June 22, 2014

Online / Retail Dynamics: Competition

When I worked at Nordstrom, we used to read all sorts of interesting content about Neiman Marcus, one of our primary competitors. Most interesting, of course, was the difference in tone.
  • Typical Neiman Marcus Comment: "We are out to crush the competition."
  • Typical Nordstrom Comment: "We welcome Neiman Marcus into our markets, because when they open stores, we find that our comp store sales tend to increase."
Catalogers know this as well - they've been sharing their most coveted asset - customers - with each other for thirty or more years.

Yes, I get it, your competition is "just one click away". Fine. At Nordstrom, we analyzed all online and retail behavior within the context of the amount of competition a customer faced within a zip code. Online, we couldn't control for this dynamic (though referring URLs taught us that our customers shopped everybody - and credit card data showed us that customers shopped Wal-Mart as much as they shopped Nordstrom). But the zip code data was invaluable for understanding the competitive landscape, and the impact the competitive landscape had on in-store purchases.

Turns out that competition isn't always a bad thing!

Contact me (kevinh@minethatdata.com) for your own, customized project.