Who needs one more boutique on Allen Avenue?
Allen Avenue is already full of so many boutiques that opening just one more is laughable.
You begin to wonder; ‘what business sense is behind this?’
But what if that is where your passion lies?
The point is, you may not come up with a novel business idea, but there are opportunities lurking in the saturated market too. It only takes a lot of hard work and creativity to see and benefit from these opportunities.
So, how do you thrive in a saturated market, where product differentiation is a lost cause; and still take home your fair share of the consumer’s wallet?
1. Find your niche
Who says you cannot build your world class boutique? Maybe just not on Allen Avenue. One of the research to do before you venture into your business is to find out which sects of the population are not serviced by the existing market. If you discover one or more, the smart thing to do is to make these your own niche and establish you USP (unique selling point) around it. Who knows, you could still find your unique niche on Allen Avenue. Another advantage of establishing your niche first is that it helps you in market segregation, so that you can efficiently focus your marketing effort.
2. Try strategic pricing
For a price sensitive market (and most markets are), it is advisable to focus on increasing turnover, even if you have to sell at a low margin. High turnover gives your business visibility and places your product in every home. With high turnover, you can also benefit from the economies of scale. Eventually, you may be able to stabilize the price after effectively penetrating the market.
3. Sell a loss leader
Imagine a toy shop selling diapers at a price so low, The Honest Company cannot compete. The diapers is a loss leader useful to lure customers to the shop, where they see and purchase other high margin toys. You should ensure that your loss leaders are necessities, and if possible disposables; this generate a higher traffic to your business than luxury goods.
4. Try freebies
If you can achieve this, it works like magic. It is common to see customers buy stuff they do not need, merely because they want to receive freebies. The buy 2 get 1 free principle entices customers to buy in multiple so that they can earn the attached gifts. This will definitely increase your revenue.
5. Render value added services
This might just be the only product differentiation you can achieve. Add other values to your products. Give more benefits to the customer. To achieve this, you will need to continuously innovate. A major theme in value added services to customer is convenience. This answers the question on the ease of placing your product in the customer’s hands. You should keep transaction time at the barest minimum and also treat feedback with utmost urgency. A reliable and quick delivery system should also be made available.
6. Stay on top of the trend
Remember, this is a saturated market, and it is saturated for obvious reasons; the entry barrier is low and the market is large. So, because of the low entry barrier, you should not expect to be the newest entrant for long. In fact, that status changes the very moment the open sign is hanged on your door. The need to stay on top of trend is critical, and you cannot afford to merely keep up with the market pace. You need to seize the market and dictate the pace!