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You have your niche in the marketplace, but you decide that you want to head a different direction in order to capture a different part of the market. However, if a major corporation such as Wal-Mart and Nordstrom’s failed at changing their niche, is it possible for the small business owner to change their niche? Yes, it is possible but you have to do it very carefully.
First of all let’s take a look at what happened to Wal-Mart and Nordstrom’s.
As anyone who has been alive for the last 20 years knows, Wal-Mart’s niche has been the lowest common denominator, the lowest price shopper. Not the smartest shopper who wants value for the dollar but the customer who only looks at the price and not what is in the package.
The problem with having this niche is that there is not a lot of margin in this market. Realizing that they are quickly hitting market saturation in the United States, they knew that they would have to make more money off of their products in order to continue improving income.
Seeing the success that Target was having, they decided to move that direction. However, in the stores that they tried to upscale, they lost their core market and sales begin to flounder and the experiment was stopped. Wal-Mart is now moving more upscale but doing it much more slowly and not trying to alienate its existing market.
Nordstrom’s has always been known as the customer service retailer. You did not go into Nordstrom’s for low prices or the hippest fashions; you went in there if you wanted good service. Seeing that their core market was aging that they were not brining the younger market Nordstrom’s decided to change their focus by bring in the hip and trendy. Once again it failed as Nordstrom’s core market was alienated and sales went down not up.
The lesson to be learned is that you can change your niche but you cannot alienate your existing market. You can slowly bring in or start building new items, but you also want to keep your existing customers happy with the products they have been buying all along.
Take time if you want to move your niche and don’t alienate the people who have kept you in business.