Staying one step ahead when a giant competitor moves in
Success may breed success, but it can also bring out the competition in a big way.
When Gravid.ca co-founders Omar Shahban and Fahd Javed launched their e-commerce site in May, the cousins tapped into a market that was more than willing to try out its weighted blankets. In just over a year, its unit sales surpassed the 10,000 mark, and are expected to reach 50,000 in 2019.
As with any company to be first out of the gate in a new consumer product category, competition latched on to the concept, from ecommerce players selling on Amazon to such major market forces as Sleep Country.
“We were seeing bigger competitors that were mainstays in the homeware space creating their own versions, once they realized it was a growing trend,” Shahban says. “Suddenly, we were faced with players that were trying to compete on price. We knew that wasn’t the route to go, because we had strong competitive differentiators and the advantage of having a year’s worth of experience.”
They decided first to focus on the quality and design of the product, based on their customer feedback. With that, they spent six months working on a design upgrade. “We’ve advanced the design in numerous ways,” Javed says. “The one thing we can say is that the Gravid 2.0 has truly been designed by our customers.”
They also invested in the supply chain to ensure next-day delivery, and they decided to expand, starting with securing a warehousing partner in Australia, rather than taking the usual U.S. market route. “The U.S. is more of an exaggerated and aggressive market and more commodity-price driven, while Australia has a lot of cultural similarity in terms of temperament and marketing,” Shahban explains.
On another front, Gravid. ca is working with McMaster Children’s Hospital to test the blanket in the ICU unit, he adds. “We’re testing to see if the blankets can be used to reduce the use of traditional painkillers to reduce the impact of withdrawal symptoms. That is something that really excited us.”
The plan is to also work with elderly care homes, centres for mental health addiction and other sectors. “We see lots of room for growth in Canada on the B2B side,” Javed says.
A children’s version of the product is also on the agenda. “We’ve had a lot of requests from clients whose children have trouble sleeping,” Javed says. “I have two kids, so that resonated deeply with us.” The blanket also helps settle those with ADHD.
It is common for competitors to come out of the woodwork once a new product strikes a chord with consumers, says Hussam Ayyad, senior director, programs and partnerships, Ryerson DMZ in Toronto. “It’s the nature of competition. Regardless of how small or large, businesses are always fighting for market share.”
There are two paths to build a competitive edge, he says, depending on the nature of the industry. The first is creating an unfair advantage, to ensure your solution can’t be replicated, such as through IP protection.
“The other is getting smarter with your go-tomarket strategy,” Ayyad says. “A smaller company doesn’t want to be in a price war because the big guys will always win. But you can engage in strategic partnerships, or change your product design or distribution. That’s where startups can have a big advantage, because large companies can’t move at the same speed.”
Another critical piece is understanding your market inside and out, Ayyad advises. “The one consistent thing entrepreneurs need is a really good understanding of their markets, and the problem they are trying to solve for their customers, especially when dealing with a highly specialized product.”
That information can be essential when looking to expand, he adds. “Ask yourself, What other industries can benefit from the product? What kind of strategic partnerships can I build?”
Shaun Adams, director, small business, Meridian Credit Union in St. Catharines, Ont., says when competition starts to take notice, it’s important for businesses to seek out experts to discuss their challenges and potential ideas. That can be financial services professionals, mentors, local business centres or industry peers. “Engaging in dialogue helps entrepreneurs explore the whole situation and establish connections,” he says.
“It’s also about going back to your business plan,” Adams notes. “All too often businesses approach their business plan as a transactional document that they file and don’t look at again. A business plan is a living document that should be used often to prompt conversations around shifting into the next phase.”