When starting a fashion business, much like starting any business, there are some rules that apply and are there for a reason. Rule number one is to know your niche. That knowledge is the foundation for any successful business (be it a product or service-based) because it has an influence over every aspect of the company. But, deciding on a niche isn’t always easy. In this article, I will show you why knowing your niche is correlated to the success of your business.
What a phenomenal time to be alive. Never has it been so easy to launch a business from the comfort of your home, get a global audience and be anything you want to be.
And yet so many fashion brands and businesses don’t make it past the launch line. The lucky ones that do…. Work hard, struggle to keep the business afloat and despite their best efforts, most close their doors a few years later, with not a lot to show for all the hard work put in.
One of the most common reasons for fashion brads to fail is their desire to run before they can walk.
By choosing to compete against the big brands from the very beginning and consciously choosing to follow closely and emulate unquestionably what they do, startups and small brands fall into a trap.
Being a small new brand in an overly competitive and diverse market with no clear point of difference is a trap many do not realise they are in and rarely attribute it to their ultimate failure.
Yet this alone lies at the base of any other problems which later arise and lead to challenges and ultimate demise.
The fix is easy. Identifying a clear customer and target market is an important prerequisite for success not just in the fashion industry, but for any business anywhere.
American entrepreneurs often speak about the need to identify a niche in the fashion business that is an inch wide and a mile long. A piece of wise advice completely ignored as far as fashion businesses are concerned.
And because the nature of the fashion industry is very much inverted in thinking – in other words only looking at what others within the industry are doing and trying to copy or beat them at their own game – the result is star ups with next to no financial resources and industry knowledge trying to take on the big boys.
Launching large collections and trying to target a broad and multi-layered demographic with no clear point of differentiation.
Related reading: How to Design a Commercially Strong Fashion Collection
But it wasn’t always like this. Those brands that have stood the test of time and we now admire, emulate and compete against – they took years to get to where they are now.
Examples of Niche in Fashion Business
Let’s take Burberry for example. The brand was founded in 1856 when 21-year-old Thomas Burberry, a former draper’s apprentice, opened his own store in Basingstoke, Hampshire, England. By 1870, the business had established itself by focusing on the development of outdoors attire. In 1879, Burberry introduced in his brand the gabardine, a hardwearing, water-resistant yet breathable fabric, in which the yarn is waterproofed before weaving.
Adapted to meet the needs of military personnel, the “trench coat” was born during the First World War due to its being worn by British officers in the trenches and its popularity extended well after the war when civilians adopted the coat for everyday use. To this day the Burberry trench coat is a staple item, present in every collection and treated as a core and seasonal item that has never and will most likely never go out of fashion.
Another example of an early niche start is the British luxury brand Smythson. The founder – Frank Smythson opened his first shop on Bond Street, London in 1877 as a purveyor of all kind of luxury small items.
It was in 1908 however that he developed the first small, featherweight paper gentlemen’s pocket diary which catapulted him into fame and riches. To this day the brand is largely renown for its stationery and paper diaries, despite the fact that for many years now the brand has been focusing on leather goods and its largest source of revenue is luxury small leather goods and bags.
Look around you – more examples are everywhere. Diane Von Furstenberg started and to this day is associated with the wrap dress. Ralph Lauren is synonymous with the Polo shirt. Gucci and the leather loafer, Prada and the black nylon backpack and many, many more.
It is clear from these examples that these brands weren’t overnight sensations and they took years to come to be the stalwarts they are known to be today.
So if this is the recipe to success.
Let’s see how this can be applied in today’s day and age and what s the right way to launch a brand.
Being that creative-minded people process information better visually, it is, therefore, easier to explain the concept of niche-ing visually.
For this purpose, the image of a “tree” is the perfect aid.
There are 3 Stages in Business Development
1. The Initial Phase
Starting a business and planting a tree is rather similar – in both cases, you need a seed (of an idea) to begin.
Once planted in the ground or your mind – this seed needs to be given the right conditions to begin growth and start growing roots.
The roots are what anchors the tree to the ground and allow it to keep growing.
In business, it is much the same. The roots represent the research that must be carried out in order for the idea to take shape and be developed potentially into something more than just an idea.
Every root is a form of research that must be don’t to validate the idea and be able to progress assuredly onto the next phase.
For example – once you have an idea it is advisable NOT to jump and immediately form a company, throw money at it and launch a business without first verifying that the idea has potential. What does that mean?
It means you need to look at the following in greater detail:
Is there another similar or the same as your ideal product or service already on the market?
If no – great. But don’t stop here…. Ask why not? Is your idea so new that no one has thought about it? Or have others thought about it and tried executing but encountered problems in the way. Are you too late or too early with your idea?
If yes (as it often is the case that there is someone else already doing what you have in mind) how will you be different or better than your competitors?
Who are your competitors and how strong are they as such? How long have they been around? What is the main product or service contributing to their revenue? Is the product/service similar to your idea their main source of revenue or something else?
b) Target Market
If the above checks out and you still feel enthusiastic about your idea, then working out what your target market would be is the right next step.
It is important to know where you aim to be on the market with your product. Will you cater to the masses and therefore offer a lower-priced product? Or will you be a luxury brand offering product and services to a select group of customers and therefore be at the top end of the market?
Clearly defining here who exactly you will be aiming your product or service to, is imperative.
As an old Jewish proverb says: “ …you cannot dance at two weddings” You must make a choice for now.
This may change later as you progress your research or after launching your business you may spot new opportunities, but for now, you must choose one market only and commit to pursuing only it.
c) Perfect Customer Profile
Once you are clear on your target market you must clearly define the type of perfect customer you would like to serve. Whether you are planning to sell products ( clothing, accessories, shoes…etc) or services (styling, makeup, photography, pattern cutting..etc) knowing who your ideal customer is or would be is imperative.
You cannot serve everyone. You cannot sell your product to everyone. If you aim and look at everyone, you will end up with no one.
This is particularly true today when we live at an age where we are seeking uniqueness and more personalisation and individual attention.
To define your ideal customer, start talking to your friends and family and widen that circle to more people and tell them about your idea. Ask if this is something they may be interested in to buy or have they already? When and why?
Dig deep, ask many questions of a wide variety of people, take notes and over time you will start getting a clear idea of who your potential perfect customer would be. Try to be as specific as possible. Stay away from general descriptions like “ the modern woman”, “female entrepreneurs”, “ambitions CEOs”…etc. Give them names, age, professions and aim to be able to describe them (if asked about them) down to the smallest details as you would do with a best friend.
d) Route to Market
Once the above is done, think about how you would sell your products. We are lucky in today’s day to be able to reach customers directly or employ the services of others. Both have implications on your resources required as well as financials needed. Not to mention your profits ultimately.
Thinking about it in advance, finding out the finer details and the pro’s and con’s of all available choices will allow you to continue developing your future business on solid foundations and make informed decisions.
e) Product Development
Having thought and researched into the above, it is a natural progression point you’ll reach when you would start to think about turning your idea into an actual product (or service).
What would you need for this to happen? What materials? Who would you need to help you execute the idea and turn it into a product?
Ask and research online initially and then pick up the phone. Speak to people within the industry and little by little you will start hearing the same advice, the same suggestions and you’ll begin to see the dots you need to connect in order to begin execution.
As you learn more about product development and following some of the decisions you have made until now, about the market position you’d like your business to be in, for example, you must not forget to consider manufacturing. Depending on where in the market you’d like your product to be – you would have different manufacturing options in front of you.
Related reading: Fashion Manufacturing 101 – Start Here
Each one will have different implications for your business and require different financial resources. Being open to explore them at this stage is important as it may highlight some challenges or problems in some of the thinking you have done until now and perhaps even require you to take a few steps back and course correct.
The price at which you sell your product or service is extremely important to the success of your future business. If you get this part wrong – you most likely won’t make it far.
Again, everything you need to know is out there online, all you need to do is commit to learn as much as you can and inform yourself. So with this in mind – try to work out what your manufacturing costs may need to be? What can or should your profit margin be?
Deciding on your pricing will largely be affected by your choice of route to market, but if you have thought about it and decided on a path, then working out your pricing will be easier.
One thing to remember here is that pricing is an art. It takes time and much back and forth to get your prices to work for you (the business) and for your target customer and target market. So take time, be patient and consider some help if needed, but do not rush it and underestimate the importance of it.
h) Marketing Strategy
How will you market your brand? Just having a website and switching it on is not enough.
The fashion industry (and any industry for that matter) is crowded.
We no longer compete on the local level, but against global competitors and some with incomparable power and finances.
How you market your brand, business, product or service is important for obvious reasons.
To do it right, you need to have done the work on getting to know who your perfect customer is and target market.
ONLY and only then you will be able to know where to find your potential customers, how to speak to them and how to market to them most effectively.
Remember you are not going to talk to everyone. You are going to market to a very select group of people identified as you perfect customers.
Based on your research done earlier – you will know exactly what they like, publications they read, social media they prefer, holidays you take …etc
i) Launch Plan
Thinking about what and how to launch your business to the world is important and it requires some effort in outlining the steps and effort required.
So many entrepreneurs think that just announcing to the world that they are open for business and their website is live is enough for the sales to start pouring in. That couldn’t be further from the truth.
Therefore, deciding what “launch” looks like and means to you and your business and planning how to get the word out is required.
j) Financial Plan
The fashion business is like a black hole. No matter how much you put in, it is never enough. So having financial resources that will last you some time and support the development of your idea into a business and take you beyond launch is a necessity.
Related reading: How to Finance a Fashion Business
The truth is that very few businesses launch and starts making money immediately. So planning how much you will need to sustain you and the business for while until sales start coming through is essential.
k) Business Plan
Though many business people believe that a business plan is no longer crucial to success, the fact remains that there has to be an overall plan as to how the business will look like in not in 5 years, then at least in the 1st year or so.
There are many articles, examples, and templates available online that one can use. Perhaps one of the best reasons for doing this exercise and writing out a plan to cover the initial twelve months of business is that it forces you to think of your idea as a business for the first time as a whole.
Writing out the various sections required in such a plan and setting out the vision for the future is important.
It pulls all your research on paper and out of your head and the process alone often leads you to notice gaps or inconsistencies that you may have not seen earlier.
I would encourage you to do one and if nothing else get some practice doing it.
If you were to look for a partner and wish to raise finances in the future, you would require a business plan to show so might as well get one started as soon as possible.
Also, regardless of the present-day theories of whether business plans really matter or not, the fact remains that nothing good or successful happens if there is no plan.
Plans are living documents that evolve and change, but they create structure and organise our actions and thoughts that ultimately contributes to success in achieving the set goals.
Read part 2 of ‘The Importance of Knowing your Niche in Fashion Business” here.
Any questions? Drop them below.
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