A category killer is a large retail store that has a vast product choice and attractive prices. It dominates over other stores in the same product category and drives its rivals out of the market. Category-killer stores have a competitive advantage due to their broad range of affordable products 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 stores are large, powerful, and competitive. They can easily crowd out their rivals — small retail stores. Large retail chains' primary benefits include great product choice, large-scale marketing campaigns, and low 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 category. Once the store grows into a chain, it can gain dominance in the market due to its expanded reach and large capacity. Small retail stores can’t stand up to the competition and leave the market.
Big-box stores reap 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, including big discounts and free shipping. As a result, category killers offer lower prices and get a large market share, and small retailers can’t compete with them.
Now that you know how this works, let’s proceed to the next section to make the difference between a category killer and a specialty store clear.
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 all-in-one store that dominates a product category. Big-box stores' market penetration, pricing, and product choice provide them with a competitive advantage and the ability to crowd out smaller stores. Examples of category-killer companies include Walmart, Home Depot, and Staples.
A specialty store is a retail store that specializes in selling products within a specific product category — these stores don’t sell lots of various products. They are antipodes 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.
Now that you know the difference between these terms, let’s review a few examples of category killers.
Examples of Category Killers
If earlier people were paying attention only to product prices, now a seamless shopping experience both online and offline and customer support after is what can make a company stand out from the competition. Let’s have a look at category-killer stores that managed to meet customers’ expectations.
Let’s take Home Depot, for example. This huge company supplies customers with tools, construction products, and other items that help with home repair. Another example is Barnes & Noble. This famous bookseller has many retail outlets in the US, selling books, magazines, music, and movies and delivering customers’ orders for free.
To put it simply, category killers dominate the market and bring benefits to both their owners and customers. Hope our examples helped you understand the topic better.
Last Updated: 25.11.2022