There is a small town (that shall remain nameless) that is near where I grew up. It's small, but it has a school system, and plenty of residential areas. In other words, there are enough people there to suggest the need for a grocery store. Yet that is exactly what is lacking from the town.
Interestingly enough, there was a grocery store there for years, but it closed down (for reasons unknown to me) a couple years ago. Now if people want to go on a big grocery-shopping trip, they have to go to the next town over to the North or the South. This could be quite inconvenient, especially in the winter where this area often gets heavy snowfall.
It's not that the next town in either direction is incredibly far away. You're looking at about 20-30 minutes, but out of all the things not to have in your town, you wouldn't think a grocery store would be one that is absent. The local video store is still there though, and that is what brings me to the point of this article.
The local video store saw the need for groceries in this town and began to offer some. Now, they do not have anywhere close to the amount of groceries that a normal grocery store would have, but they keep what stock they have room for when it comes to the bare essentials. Toilet paper, canned goods, bread, milk, eggs, and some other items that wouldn’t necessarily be found at the gas station.
This is a brilliant move on the part of this video store, and I will be interested to see if that store grows into more of a grocery store itself, because I'm quite sure they are making a good amount of extra money by offering the products that aren't available in town like they should be.
The people who operate this store no doubt see an opportunity to cash in on a niche that has virtually no competition in that town, and a niche that pretty much everybody is a potential customer for no less. It is still hard for me to believe that a full-fledged grocery store has not opened up there yet, but as long as the video store has the market cornered, I don't think they have to worry about going out of business themselves. Especially while their original niche (videos) continues to drive customers in.
Although, that very niche faces stiff competition from online video and mail-in services like Netflix, the grocery angle could almost be viewed as one to fall back on. From my understanding, the video department is still doing quite well though.
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A friend of mine owned a gas
A friend of mine owned a gas station and he had to check his competitors price for several miles around every day because the general public will drive several miles to save one tenth of a cent on fuel. Can you imagine how far these consumers will travel for a 10 cent saving on groceries with no margin for the retailers on. These Groceries in the video shop are called lost leaders which get you into the habit of going into the shop and give the shop the oppurtunity to sell you something they will actually make a profit on like videos. Groceries have to have huge volume to have profit after handling.
Excellent Point About Meeting Needs
Excellent point and a perfect example of the fact that businesses exist to meet consumer needs, whatever those needs may be. We as business owners sometimes get too narrowly focused on what we want to offer and miss out on what people really want.
Even if we don't expand into areas that far outside our niche, there are always products and services we can add to our existing offerings to complement them and meet other consumer needs.
This is an excellent reminder to look at your target market and see what they are missing and what needs they have. Then, take a look at what you are offering and see if it is a good match for those needs. If not, you may consider adding to or even replacing your current offerings to better match those needs.
Seven Levels Down to Niche
When I started my corporation, I was trying to find a niche that no one served. That was very difficult. I had to niche seven levels down a decision tree to find a niche. As we were a small company a few years ago, we could adjust to what the market says it wants from our list of services.
Our original business plan has been changed more times than I can count. However, we kept our mission and vision in place. We never varied from our vision. I felt if we gave up our core values, we would not be the same company.
As so many people are starting their own companies due to the current corporate downsizing, nicheing will be even more important. As an old college professor of mine said many years back, "Look at the numbers, stupid. There is absolute truth in the data."
James J Moore CutCompCosts.com
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