A category killer is a large retail store that has a wide product selection and attractive prices. It dominates other stores in the same product category and drives rivals out of the market. It has a competitive advantage due to its wide choice of products, affordable prices, and huge marketing campaigns.
In this article, we’ll figure out how a category killer works and share some examples. We’ll also compare a category killer and a specialty store.
How does a category killer work?
Category killer store is large, powerful, and competitive. It can easily crowd out its rivals — small retail stores. The main advantages of large retail chain stores include a great product selection, large-scale marketing campaigns, and affordable prices.
To become powerful, a store needs to have retail outlets and be ready to provide customers with a wide choice of products in one product category. Once the store grows and opens more chain stores, it can gain dominance in the market. Small retail stores can’t stand up to competition and leave the market. This is since a category killer has a wide product selection, expanded reach, and capacity.
Big-box stores have more benefits than their competitors. They have more financial opportunities and can afford to buy in bulk from different suppliers. When they purchase in bulk, they get several advantages. They can get a big discount and free shipping. As a result, category killers offer lower prices for customers. Small retailers can’t compete with them. As a result, category killers get a large market share.
Now that you know how it works, let’s proceed to the next section to make the difference between a category killer and a specialty store clear. It will help you get rid of the confusion when a conversation about these two terms will arise.
Category Killer vs Specialty Store
We’ll review the two terms in more detail to understand the difference between them.
A category killer is a large everything-in-one store that dominates a product category. It’s a serious competitor for other smaller stores as it usually has a wide selection of products and lower prices. Its market penetration, pricing, and product assortment provide such big-box stores with a competitive advantage. Examples include Walmart, Home Depot, and Staples.
A specialty store is a retail store that specializes in selling a specific product category. These stores don’t sell large quantities of different product categories. They are opposites to big-box stores like Walmart that have everything a customer needs. Lululemon is a great example of a specialty store because it sells sportswear only. People can shop for leggings, joggers, hoodies, shorts, etc.
Now that you know the difference, let’s jump into the examples.
Examples of Category Killer
There are many examples of category killers. These companies offer a great variety of products within a certain product category. If earlier people were paying attention only to the price of the products, now the situation is different. Large stores can succeed and crowd out less efficient businesses out of the market if they can ensure a seamless shopping experience both online and offline and support customers after the sale. Let’s now have a look at the large stores that managed to meet customers’ expectations.
Let’s take Home Depot, for example. This huge company supplies Americans with tools for homes and construction products. Simply put, all necessary products that help improve houses.
Another example is Barnes & Noble. This famous bookseller has many retail outlets in the US. People can find the books and magazines they want to read, music and movies they are interested in. Moreover, the store delivers customers’ orders for free.
To put it simply, category killers dominate the market and bring benefits both for their owners and customers. Hope our examples helped you understand the topic in more detail.
Last Updated: 16.02.2022