Knowledge and cooperation
Knowing what’s going on in the market around you brings advantages and resources, but traveling farther away and abroad also helps immensely in maximizing your bakery’s potential. Finding out what you’re peers in the industry price their products at, how they merchandise and display, the quality of their offerings, the demographic of their customers, and how they bring those customers in the door, will help you in making your bakery competitive and the best it can be.
Where to go
Get a feel for your direct competition by shopping the other local bakeries in your metro area, and while you should shop other bakeries with a competitive mindset, don’t be afraid to interact and make friends with your immediate competition. “What’s really nice in this city is that there’s a lot of cooperation between restaurants, bakeries and coffee houses,” says Dan Einstein, co-owner with wife Ellen of Sweet 16th Bakery in Nashville, TN. “We visit each other quite frequently, if nothing else to say hello, but also to see what everybody’s doing.”
Checking the internet provides a quick and easy way to see what the local competition is up to, as well. “Locally, we check websites and Facebook pages of nearby bakeries,” says Jackie Bishop, owner of Art Eats Bakery in Greenville, SC. Whether in person or on the web, keeping abreast of the local bakery scene helps you find your own fit within the community.
While it may not be your direct competition, looking at what bakeries outside of your metro area and abroad provides a great way to get ideas and inspiration that may give you innovative ideas that aren’t available to your specific location. “We check the web for bakeries around the world,” Bishop says. “The edible lace that we are doing is very popular in England, but doesn’t seem to be in our area. We’re trying to do more cakes with it for our showroom and have had great response.”
For the Einsteins and Sweet 16th, traveling outside Nashville provides them promotional and merchandising ideas more than staying at home in Nashville. Sweet 16th closes twice a year for three weeks at a time and typically goes to one place within the United States and one outside of the States. “We’ll get a lot of ideas about things we haven’t done or a particular approach to marketing or signage, or just flavor inspirations. I think we draw more (promotional/merchandising) from outside of the city than we do from within our competition,” Einstein says. “It may be just one little thing, but it gives us a new twist on maybe ten things that we’re doing already.”
What to look at
When you go into another bakery to assess it, look at two different aspects of it. First look at the bakery itself in general, and then look at specific products that the bakery offers. “I think we first look at the demographic,” says Einstein. “Who is the customer, what kind of traffic is going in at that particular time on that particular day? We also look at how things are laid out, how things are displayed in the cases, what’s up front, what’s missing, what would a customer walk by and not even notice, “he adds. “I think we take notice of merchandising. How are we laying things out in our cases every day?”
In terms of the competition’s product, “The most important thing for me is quality and value,” Bishop says. “I do look at their pricing for the quality they produce, but I am mostly looking to see how they are attracting clients.”
“Taste is first,” Einstein says. “The way it’s packaged, how does it hold up? After a day, is it still ‘rockin’ or is it not happening?” Einstein approaches the assessment of a product the same way that anybody would on a consumer level, but with a more critical eye, he says.
It’s also important to remember that your customers will not view things with the same critical eye that you, as a baker by trade, will. “Most people are picking it up and eating it,” Einstein says. “It’s very subjective and it’s of the moment. You don’t want to overanalyze.”
It’s also important to remember that someone else’s pricing doesn’t play too much of a role in the way that you price your products. You know better than anyone else the value of what you make and what it takes to make it. “I try to stay in the upper-middle pricing,” Bishop says. “We want to be reasonable and still charge enough to keep our quality and service the best.”
Neighborhoods differ within metro areas. Knowing your neighborhood affects your price points and needs consideration when pricing your products. “Certain neighborhoods can sustain a higher price point, certain ones can’t,” Einstein says. “We don’t necessarily make our decisions based on what anybody else is doing. We base it on what feel is palatable for our customers.” But knowing what your local competition’s pricing will give you a relative idea of what the boundaries might be, Einstein adds.
While competition promotes sales and health for all businesses involved, do not go overboard with the competitive spirit. The retail baking industry thrives on the sharing of information and bakeries helping one another. Building a community within your competition guarantees all parties involved will reap the benefits of a community.
It’s a 50/50 proposition between being competitive and helpful with the fellow bakeries in your area, Einstein says. “A lot of times somebody from another bakery will bring us a little gift box and we’ll do that to someone else,” he says. “We’ll say ‘give us some feedback’ if it’s something new.” Einstein and Sweet 16th also give referrals when a customer calls and wants something that they don’t do. “And thankfully in return, we get referrals as well,” he adds.