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Types of Retail Competition: Definition & Examples

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Instructor: Beth Hendricks

Beth holds a master's degree in integrated marketing communications, and has worked in journalism and marketing throughout her career.

Competition in retail is fierce, but did you know there are different types? In this lesson, you'll get a look at the different types of retail competition - intertype, intratype, and divertive - and what each means. Updated: 03/31/2021

Retail Competition: Background

The battle of the drugstore brands is big business in the United States—more than $250 billion to be exact. And, its key players are stores you probably see on just about every corner in your community, Walgreens and CVS. Both stores match up category-for-category with each other, from cosmetics to household items to prescriptions.

To the average consumer, this type of competition simply looks like one brand versus another. And, it is. But it also represents one of the major types of competition that exists in the retail landscape, known as intratype. In this lesson, we'll take a closer look at intratype, intertype, and divertive competition in retailing.

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  • 0:04 Retail Competition Background
  • 0:50 Retail Competition Types
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Retail Competition: Types

Whether it's drugstore versus drugstore or drugstore versus superstore, there's a retail competition classification to represent it. Retailers are classified as a particular type by the North American Industrial Classification System (or the NAICS). These classifications are determined for the purpose of looking at retail data in the United States economy. For example, if researchers wanted to look at how single grocery stores in the country are performing, they can go to that classification and gather relevant information. Here are the main categories of retail competition.

1. Intratype

In the opening scenario, we saw an example of the intratype category of retail competition. This is when two or more of the same type of store compete against each other to earn the business of consumers. It might be two drugstores competing against each other or a cluster of grocery stores in the same community fighting for the same pool of customers.

Intratype competition is the most common form we find among U.S. businesses. You don't often see a CVS trying to take on a superstore like Walmart. Instead, they focus their energies on trying to be the best of the drugstore chains. Some other examples of intratype competition include Kroger versus Publix, Family Dollar versus Dollar General, Petco versus PetSmart, or Macy's versus Belk.

2. Intertype

Competition that falls under the intertype category pits two or more different types of stores against each other for the same customers. Again, this relies on the way the stores are classified by NAICS, such as a drugstore competing against a superstore. These retailers, even though they are different, sell similar products. For example, when you go into a grocery store these days, you might have options to buy fresh flowers, decorated cakes, or a greeting card. In this way, grocery stores are competing with florists, bakers, and dedicated greeting card stores like Hallmark.

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