How to Identify Retail Target Market? (8 Simple Tips)

Retail demographic

To build a sound foundation for your business, first, identify your typical customer and tailor your marketing pitch to suit their needs.

It is important for a retailer to identify a specific target market, in this article, we will focus on Target Audience for A Retail Store, and how to find it.

While your products may appeal to a large group of people, marketing to everyone makes no sense.

If you did so, it would be like being blindfolded while playing darts; Not very effective, and a shot in the dark, quite literally.

A target audience is what your retail store needs; the guiding light that tells you who to pursue in the marketing campaigns.

You would be able to attract consumers more efficiently by adding a target audience for a retail store to your plan while recognizing their exact needs and reducing extra costs.

Let’s dig a little deeper into what a target market is and how you can create one that is specific to your retail needs.

What is Target Market for A Retail Store?

Identifying a target market for a retail store helps establish successful marketing communication strategies for your business.

A target market/target audience is a group of people that have common needs or characteristics that your firm aims to represent.

restaurant application sales

These individuals are usually most likely the end-users that buy your product.

For example, you will want to assess the need for your product or service, concentrating on what problem it can solve.

Then refine your target audience by finding those that have already purchased your product or service.

This includes target demographics, type of audience, and any other attributes related to your target audience for a retail store.

If your product or service is brand new, you may want to look at your rivals for more insights.

What market segments are the most common?

Below, you can read about the four most commonly used market segments for retailers:

1. Dividing groups by age, gender, religion, language, employment, ethnicity, and education is all part of demographic segmentation.

2. Geographic segmentation divides the market by location such as town, country, or area. The market can also be divided into metropolitan, suburban, and rural segments. Other segments based on geography include climate and population size.

3. Psychographic segmentation covers preferences, hobbies, habits, beliefs, and attitudes of people. Segmenting by kind of categories of affinity will help you determine which groups are most likely to have an interest in your business.

4. Behavioral Segmentation divides the market by buying behaviours. An example includes online retailers who tailor their website by recommending items based on prior purchases. Behavioral segmentation also provides the sought-after benefit that is the degree of commitment and rate of use. Different messages may match those who are more loyal to your company.

Avoid making assumptions

The toughest part of that process is to avoid making assumptions.

This is vital to your customer targeting quality, because if your assumption is wrong, it is a direct hit on your conversion rates.

For instance, if you want to start a handmade pet biscuit business, you are likely an expert on the many benefits of your products.

pet biscuit franchise

But do not presume that customers know this information about the benefits of your product as well as you do.

They may not even know that such a product even exists.

As tempting as it is to fill in the blanks, you should engage with your potential clients and do as much research as possible to identify your target audience.

As your business expands, the target audience will continue to be measured and kept up-to-date.

Your target audience for a retail store is absolutely dynamic; It is still changing and it takes on new types with the passage of time.

Down the road, for example, you may wish to expand and sell internationally; or you may think you are directly catering to men when you are really selling to wives and girlfriends who are shopping for their loved ones.

Data collection is always necessary.

If you are a new company, you may need assistance from a marketing firm to provide you with research data. Ask friends and colleagues in your network.

If you are an established company you can give your most loyal customers a survey via email to find popular features. All this will help you concentrate your efforts better.

Why is it Important For a Retailer to Identify a Specific Target Market?

If you want to increase conversion, you need to figure out who is exactly your primary target audience, what they want, what is important to them, and what are the sources of friction.

If you say your target audience is “pretty much everybody” or “anyone interested in my services,”  you do not have much of a chance to boost conversions.

Below, you can read more reasons why it is important for a retailer to identify a specific target market.

1. Focused Marketing Efforts

While it may take extra time upfront, determining a target market allows you to focus your marketing efforts as cost-effectively as possible.

Start by describing your product or service clearly, and then identify the person or company who would want to use what you have to give. Understanding customer needs is key.

Using diligent market analysis, like conducting a focus group, reading industry feedback, or doing a business study, you will also discover precisely how you can satisfy customer needs.

focus marketing efforts franchise

2. Focus on Potential

Organizations do not have the time or money to reach everyone with a message about the product.

Identifying a target audience means advertisers may concentrate on those that are most likely to purchase the product.

3. Reaching the Right Audience

Many times the product buyer may not be the same as the end consumer, so you need to tailor the message to the person making the purchases.

Everyone at home, for example, benefits from laundry detergent, but it is most frequently purchased by women who buy groceries for the family.

Soap commercials therefore traditionally target moms who want to have their family in clean clothes.

This technic however is often distorted; Children are the big end-users when it comes to toys, so marketing directly to them could be more effective.

Although the toys are purchased by their parents, children are major influencers of how their parents spend money in this area.

Messages targeted to children will lead them to convince their parents to make transactions on their behalf.

4. Identify an Unnoticed Market

Through the discovery of Unnoticed markets, businesses of any scale may compete effectively.

Instead of trying to attract any consumer who might use your product, concentrating on a marketing strategy to suit a smaller and probably unreached part of the total market, may allow you to carve out a niche for the product.

By focusing resources on a particular customer segment, a small business can better serve a smaller market segment than its larger competitors.

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5. Cost-efficient Strategies

Once you know who the target audience is for a retail store, decision-making about media allocations is much easier.

Instead of buying ad space in any magazine, if your target audience is young people, you can advertise only in those that are popular with that segment.

By using a target market plan, you will save money and earn a better return on investment.

Advertising sales would be more effective as wasted consumers (those that are unlikely to buy the product) are significantly reduced.

How To Identify Target Audience for A Retail Store?

Now that we know why it is important for a retailer to identify a specific target market, we can move on to steps for identifying the target audience for a retail store.

That approach will lead to much higher return rates and requires the introduction of systems rather than relying on indiscriminate marketing.

When you are not sure where to start, the following steps will help you determine your target market.

1. Increase Your Focus

One of the most important efforts you can perform to smartly and effectively market your company is to narrow your focus; in other words, concentrate.

What efforts will you concentrate on?

Here are three tips to help you make a more focused approach for your marketing:

i. Identify What Needs Your Product Satisfies

Who would use your product the most? Consider factors such as age, purchasing power, geographic location, and marital status when you address this question.

If you are a clothing retailer, for example, whether you are offering $15 t-shirts or $500 coats will lead to very different target markets for you.

coat and tshirt franchise

T-shirts can be bought several times a year for a retail price of $15, while a $500 coat may be a one-time purchase.

You now have a better picture of your target audience if you intend to sell $15 t-shirts: millennials who want variety at a lower rate.

ii. Employ a Funnel Approach

To certain CEOs, thinking of the customer selection process as a multiple phase funnel can be beneficial.

For example, gender might be your first bucket. If you have a gender-specific product or service, you will automatically narrow down your market.

The age range may be your second filter. If you make surfboards, selling your product to octogenarians could lead to very limited results.

Your third and final sieve could be income class; the family buying a Kia probably has a different income bracket than the family buying a Lexus.

As you move through these successive filters, you will eventually reach a target audience for a retail store that is more focused.

Such final groups to which you arrive should make it easier to reach the sweet spot which is the intersection between “extremely interested” and “capable of buying.”

iii. Emphasize on Propositions of Primary Value

Who would most probably be interested in the values that your product or service offers?

Suppose you are retailing a baby stroller that is easy to fold into a lightweight, compact shape.

What kinds of parents would enjoy them? Maybe it is the ones who travel and fly regularly.

Whatever your product or service, list the core values provided by your company and draw a line (or lines) to the demographic groups prioritizing those values.

2. Gather Data

Choosing the right markets also means infusing objective data into the conclusions.

The data could come from a variety of sources. Here are some tips to keep in mind as you work to collect data:

i. Gather Data From Surveys To Identify Potential Markets

Metrics are a smart means of recognizing promising population groups.

This could mean conducting surveys through email blasts or newsletters, or you might find it worth contacting a marketing company that can help you gather preliminary data.

target market retail store

Either way, collecting demographic data in your surveys is important. This will help you to associate positive feedback of different demographic groups with your product or service; the same groups that you will later target.

ii. Draw Actively Upon Current Data

If your retail store provides a similar product or service to the ones already on the market, do as much research as possible. What population groups purchase those products?

When is it that they buy them? Which specific products are the most common in the entire lineup?

There is plenty of data you can find online to gather a macro view of the type of customers who are buying products similar to that of yours.

You may also create your own micro-view of different target audience segments. Here is one example of fundamental market research:

Go to your nearest coffee shop and spend half a day. Take careful notes when people place their orders at the counter.

What drink did each person buy? How old is each person, and what are their ethnicity and gender? Is one drink especially popular? What time is the store the busiest?

Once you have compiled your data, you can then apply the findings to the marketing efforts of your own coffee retail store.

market research franchise

iii. Search Your Own Data Network

The next time you are with family or friends, take a look at what they are using.

Will they purchase your own product or service? Asking straightforward questions such as “Would you use this? Do you need a product like this?” Or, “Are you anyone who would need this?” will provide useful data.

You can also draw company partners, funders, and mentors from your network.

Ask them to study your product or service carefully, maybe even to the point of trying it out for a few days or weeks.

You could be surprised by them and be introduced to target audiences you never would have imagined, as well as creative ways to use your products for such groups.

As you build your marketing efforts, wherever possible draw upon diverse perspectives.

Your ultimate goal is to make it easy for your demographic target groups to see linkages between their needs and your product.

Analyzing multiple data streams as well as an ongoing effort to identify your target audience for a retail store can help you achieve that goal and maximize your ROI.

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