Competition Between Specialist Stores and Non-specialist Retailers
Specialist stores can generally offer more varieties of stock than their non-specialist competitors; for example, a supermarket may offer only the top 50 bestseller paperbacks, but a specialist bookstore will typically offer a choice of thousands of books. Specialist bookstores will also be able to offer specialist knowledge about books, whereas supermarkets will simply treat books as commodities by giving them shelf-space.
However, the top 50 bestsellers represent a disproportionate share of the overall revenues available from selling books, and supermarkets can use their greater buying power to undercut bookshop prices, and supermarkets selling bestsellers have thus presented significant competition to specialist bookstores.
Similar dynamics apply to camera shops, where digital cameras have now become a commodity sold by general electrical goods retailers, and computer shops, where low-end computers are now beginning to be sold by supermarkets. In each case, the larger competitor concentrates on serving the lower end of the market, and provides the consumer with relatively little choice, but absorbs a disproportionate amount of customer demand in doing so.
In many cases, larger supermarket chains have taken on aspects of department stores, by offering in-house pharmacy services, an area where specialist knowledge cannot be eliminated.
Specialist stores are also increasingly facing competition from web-based retailers which can also offer a wide range of stock. Again, the book market is a clear-cut example of this trend.
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