“Specialty Retail” is a confusing term that encompasses a lot of different types of retail. Market research firms, specifically Ibis World, break the term down into market segments that include food and beverage, tobacco products, and home goods, just to name a few. So how is specialty retail defined?
Specialty retail is basically any type of retail establishment that tends to focus on specific categories of a product.
The specialty retailers include stores that focus on catering to one specific retail market or one line of goods or merchandise. This includes:
When you think of specialty retail, think of a specialized yoga-wear store like Lululemon rather than the big-box retailer such as Walmart. Another example are stores which specialize in bodybuilding or sports equipment. These stores will have different kinds of fitness equipment. More importantly, you can find a larger selection of goods, especially highly specialized equipment which you won’t find in the larger department stores.
In this modern era, almost every type of product is available and can be easily bought on the internet. The buying and selling of goods over the internet is known as E-commerce. With COVID-19, moreover, e-commerce has boomed with more people buying online as a substitute to visiting brick and mortar stores. E-commerce operates over the following devices:
The exchange of data or financial information is what differentiates an E-commerce platform from a regular website.
The processing of a transaction where more than one party is involved is what makes an E-commerce application ideal for a specialty retailer. E-commerce platforms provide specialty retailers access to a wider market. When it comes to the major marketing and sales models, E-commerce provides the following advantages:
eMarketer conducted a Global Ecommerce Forecast 2022 that provides a glimpse of the retail ecommerce sales between 2020 and 2025. As illustrated below, E-commerce sales have grown steadily over the past two years. It’s predicted that the positive trend will continue into 2025.
With digital transformation, the meaning of “retail” has drastically changed. Digitization has increased the ability of all retailers to grow their sales. The management of inventories, accounts, sales and marketing and human resources can be applied via various SAAS products. This allows operations of your online store and physical store run smoothly. Hence when integration between online and brick and mortar is done correctly, it is inevitable that it will trigger a real and virtuous circle.
According to eMarketer, China will have the highest retail e-commerce transactions globally. It is projected China will have over $2784.74 billion in 2022. The second highest e-commerce transactions in the U.S. will occur where it is projected that $ 1065.19 billion worth of commerce will take place in 2022. The third largest economy for e-commerce will be in the U.K with a projected value of $245.83 worth of e-commerce sales happening within its borders.
What's more interesting is the fact that the U.S. has a higher percentage change, indicating that the growth of sales is higher in the U.S. as compared to China.
According to ecommerceDB, the biggest player in the U.S. e-commerce market is Amazon. The company grossed $140 billion in 2021. Amazon is followed by Walmart which generated $53.2 billion revenue during the same year. The third largest online retailer, Best Buy, earned $22.4 billion. Together, the top three e-commerce players account for 35% of online revenue in the United States.
These rankings are based on the sales each retailer generates e in the United States.
One of the fastest-growing stores in the U.S. market is Emma Sleep. The retailer achieved sales of about $5.8 million in 2021. Its revenue grew by 294% in relation to the previous year.
Diving further into details, here is the eMarketer report on the sales growth by category. The table presents the percentage change in the sales by category and validates the fact that the boom of e-commerce will level off by 2026.
So if you fall in any of the below categories, now if the best time to ride the e commerce wave and get an online store for your retail business
The move towards e-commerce is nothing new. Consumer behavior has been shifting online for many years, and retailers have been responding by increasingly embracing digital channels and touchpoints.
This trend was certainly accelerated by COVID-19. As we emerge from pandemic restrictions, there's no doubt that digital will continue to play a vital role in retailers’ marketing and sale strategies. Those businesses who can grasp the opportunities on offer have the chance to deliver great value, while those that adopt a ‘wait and see’ attitude are likely to struggle.
Helps businesses go global:
If you are running a physical store, you are limited by the geography. Your merchandise is only available to those willing to come to your physical location. Offering the e-commerce option to your prospects will give you the opportunity to increase your market. It’ll offer your products and services to a new set of prospects beyond your geography, regardless of the distance and time zone.
An e-commerce platform can be created with less overhead and fewer risks:
Starting an online store can mean significantly lower start-up costs compared to a brick-and-mortar retail store. The retailer or the online business owner doesn’t have to take into consideration the additional expenses of shop rental, hiring a salesperson to woo customers, utility bills, security measures, and other associated costs.
It can broaden your brand and can expand your business:
Having an e-commerce store can be used to broaden your range of products/services for sale, expand your business, bring you more customers, and diversify your sales. It’s the ideal way to take your brand from a traditional brick and mortar store to an innovative, well-loved one.
Perhaps the most obvious benefit is that it allows businesses to sell products and services to customers all over the world. Additionally, ecommerce makes it easy for customers to find what they’re looking for, providing a user-friendly shopping experience that encourages
Offers better marketing opportunities:
Your e-commerce site is the best marketing tool that you will ever have. Thanks to the internet, now anyone can market through online tools like social media marketing, email marketing, search engine marketing (SEM), pay-per-click ads, and search engine optimization (SEO). These tools can help you build very useful links and contacts.
Additionally, e-commerce offers businesses a vast array of marketing opportunities that are not available through other mediums. Businesses can use social media platforms to advertise their products, reach out to new customers, and build relationships with existing customers. Businesses can also use email marketing to promote special offers, new products, or upcoming sales.
Your online store will stay open 24*7/365:
Also, one of the great importance of e-commerce that retailers can enjoy is that the operational hours of the store are now 24*7/365 compared to the brick and mortar shops. In this way, retailers can increase their sales by boosting their number of orders.
E-commerce stores are never closed, which is a huge advantage over traditional brick-and-mortar stores. This allows businesses to sell products and services to customers all over the world at any time of the day or night.
E-commerce is easier and more convenient:
People’s lives are hectic; getting to a physical store takes a lot of time and effort. So, by starting an e-commerce store means that you can fit into your customer’s busy lives, making the products they want accessible when they want them.
Helps to improve the image of your business:
Offering a good online sales platform to users will give your company a great brand appearance. E-commerce can improve your brand image in many ways. For example, it can make your brand more visible to customers. By having a strong online presence, you can reach out to more potential customers and increase your brand awareness. Additionally, by providing a positive shopping experience for your customers you create a more positive image for your brand.
Personalizes the shopping experience for your customers:
If there is one of the clear advantages of having an e-commerce store, that is to be able to know what your consumer does. More importantly, most e-commerce platforms offer metrics that help store owners improve a customer’s experience.
With email marketing, businesses can promote special offers, new products, or upcoming sales to their customers. Additionally, businesses can use email marketing to build relationships with their customers and keep them updated on the latest news and events.
Enable the increase in sales:
All the information laid out in this post boils down to one point –– being able to increase your sales. At the end of the day, your business is based on being able to sell more, and therefore it is what it is aimed at.
Here are a few different way that you can promote your retail business online:
Media relations is getting articles about you and your business in publications and their online websites.
t's the primary marketing platforms for most of businesses since over 70 percent of the U.S. population has a social media account,
With high level targeting and delivering measurable results, digital advertising provides you faster results for your business
Advertising in industry specific magazines and print media allows you to get your products to influencers and enthusiasts
Search engine optimization (SEO):
SEO allows you to get a huge amount of traffic by producing the content that your target audience is interested in.
Your email list is an asset to your business. You can make hundreds of dollars in sales by simply sending a promotional email to your list.
In conclusion, specialty retail is a category of retail with a bright future. It is a category of retail that has helped revive disinvested downtowns. It’s also a category of retail that is local. What tips or trends are you seeing happening in specialty retail that the macroeconomic picture we have painted in this blog article is not capturing? Share your thoughts and comments below.
Starting you specialty retail business? Checkout our blog on Retail Business Plan.