There’s a lot to be said for vertical markets, and one of the contributing factors to their success is how people are brought together for a specific purpose, and with a common goal in mind. With a vertical market comes a higher level of competition, due to the workings and industry existing in an overlapping manner. The benefits of vertical markets are significant, but the competition means one has to be up on their business strategies.
Virtual Retail Plus works a lot within the vertical market world, and today we’re going to dive into some strategies that are ideal for those competing in a vertical market. Take a look at some of our strategies below, and contact us to schedule a free retail POS software demo!
Horizontal vs. Vertical Markets
Just like the horizon stretches across the landscape, horizontal markets can be thought of in the same manner. A horizontally-integrated market has one company providing all of one product, which results in virtually no competition from others. Transportation, ease of communication, and technology have made horizontal markets increasingly common for some industries in the past several decades. In some ways, a horizontally-integrated market can be relayed as a monopoly, as it provides one product, for a number of businesses.
Horizontal markets can be defined in several ways: They are:
- Much broader than vertical markets. A great example would be how Google Drive or Google Mail is utilized by so many companies, and the companies can be vastly different from each other while still using Google.
- Nearly always cooperative and seeking many opportunities. If a mining company worked specifically with coal, for example, they might distribute their coal to more than one electric or gas company.
- Wanting to market to a general audience. Apple products and devices are implemented in schools, homes, businesses, and more—they are not limited to a specific demographic.
Investopedia summarizes vertical markets extraordinarily well, stating that “A vertical market is a group of companies that serve each other’s specialized needs and that do not serve a broader market.” Whereas horizontal markets are much broader, vertical markets can be thought of in a much more specific sense. Everything is relatively more specialized, as vertical markets work with a significantly more limited audience. In some ways, a vertical market has a bit of a niche quality to it, as they are comprised of a group of businesses that share the same industry.
A great example of a vertical market involves software. Many restaurants utilize the same type of software, all of which is designed specifically for a restaurant setting. Hotels similarly will use a software that is very specific to hotels—the company that designs hotel software will not seek a client who is a clothes retailer. This is where the competition comes into play, because everyone is working in the same industry. However, money can be saved in a vertical market, as everything is produced within the same market.
Business Strategies for Vertical Markets
It is essential to come out swinging with a vertical market, much of this is attributed to the higher levels of competition. Take a look at some recommendations from various CEOs and financial leaders for ensuring your vertical market is on the road to success!
As CEO Vineet Jain said in an interview with Forbes Magazine, “When attacking a vertical, I believe the most important success factor is to make sure all aspects of the business are aligned in a unified effort. From product marketing to sales development, engineering to business development, everyone should be on the same page and have a collective voice.” Because everyone involved is part of the same industry, there needs to be transparency and open communication across the board to ensure that everyone is driven towards a common goal.
In a more specific industry, being aligned and unified is essentially a standard. Horizontally-integrated markets look to a much broader demographic and overall scale, and are their own entity. As vertical markets are more confined (yet working with several other companies), operating with fidelity is critical. Jain, the CEO of Egnyte (a storage solutions enterprise), went on in the article to say, “If you don’t have a strong, unified strategy then you run a real risk of creating disconnect and confusion both internally and externally, which will ultimately lead to a failed attempt at gaining market share in a particular vertical.”
With enterprises that offer a semblance of niche marketing, you can’t just exist in your vertical market—you’ve got to own it. As a voyeur in the vertically-integrated world, you have a real opportunity to set a standard of performance. Jain offered excellent advice on this idea, stating that “With this great reward comes great responsibility. Once you have secured yourself as a clear leader, it is crucial for you to listen closely to the customers within that vertical, stay innovative, and continue to raise that bar for your primary competitors.”
Build up customer relationships that go above and beyond the expectation. The customers you’ll be working with in the vertical market are those who are already interested in what you have to offer, which makes a substantial difference in lead generation. Maintain their business and attract new clientele through making it known that you set the bar high for your customers, and that your services or products are the epitome of what’s on the market.
Invest in the Best
There are always things in life where shortcuts are a great idea. Microwaving a meal instead of using the oven, or taking a back road to cut down on your commute are great times to take a shortcut—business investments are not. Invest in a software system that is going to make significant improvements for your company, as well as ease the day-to-day processes to create a more fluid enterprise. To create a successful vertical market, we know that we need to be unified and work towards building a strong reputation. These two strategies can be achieved with the help of a third strategy: purchase and work with an ideal software system.
Especially necessary for maintaining a great communication system, your vertical market needs to find a software system that can do it all. Visual Retail Plus offers incredible software solutions to meet your vertical market. From clothes retailers, jewelers, bookstores, restaurants, gift shops, furniture stores, and more, we have the software that will be incredibly beneficial to your company.
Each of our vertical POS retail systems offers features that are unique to each type of retailer or business. Have a clothing or shoe store? With our software, you can keep track of inventory, organize products as a gift package, view recommendations for new orders, interact and engage with CRM, and so much more. Looking for an updated software for your book store? Our vertical market software includes ISBN searches, the ability for automatic pricing changes, and seasonal planning features, just to name a few!
Visual Retail Plus is the cherry on top of the vertical market strategy you need to be successful. Take a look at how our software can help your business, and see what each software can offer. What your store needs is what our retail POS software has, and we are excited to share it with you. Contact us today!