creating a unique value proposition that resonates with your target audience. Here are a few strategies to consider:

• Leverage Analytics: Use data to identify your best-selling products and customer preferences. This information can help you develop new products that align with your audience's needs and desires.
• Create a Unique Brand Identity: Your brand should be more than just a logo and a slogan. It should reflect your company's values and mission. A strong brand identity can help you stand out from the competition and build customer loyalty.

• Exclusive Content: Offer exclusive content, such as behind-the-scenes footage, tutorials, or early access to new products, to your most loyal customers.
• Patreon Subscriptions: A Patreon subscription can be a great way to build a community of superfans and generate additional revenue. While the primary goal isn't to maximize revenue, it's about fostering a deeper connection with your customers.
• Online Events: Host online events, such as webinars, workshops, or Q&A sessions, to engage with your audience and build a sense of community.

By focusing on these strategies, you can create a more sustainable and profitable e-commerce business. Remember, the key to long-term success is to build a strong brand, offer unique products, and cultivate a loyal customer base.

Editors note: Jenny is an agency owner in Melbourne who spoke to us on the condition we change her name.