In a retail context, what does the term "direct competition" refer to?

Direct competition refers to the situation in which stores offer the same or very similar products. This means that customers can choose between these stores when looking to purchase a specific item, making these businesses direct rivals. For instance, if two clothing retailers sell similar styles of apparel, they are engaging in direct competition for customers within that specific market.

The concept highlights the importance of product differentiation, pricing strategies, and customer service, as businesses strive to attract the same customer base. An understanding of direct competition helps retailers to position themselves effectively in the market, catering to consumer needs and preferences while also considering the tactics used by similar establishments in their competitive landscape.