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Companies used to be able to differentiate themselves by their merchandise, their prices, or their location. But that was before the Internet.
Today the Internet has made it easier and faster than ever for a category killer such as Wal-Mart to knock off even the most distinctive product, have it cheaply mass-produced in Asia, and have it placed on its shelves nationwide in a matter of weeks. Because of their vast buying power, category killers can also sell items for less than most other merchants–and online tools such as comparative shopping engines enable shoppers to find the cheapest merchant in just a few clicks. And of course the very nature of the Web means that store proximity is no longer the factor it once was in assuring customer loyalty.
What’s an online merchant who isn’t Wal-Mart or Target or Home Depot to do: fight back by using service as a branding tool, a way to rise above the fray and win the loyalty of customers.
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