“What is your market?” Do you know the answer to this? If not, does it matter?
If you have been working creatively and so far have been receiving commissions and referrals, you probably haven’t needed to think about ‘what next?’ and promoting yourself out to new clients in the market. Or maybe you are just starting out and not sure where to start selling. Well, what comes next is market research…
This doesn’t sound terribly exciting, maybe doesn’t sound like it is relevant to you, and possibly is conjuring memories of dodging clipboard wielding researchers in the street. But I believe market research is vital to helping you grow your sales, and your business. And it is easier to do than you might think (with no clipboards).
Essentially, a market is where you sell your product or service. Your market might be based on the product, so fashion, ceramics, childrenswear, jewellery, millinery etc, or service – photographer, jewellery resetting, interior design or architecture. It might also be based on geography, so, locally in your own neighbourhood, your city or region. This might be online. Or this might be overseas, either if you have been successful e.g. in the UK and are planning to expand, or if you have had some sales from e.g. Japan and China and think there could more sales from these areas.
Your market might also be a specific market level or area. By this I mean luxury, mass market or bespoke commissions. Perhaps you have worked in the mass market and have been retailing to small pieces to high street chains, but now feel you want to produce a more upscale range for independent boutiques. Or perhaps you want to move into the ethical design or crafts market with sustainable and eco products or services.
And your market could also be trade. You might be selling your products via retail to the end customer – the actual customer who will be using it – or you might be selling your product to interior designers who work with clients, for example. Maybe jewellery setting services to jewellers, or embroidery services to fashion designers or crafts people.
Once you know what your market is – and you may have more than one, which is fine – then you already have a head start on how to grow sales by understanding:
- the type of stockist or clients or end customers that you can work with
- trends and opportunities for growth that you can capitalise on
- the aspects that are in decline and best avoided
- the new challenges that are arising and affecting the market
- the type of successful businesses that are working – and competing with you – in this market
- what it is that your clients, stockists, or customers want and how much they will pay for this
But why does all this matter to you? You have a product or service that either has been selling well enough, or is surely going to sell well enough, if not brilliantly! Isn’t it easier, quicker and a better use of time to just start trying to sell where you can rather than undertake any market research?
I think jumping in and trying to sell anywhere to get your business off the ground (or keep it afloat) makes sense and may bring you in short-term sales, which is important. But in the longer-term i.e. the following weeks, months or years since your recent sale, having more of a strategy and a focussed means of selling your product or service will be more time efficient and more lucrative. And hopefully will also give you the much needed sense of knowing where your business is going!
If you are just starting out, and you have samples or prototypes, or just single pieces of your product so far, then you would need to do initial market research. If you have already been selling and are expanding into a new market, such as one of those discussed above, you would undertake something more substantial, as there is a greater financial risk to it. In both cases, you need to do this in stages.
This will involve accessing the internet or library with notepad or iPad. Plus, if you are exploring your geographic market quite literally on foot, take a camera and a map so you can see how the shopping areas are laid out.
First, set some time aside for this and schedule it – think about whether you will visit a library, or you might want to try the internet first. But give yourself a goal of a couple of hours or one afternoon a week for a few weeks to work through this. Put it in the diary; this is also your work too, not just making or designing!
Then identify your market – look at the list above, which of these applies to you? There may be more than one.
Visit a business library – in London there are City Business Library, the British Library’s Business and Intellectual Property Centre, and Westminster Reference Library to name a few. All of these places will have librarians who will be happy to get you started and show you (either ad-hoc or if you make an appointment) their resources, databases, periodicals and reports relevant to what you are trying to find out, and they cater for small businesses – for free! Other cities will also have a good business section in their libraries. Often, once you have visited a library, they can set you up as a member so you can then explore their resources online from home.
Then read reports on industries, trends and market growth – these reports include Mintel (Market Intelligence), Keynote, Datamonitor and Verdict. And also Cobra (Complete Business Reference Advisor), and EBSCO business resources to help small businesses. At the British Library Business and Intellectual Property Centre, there are industry specific information guides such as fashion, or jewellery etc. In these reports, look at data for sales, turnover, numbers of companies, and indicators of growth and decline etc.
Now analyse what you have read and noted down – what are the trends and growth areas? How is the market structured and divided up into smaller markets? What areas or sectors have declining sales? Who are the main players and market leaders? How saturated is this market? – e.g. mass market womenswear will be more saturated with lots of similar brands than luxury accessories? What looks stable to you? What looks like a new and emerging area that you could capitalise on?
Consider the impact on your current product or service offer. It’s not a nice thought, but are the sales of similar offers in decline or heavily saturated with competitors? If so, how can you modify or innovate in what you are doing (or where you are selling it) to take less risk here? Or maybe the data shows that no-one else is doing something similar to you? That could highlight an opportunity, but also an indicator that there is no demand for it…
So now you have the data, it is time to visit the market yourself – if you can afford it. Are you selling handmade accessories to your local neighbourhood? Head out with your camera and photograph what you see by way of other stores, craft fairs, boutiques and department stores. If you are a small scale jeweller or designer, head round the museum shops and jewellery districts, plus the boutiques and departments stores (but don’t take photos inside!!!).
Are you expanding overseas – e.g. Paris or Shanghai? Take a budget trip to familiarise yourself with the districts, the stores, how the department stores are laid out inside, what looks busy, what is near underground and bus stops and other main attractions. This way you get an idea of what the location is like, where you want to be in that location, what else is selling, what types of other stores or brands are there already – who looks busy and who doesn’t?
Or are you moving into online sales? Are you setting up your own website and promoting it on your own social media platforms, or are you going to sell through a host platform e.g. Notonthehighstreet.com, Etsy.com, Asosmarketplace.com, or Culturelabel.com etc. Browse all the similar host platforms, then within each platform look at all the individual brands similar to your business. Monitor them and see who is selling best where. Keep an ear out (and eye) for feedback on other businesses’ (negative) experiences with such host platforms.
So, what your time spent on this research will have shown you is:
- what the trends and opportunities to capitalise on in your market are
- what is selling well and are growth areas = potentially more sales and profit
- what is in decline, or will be more challenging and risky financially
- who the main stockists or competitors are
- how the market is structured – lots of large chain retailers and only a few boutiques, or mainly online sales
- how saturated by similar offers the market is – the more saturated, the harder for you to gain a foothold
- geographically, where you want to be in this market – the wrong end of the right street can be just as unfortunate as the wrong end of town; you want to be where the customers are
- again, geographically – locally or overseas – this shows you a little more about customers’ buying habits and what exactly is selling well
For your business now, this will give you more direction and focus. It will help lessen you wasting your time (and money) trying to sell in the wrong place, or trying to sell the wrong offer in the right place. Ultimately, this will help you begin to capitalise on opportunities to make more sales. Which is what everyone wants…
Good luck with it!
If you have any questions after reading this, then feel free to email me on firstname.lastname@example.org, or drop a comment on the blog.
Next Creative Planning Basics post: Customer research – who are they and what do they want? And is your dream customer your actual customer – if not, does this matter? Hint: yes, it does…