Per a Business Wire report, the Sunglasses market globally is forecasted to reach $38.8B by 2024 with CAGR of 5.5% from 2019 to 2024. Global retailers such as Belk, Neiman Marcus, Nordstrom, and Saks Fifth Avenues are some of the large sunglasses’ sellers. However, we were curious to understand the competition large sellers face and analyzed two questions – Are new sunglasses retailers emerging? If so, are they aggressively pricing to win market share?
To understand competitive dynamics, we prepared a list of sunglasses products from well-known brands like Ray-ban, Oakley, Calvin Klein, etc., and collected retailers’ pricing data daily for about two months from google shopping. We analyzed competition between leading sunglasses retailers’ and emerging competition in the US market and clustered retailers of these popular sunglasses brand by their annual turnover –
- Exceeding $100M. were then grouped as Leading Sunglasses Retailers
- Between $10M and $100M. were grouped as Emerging Sunglasses Retailers
- Less than $10M. We labeled them One-Off Sellers
The analysis of daily price offers from these retailers on exactly same products, matched to variant level, shows that Leading Retailers group have same prices on 74% of products, while 26% of products they have priced differently.
While on only 3% of products, Emerging Retailers have priced the same as Leading Retailers. They have priced slightly expensive on just 7% of products but have consistently made price changes to 90% of products which were cheaper than Leading Retailers.
It’s obvious that Emerging players must adopt a strategy to gain market share from established giants and these two months of daily google shopping retailer’s price data analysis shows that they are competing aggressively via product prices.
This can become a major threat to Large retailers. A customer can purchase from an Emerging Retailer with good review if the sunglasses’ price is cheaper from them vs a large incumbent.
This implies that Leading Sunglasses Retailers risk getting caught in the crossfire of fierce price competition and losing customers.
It is critical to perform a competitive analysis based on competitive clusters. Many leading retailers tend to ignore one-off eBay sellers, which is fine. Large retailers like Nordstrom compare the price against competitors comparable to itself. However, they should remain cognizant of emerging competitors, who can be extremely aggressive and pry away market share on its top-selling products. We strongly suggest large and emerging competitors analyze competitive pricing data regularly to stay on top of the price changes and win the competition.