July 22, 2024

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A Retail Clothing Store Business Plan – Customer Analysis

A Retail Clothing Store Business Plan – Customer Analysis

Your retail clothing store’s business plan requires a well-thought out customer analysis which describes what type of customers will make your store succeed.

Not Too Broad, Not Too Narrow

When choosing your customer target markets, make sure that they are neither too broad nor too narrow. The broader a target market, the more expensive and difficult to reach it and sell to it. For example, if the target market is simply “Residents of the Tri-state Area” this will tell you and readers little about the most effective means of reaching them.

Think further about who the most profitable customers within these broader markets will be and whether there are distinct groups of profitable customers worth mentioning. Profitable here refers to the total revenue that a certain customer will bring in through clothing purchases over a certain period, the customer’s likelihood to remain loyal and keep purchasing after that period, and the cost of achieving that customer through marketing and sales work.

If customer groups are too small, readers will be concerned that there isn’t enough potential revenue from the target markets for the store to show a profit. Remember that readers will not believe that you can ever achieve 100% of a market. You have to show that you will be able to break even with much smaller market shares, especially in the early days of your store.

Three or Four Segments Is Good Enough

To prove the excellence of your store’s potential, you may be tempted to write a list of target markets segments that you can target. Resist this temptation, and clearly show your focus on three or four segments at most for the short-term. If the amount of revenues that you can achieve from these groups seems limited over time, then you can go on to describe some future target markets, labeled as such, to detail the next steps the company can take when the original targets are tapped out.

Customer Values

For customers in each segment you describe, write about their specific reasons to buy from your store based on their values. Show the difference between each segment, because if two segments have the same values and needs, they could probably be lumped together as one. Don’t detail your promotion methods and product line again here as a way of explanation – those are covered elsewhere in your plan. Do be clear as to why each group listed is a good target for your clothing store.

For more help tailoring your products and services to best fit the needs of your target audience, please see the information below.

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Infographic provided by Riveron – accounting advisory professionals