Your biggest competitor is launching a new line. Your competitor was strictly a female intimates retailer, but now they’re offering undergarment options for men as well. For your competition and their shoppers, the announcement is probably exciting. But for you, it might strike panic. Should you delve into multi-market retailing to keep up? Keep your cool and think it through first.
If you’re considering expanding your catalog to include another category or another market entirely, take an honest look at your reasoning. Why do you want to make the change in the first place? Are you:
- Responding to customer requests for new products?
- Filling a need in your market?
- Looking for an increase in total sales?
- Reacting to your competition or personal desires?
If you answered number three or four, you should probably reconsider venturing into another market because the costs will likely outweigh the benefits. Jillian Hufford, a Marketing Analyst with NChannel, offers strategies for selling more of what you already have. After all, who knows your market better than you?
Hufford says retailers can nurture repeat customers by experimenting with pricing strategies, promotions, and loyalty programs. “Increasing the number of first-time buyers can also help grow your sales,” says Hufford. “This means there’s an opportunity to sell to more customers in your market who don’t have the potential to buy from you.” For example, launching an e-commerce site could help an outerwear retailer sell more products to their target customer, who also happens to be 800 miles away.
Some retailers have begun pairing their merchandise with services like complimentary, in-house tailoring, personal styling sessions, and more, to keep generating revenue and loyal shoppers. Today’s consumers will spend more on entertaining, purposeful retail experiences.
Of course, selling merchandise to a new market means you have an increase in prospective customers—and potential sales. But retailers should tread carefully. “Venturing into a new market comes with risks, so before diving into a whole new customer base, do thorough research and test your ideas,” says Francesca Nicasio, a Vend Retail Expert and Content Strategist.
Nicasio explains Birchbox, an originally female-only monthly box service, began receiving requests for a men’s version. “From there, Birchbox decided to test the concept by doing ‘small, limited-edition boxes during the holidays in 2011, trying to figure out if men or women would buy them.’” The trial period helped the company confirm the potential for growth, which lead to the creation of Birchbox Man in the following year.
Some retailers will softly launch a new product line on their online store before bringing it to their brick-and-mortar. Why? Because it’s generally less expensive to offer products online than it is to keep them stocked in-store with staff and leased space. If you’re not sure about committing to a new market, an online test may be a good idea.
One of the biggest downfalls to tapping into a new market is the cost of marketing to a new group. If your retail business sells contemporary clothing and footwear to young adult women, the same marketing materials and brand images aren’t going to cut it when selling to young adult men.
“You’ll have to make sure that your marketing takes a different approach for each niche,” says Heidi Anspaugh, a Digital Marketing Professional and Copywriter for Blue Stout. She explains that each group should have a personalized experience if you’re going to get them to convert, but these experiences should still hold true to your brand.
“Otherwise, you risk confusing your market about what your brand stands for, and even worse, losing revenue,” says Anspaugh. “But if you DO want to sustain multiple niche markets, it’s best to get really specific about how those markets differ and see if you can identify any common threads between them.
Images courtesy of Birchbox.
Of course, you can. For both markets, Birchbox is successfully marketing the same service, in the same industry, under the same brand, but with separate experiences. All too often, retailers make the mistake of relying on their current marketing efforts to support an entirely different set of shoppers.
The company posted a breast cancer awareness post (middle image on top) because it’s a cause that many women rally behind. The inspirational stairs next to that post have nothing to do with Birchbox products, but inspirational messages and Pinterest-worthy photos resonate more with women and add to the brand’s image.
Again, the 2017 World Series has little to do with beard maintenance, but you know what? It probably gave Birchbox a handful of cool points with its male customers. If retailers are ready to take on the responsibilities that come along with targeting a new market as Birchbox does, and they’re looking to fill an evident need, then they should definitely tap-in.
Register to attend the OFFPRICE Show February 10-13 in Las Vegas if you’re expanding your current apparel, footwear, and accessory offerings, or making the leap into a new market.