Every consumer has wants and needs. Every business has wants and needs. Therein lies the challenge in development: balancing what the community wants with what businesses can realistically provide. Sometimes consumers wants are really needs and sometimes the things consumers need aren’t as appealing as what they want. One of the ways to achieve the necessary balance is to look at market gaps, and encourage people to address areas of need.
Clothing options (or lack thereof) is something that we hear from the public on a consistent basis. But, we also hear several wants that don’t necessarily coincide with identified gaps in available market data. Market gaps exist when consumer models indicate that our local consumer capacity to spend in a certain market category is greater than actual retail spending in that same category.
For example, the projected consumer expenditures (demand) for 2013 in the category of Jewelry Stores within a 25 mile area (NACIS Code 44831) was $3,043,776. The actual consumer sales (supply) was $3,887.794. So, we exceeded market expectations in this category by $844,018. This indicates a “negative gap” or an area where the market may be saturated.
A little disclaimer- there are two basic reporting services for market data that are consistently used: Esri and Nielsen Claritas. Each obtains market data in different ways and makes some market calculations utilizing their own unique approach. Thus, the two services can have significantly different numbers for the same product category. Additionally, the existence of a market gap in a consumer category does not guarantee success. Product selection, marketing, aesthetics, price point, cash flow management, service, advertising, location, passion, product knowledge, hours of operation and a myriad of other factors contribute to a successful business. So, although a market gap indicates that a market opportunity may exist, it does not guarantee a successful business venture.
In the category of clothing stores, new market data indicates gaps in the following categories within a 25 mile ring around Emporia:
Men’s Clothing- $1,370,594
Women’s Clothing- $2,818,803
Children’s, Infants- $1,384,457
Family Clothing Stores- $3,960,057
Clothing Accessory Stores- $54,466
Many people will look at those numbers and say “See, we can support a (insert large chain here)”. But remember, our market demographics AND sales have to match a company’s profile. We must also remember that it is healthier for a community to create diverse options, which means that these market gaps should be addressed both by existing stores and new boutique options. Market analysis requires a nuanced approach that takes into account the unique nature of the local market, disposable income, market trends and changes in consumer behavior. Clothing sales on the internet, for example, change the way people obtain clothing. Brand addiction to specific stores that aren’t remotely interested in Emporia can also impact consumer buying habits (and travel).
Each clothing category contains item subcategories. These subcategories show how the local market compares to the nation expressed as a percentile. They also show the negative or positive change in purchases within subcategories. Let’s look at Men’s and Women’s clothing options within a 25 mile ring of Emporia.
The ideal market would be in the 100th percentile. Lower numbers show a market gap.
Men’s- We score in relatively low percentiles in the following areas:
– Men’s Sport Coats/Tailored Jackets (66th Percentile)
– Men’s Sweaters/Vests (81st Percentile)
– Men’s Sportswear (85th Percentile)
– Men’s Nightwear (85th Percentile)
– Men’s Shirts (88th Percentile)
We only see positive sales growth in the categories of Men’s Coats/Jackets and Men’s Undergarments with the largest declining sales area in the category of Men’s Coat’s/Jackets. This would indicate that male clothing customers in the area are more casual. Empirical evidence validates the data. Think about professions that once wore suits and ties every day that now simply require a dress shirt or polo. Consumer tastes changed the demand of certain categories of men’s clothing.
Women’s- We score in relatively low percentiles in the following areas:
– Women’s Suits (37th Percentile)
– Women’s Skirts (40th Percentile)
– Women’s Sport Coats/Tailored Jackets (62nd Percentile)
– Women’s Vests/Sweaters/Sweater Sets (81st Percentile)
– Women’s Active Sportswear (82nd Percentile)
Every women’s clothing category shows a negative sales trend, and the most pronounced trends closely resemble the categories listed above. This indicates that casual clothing is more prevalent for women shoppers in the Emporia area than the national average.
We have full market info for each market category in the Emporia Main Street office, and we strongly encourage individuals looking at opening up a retail storefront to consult Emporia Main Street and the Small Business Development Center at Emporia State University. More extensive data points can showcase opportunities that savvy entrepreneurs can take advantage of.
I realize that numbers are considered “nerdy”, and that’s fine. We as a community must communicate reasonable market opportunities to the local entrepreneurial base. When we fail to look at market supply and demand and simply communicate “what my friends and I want” or communicate the mantra “they (stores) wouldn’t come here if they didn’t think they could make it”, we create unrealistic market expectations, building vacancies and a disengaged consumer market.
If your business wants to capitalize on market opportunities, if you need assistance in starting up or expanding your business or if you simply want to brain-storm some business development scenarios, contact Emporia Main Street. We are here to offer real help you can use.
Read this article and more in this week’s Emporia Main Street E-newsletter!