Summary: Reasons To Go To One-Stop Home Improvement Store

Reasons to go to one-stop home improvement store

Consumers that wants to improve their home living conditions will go to the one-stop home improvement store to look for products. If the substitutes also sell products that can improve home living conditions, consumers have another option and may go to them instead. The home improvement industry will need to access the level of threat these substitutes impose and the impact it will cause on their industry.

Assessing the replacement threat of substitutes

Price of substitute product

How the substitute price their products will affect the price that can be charged for the industry product. If the substitute product is priced lower than the industry product, it create a price ceiling on the industry

If there is a high number of substitute available, the demand will become more elastic since consumers have more alternatives to choose from. This will limit the price of the industry product due to intense competition in the market.

The supermarket, departmental stores, and other smaller stores sell substitute product. However, due to the difference in pricing, the level of replacement threat is different.

Supermarket

Supermarkets sell a wide variety of products. They have different brands of the substitute product that fulfil same needs of industry product. The supermarkets have many outlets available, able to achieve EOS and price their products lower. Consumers will end up purchasing the cheaper substitute product instead and will result in loss of sales of the industry product. In this case, the replacement threat of substitutes is high.

Departmental store

Departmental stores sell a wide variety of products. They have different brands of the substitute product that fulfil same needs of industry product. There are many outlets available, able to achieve EOS and price their products lower. Consumers will end up purchasing the cheaper substitute product causing instead and will result in loss of sales of the industry product. In this case, the replacement threat of substitutes is

This is convenient to consumers as they are able to get most or all of the products needed in just one trip to the supermarket. They can save time on travelling to different stores to get different products.

The level of threat of the supermarket is high because consumers finds it more convenient and the substitute product is cheaper.

Departmental store

The departmental store is able to lower its product price due to EOS and this attracts consumers to purchase products from them as they can save more.

Departmental stores sell a wide variety of products and consumers can just shop around in the store to find and purchase the products needed. Departmental stores will sell different brands of the same product and consumers is able choose and pick the brands they want. This makes it convenient as consumer can save time traveling to different stores just to compare the price or features of the different brands before deciding the brand to purchase.

The level of threat of the departmental store is high because consumers can compare the different brands of the same product in one place and the substitute product is