It’s not popular to say, but sometimes, a business can seem stagnant before it even gets going. Often, this is because the potential business owner is so excited with their concept and idea that they forget the hard technicalities of forecasting success - namely, if there’s even a gap in the market for their business or idea.
It might be that you have a great idea for a salon. But if that idea isn’t so unique, will it really draw attention away from the other three salons and barbers within a quarter-mile radius of your potential letted unit? If the targeted small town already offers four Italian restaurants, do you need to bring another?
That’s not to say you can never implement an idea just because there’s competition nearby, as there always will be. But identifying a gap in the market means understanding how densely packed that market is, where you fit into if, if the market is even ready for a new service, and to what degree you’ll differentiate yourself. That’s a lot of considerations to keep in mind, so in this post we hope to write a relatively long advice column, discussing how you’d even get started with such an approach in the first place.
Without further ado, let’s begin:
Researching A Local Area
It’s a good idea to research a local area, because defining a ‘gap in the market’ will always have a market from and to which you must relate. Without this, you might just find that your assumption that a product or service is unavailable is actually faulty, because in the next town over, it might be that five businesses offer such a consideration.
But moreover, in local areas you can more readily identify the need for a given enterprise. For instance, it might be that a relatively sizeable town doesn’t offer a single record shop selling vinyls and providing live jazz music events. That could be a gap in the market, especially considering how popular both of these have become in recent years, adding to a resurgence of interest across the country. Don’t be afraid to focus at the local level, and use that to give you insight into the broader picture going forward.
Consider What A Potential Audience Wants
Of course, it’s very healthy to consider exactly what your audience may be looking for in the first place. Considering an actual defining point for this in terms of demographics is a good idea. For instance, the clothing that women 40-and-up desire to wear will be different to that women of 18-and-up are looking for.
Depending on the research you do, you may be able to define your store very differently, including its branding, what kind of promotions you put up, and more fundamentally, how you launch into a given area. Think of UK clothing brand Jacamo, a brand that start online in order to fulfill the online fashion shopping needs of plus size men, going up to 5XL in some areas.
When you identify what it is people want, you can identify what it is that they’d be willing to pay for. This can also, conversely, help you decide what may not be the best fit.
For instance, it might be that you’re looking to run a private dining club and golf course in a picturesque location. Perhaps you’d like to place this in a Scottish town. But due to the average salary of such an area, it might be that most of the working and lower-middle-class residents find your idea to be somewhat overbearing and expensive, and wouldn’t feel welcome visiting or paying for the joining fee. Sure, you’ve identified a brilliant service to run that might be replete with all of the mods and cons, but you haven’t identified your market appropriately at that level.
Look Into A Given Market
Rather than simply considering the demographics of a potential market, it’s worth looking into how a market might be operating without you, here and now, in a specific and niche manner.
To use an example, it may be worth thinking of what the students of a given city are looking for in terms of the events they attend. This might define how you spread your marketing, such as giving promotional wristbands to freshers in their accommodation.
If you hope to appeal to the gaming space, look to the kinds of games they’re into at the moment, and the popular options available. For instance, for a time, light-up RGB peripherals were considered the top-drawer consideration for anyone who wanted to have that ‘gaming desktop’ space, but now, as this has run its course and we even have RGB chairs, most of these players just wish for simply designed, robust, and never-too-obnoxious products. This helps you isolate a market that is changing, and willing to open themselves to new considerations. Keeping that in mind can be a great idea.
Consider Established Opportunities
It really does help if most of the heavy lifting has been done for you. With franchising opportunities, you may find that all of the goodwill, the market outreach, the brand familiarity and proven brand appeal, as well as the standards and processes you use to deliver your value have already been researched by top marketing firms and decided on by essential business executives.
In this case, onboarding with franchise development, even in the case of a large business such as running a hotel or resort, becomes so much easier. There’s absolutely no shame (and actually, a thorough amount of wisdom), in aligning yourself with companies like this. This way, you can identify a gap in the market much more easily, because now you know the exact dimensions for how you’re going to fit within it.
Monitor Trends
It’s important to monitor trends to the extent that you can. These shift and change over time, and may develop in ways you didn’t expect. Remember that time before the pandemic where fidget spinners became all the rage? They were sold at every marketplace, in every toy store, and often as accessories at every checkout.
Then, after the trend died down, stocks reduced as sales did. This way, it’s important to understand if a gap in the market might be illusory based on trends that are certain to end. Of course, in some cases, a trend can be leveraged in order to give you a time-honored approach will you can, if your timing and production is right, make all teh difference.
In some instances, trends become permanent fixtures. Think of how normalized online shopping has become in the way of societal lockdowns after Covid-19 was at its peak. Businesses that transitioned to appeal to their customers, even if that meant restaurants now worked through delivery services, managed to claw back some of their revenue as necessary. It’s not easy, but it can work.
Consider Adapting Products & Services
Through most of this article, we’ve discussed how to identify a gap in the market so that when you launch a business, you’ll know where you fit. But it’s important for current businesses to understanding how the market is operating and any new ventures they could take. In some ways, this could mean adapting products and services to fit.
Think of how Apple managed to create the iPod, a means by which to divert into the MP3 media player space, at a time where Zunes, Walkmen and other basic MP3 players were the basic option. Once the iPod came out, not only did they revolutionize the comfort and convenience of using such a device, but also the software infrastructure for placing music upon it.
Adapting products and services can be a worthwhile use of your time within the same token. How might your current offering fit to new norms? Think of how Adobe, a famous creative software company, switched to subscription pricing instead of selling software like Photoshop for thousands of dollars every iteration they made. This reflected the new needs of consumers. It might be that you don’t even need to create something brand new to fit into a gap in the market, rather, adapting your current value to match could make a tremendous difference.
Consider Your Strengths
What are your strengths as a firm, or a professional, that only you can fit? In 2012, Gordon Ramsay constructed the ‘Bad Boys Bakery’ out of HMP Prison Brixton, a means for prisoners serving their time to head to the prison kitchens and cook tarts and other desserts for adjacent coffee shops each week. It’s hard not to see the strength of the idea. Unique branding, social consciousness and sustainability, as well as the chance to allow the consumer to feel as though they were contributing to something productive.
Sure, this is a unique example, but it goes to show that Ramsay identified a strength, a gap in the market, and how those two can catch together like strawberries and cream. Always bring it back to your foundational strengths, because this can guide you when researching the market.
With this advice, we hope you can identify a gap in the market and prosper as a result.
