According to IBISWorld, the clothing boutique industry is worth roughly $21 billion, but at the same time is also highly fragmented. Meaning that no single player makes up more than 1% of the total industry revenue and every retailer is having to fight tooth and nail to even gain any market share. Due to the fact that boutiques are typically small, single-location enterprises, they thrive on catering to niche markets.
You have to know exactly who to target and shop for if you want your boutique to be profitable and successful at the end of the day. Don’t worry, this is where we come in! I’m sure you got a basic understanding of customer demographics in our previous post about “How To Buy Inventory For Your Customers,” but now we are going to take a deeper dive into buying and shopping for your unique demographic.
Arguably, the most crucial element to understanding your boutique’s customer demographics is market segmentation. Market segmentation is the important and necessary process of dividing your potential consumers into different categories based on common needs and distinguishing characteristics. There are several types of key market segments used in boutique retail clothing markets:
● Gender-Related Segments
● Age-Related Segments
● Income Related Segments
● Geographic Segments
● Purchasing Behavior Related Segments
● Lifestyle Segments
You may have had a target customer base in mind when you first established and opened your boutique, but trends and markets change over time. It might be time to re-evaluate your market and your current customer base to ensure that you are still buying and stocking inventory that best matches the needs of your clientele.
Defining a narrow target market is a key to success for boutiques, whether you operate locally, online, or both. A well-defined target market identifies customers based on demographics. So it’s a good idea to spend a good deal of time working out a comprehensive definition of your target market, as this step will influence the decisions you make in all other marketing plan sections.
A great first step is to establish your brand and what your boutique has to offer. Defining yourself first and foremost is necessary before you begin to figure out what type of people would be interested in purchasing your product offerings. Once you have that established, then you can determine and understand who your boutique’s primary customer and their demographic characteristics. Your primary customer doesn’t necessarily have to be a part of your largest customer base. They could be the customer that spends the most money with your store, earns you a significant profit margin, or are just likable and easy to deal with. The biggest takeaway for you is to take the time to understand who your customers are and to continue to update the customer profile that you build. This will allow your boutique to stay on track and to grow.
Is there anything holding your boutique back from understanding your clientele better? Do you have any questions on how to go about building an accurate customer profile? Let us know in the comments below!