Identifying a need doesn’t automatically lead to profits. You have to identify an unmet need or at least, a need that you can meet at a price that is both competitive and leaves room for your margins. Knowing your competition is nearly as important as knowing your customers. [level-members]
Fortunately, your main competitors should be pretty easy to identify. Draw a circle around your shop and all other wine shops and establishments that sell wine for off-premise consumption are your competitors at one level or another.
(How big to draw that circle will depend on factors like population density. The circle will be much smaller in, say, midtown Manhattan than it will be in rural eastern Oregon.)
Chances are, you’ll have competitors in a variety of classes, from small shops to liquor superstores to multi-location chains. (Depending on your state’s regulations.) Each will pose a different kind of threat to your business and you’ll compete against each in a different way.
Against some of these competitors, you’re best bet is to not compete at all. As in, if there’s a SuperMegaLiquorMart down the block, forget trying to sell Yellow Tail on price. You’re going to lose. But you can win by offering harder to find wines and a different kind of customer service. (More on that in a moment.)
Against other small shops your competitive advantage might be specializing in Old World wines, or wines of that style. Or you might have a particular region or varietal that you favor. Carving out a niche and becoming the leader in that niche is much easier than trying to be all things to all people.
You should visit your competitors to see what they’re up to. You don’t have to be all “cloak and dagger” about it. In fact, you might stop by every few months to say hello, talk shop and commiserate or trade ideas. While you’re there, pay attention to what your competitor is doing that you’re not. Or that she is doing noticeably better.
Don’t forget the online world. They’re not physically within that competitive perimeter we discussed earlier, but they are competitors in some ways. Amazon Wine has a growing presence, as do the services like Drizly and Drync. See what they’re doing and what they’re talking about to their clients. Their marketing budgets are probably much deeper than yours; no reason you shouldn’t learn whatever you can on their dime.
Finally, forget “better.” You’re probably not really better than your competition (and no-one believes you even if you are), but you are different. Focus on what makes you different. That’s what the market wants, and that’s what the market rewards.