Monday, August 24, 2015

Strategies for Retail Niche Building

Competition is not always a bad things. Depending on the retail industry, competition and multiple retail offerings can drive even more people to your district. The research is clear on this point, one critical factor in the success of urban retail districts is "store density." Why? Because being able to accomplish multiple shopping tasks in one trip makes a district convenient. And simply put, people will travel further for that level of convenience. [LISC, New and Definitive Evidence on What Works to Revitalize Urban Commercial Corridors, 2011]

Certain retail categories in particular benefit from what economists call "agglomeration economies" - clusters of businesses that benefit from co-location. Together these firms attract more customers than they could alone. That is often why you will find restaurants clustered together. Another fairly typical example are furniture stores. In some places a "Diamond District" or "Flower District" are good examples of industries that benefit from the ability to draw both suppliers and customers. 

I recently came across another example while walking in Manhattan the other day. I had about an hour to kill and went to Yelp to see where I could accomplish some "retail therapy". What immediately became apparent to me was that I was adjacent to a cluster of vintage stores. For those unfamiliar with New York, the Gramercy neighborhood is also a very high-end community, so I had no doubt that these stores would have a very nice selection of merchandise. Without a moments hesitation, I set out to explore.
I wasn't disappointed. $30 later, I had three shirts and a dress to show for my excursion! I have been living in New York now for longer than I care to how did this great retail niche get by me? I began to think about how these businesses could improve upon their market position and start attracting more people.

If your district has a niche of some kind, here are a few ways in which you can support their marketing efforts.

1. On-Line Listing and Categorization. Ensure that these businesses are listed on the most common search engines and they share similar categorizations. For example, each of these stores popped up when I searched "vintage". (Admittedly I started by search looking for "apparel" and then realized how many stores were of the vintage variety")

2.  Organize! Get your niche firms together and see if they want to take out a joint advertisement in a local media outlet. They will benefit from coming together on a regular basis and discussing opportunities to further enhance their visibility and marketing efforts.

3. Business directory. Consider developing a directory of your niche stores

4. Event marketing. Hold events that highlight the niche. How about an "evening vintage store crawl" with wine at every stop? You could even develop a hashtag - #vintagestroll anyone?

5. Branding. Consider branding the district. "Vintage Alley" has a nice ring to it...

6. Tenant Recruitment. Consider growing the niche by recruiting additional businesses in the category. Together with a strong marketing campaign this can help enhance the regional appeal of your district and grow the customer base.

The ideas are endless!

Below are the images of the four local thrift stores - what I find interesting is that they vary tremendously in quality. Vintage Thrift and Housing Works are much more high-end in their displays. The Salvation Army and City Opera were less concerned about the aesthetic appearance of their stores. But all had great merchandise. I know at least one person who will be returning

Vintage Thrift has a high-end look and feel. Too bad it was closed on Saturday when I stopped by. The store is run by a Jewish Organization and they were closed for the Jewish holiday. 

Housing Works is one of the premier thrift stores in New York. The proceeds go to AIDS prevention.  

The Salvation Army has the largest retail spot of the bunch - and also had the lowest end look and feel. 

The smallest store by far...but nicer things and from what I could tell, a higher price point than the others. 

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