Target Market Description
More and more people turn to sustainable consumption methods, buying quality goods at low prices and looking for unique items. One in five Americans makes at least one purchase at thrift stores. In general, the American resale industry is estimated at $17.5 billion in annual income and is growing. Income is distributed as follows: clothing and shoes – 49%, electronics – 20%, books – 13%, household goods including furniture – 11%.
From 1997 to 2012, industry revenues doubled, allowing more workers to be hired, and the same pace is expected to be from 2020 to 2025. The growth rate of the resale industry is 24 times faster than the growth rate of clothing sales through retail. Thus, the attractiveness and popularity of the thrift stores industry increase, raising previously undervalued stores type to the same level with retail.
The main market trends of this industry concern the age of the target audience, their expectations concerning the items for sale, and the increasing popularity of online platforms. They are attracting people of different ages; for example, about a quarter of generation X (ages 38-55) are buyers. However, the primary consumers are millennials and generation Z, who draw attention to modern trends of care about ecology and sustainable consumption.
Therefore, consumers demand goods created with all the necessary environmental and ethical standards from the industry. Another trend – is online platforms, which are convenient and popular forms for sales. Their relevance increased, especially during the coronavirus 2020-2021 pandemic.
The discussed trends can be used to develop the business, in particular advertising. The audience’s age will allow the team to choose the best ways to reach it and disseminate information about the shop. Awareness of environmental issues, mainly knowledge that purchases in the thrift store save energy and water, and reduce the carbon footprint, will attract special attention and meet the modern requirements of customers.
Based on trends, one of the critical success factors is communication with the target audience, which will be managed through an online store. Another factor is environmental and ethical actions, which can be achieved by carefully selecting the products for sale and informing customers of the business’s efforts.
Primary Customer Description
Store products may be attractive to customers of different ages, positions, and places of residence, but there is the primary target audience for which the activity should be directed. In particular, the major popularity thrift stores have won among millennials and generation Z. Millennials are aged from 24 to 37, and generation Z is under 24. Thanks to the online sales platform, the store’s activities can be distributed throughout the United States. However, residents of Philadelphia, where a physical store will be opened, are also of particular interest.
Traditionally, the thrift stores have targeted low- and middle-income people. The funds saved on purchases, citizens can spend on rest, family, or make savings for the future. However, according to Gaille, 26% of buyers of luxury goods also buy secondary items.
These figures are higher than those of famous Walmart, Target, and other similar stores. The level of education of the target audience is from medium to high since people with this level are more often interested in environmental friendliness, effective financial management, and the uniqueness of purchases.
Feasibility
As previously noted, the main buyers in the thrift store will be millennials and representatives of generation Z. They are concerned about climate change, which contributes to their moderate consumption skills and makes them pay attention to eco-friendly brands.
Moreover, representatives of these generations strive to manifest their individuality and look for unique things, which reduces the attractiveness of the mass market in their eyes. Millennials and Generation Z appreciate the advantages that online platforms give – speed, convenience, and accessibility. For these reasons, buying in the thrift store, online and in person, is an option that young people prefer to choose.
Social media is a crucial channel for shopping, as these generations rely on personalized offers from stores in advertising. So targeted advertising using attractive images can draw the attention of the potential customers first to the online store and then to a physical one. Millennials and Generation Z, begin to work early and hard to ensure their well-being.
Working enthusiasm allows to earn enough to allocate funds for everyday needs, savings, and spend on themselves quite often, once or twice a month. However, they care more about their future – buying a house or making serious investments. For these reasons, they are looking for quality goods that will serve for a long time. Understanding and using these features will be helpful in business development.
Entry Strategies
The strategy for entering the market will be the direct creation of the entity. However, after analyzing the market, more research and work are required. Firstly, there is a need to plan procurement and sales processes, establish an enterprise policy, and resolve similar organizational issues.
The next step is to evaluate the competitors and determine own competitive advantage for the subsequent development of the advertising company. Finally, the advertising company will attract customers, and further tasks will be to maintain effective work, eliminate possible errors, improve the service and, possibly, expand.
References
Gaille, Brandon. “32 Thrift Store Industry Statistics and Trends.” Small Business and Marketing Advice, 2019. Web.
“2020 Resale Report,” thredUP. 2020. Web.