Clara's Hardware Store

Start your own business plan »

Retail Hardware Store Business Plan

Market Analysis Summary

In the past ten years, most local hardware stores have closed due to the success of large hardware mega-stores drawing away local customers. The attraction of the larger stores has always been price and and a large inventory. Customers would rather drive 20 minutes and make sure they will find what they want rather than drive five minutes and hope the local store will have it at a low price. Yet these same hardware mega-stores are sterile and not customer-friendly.  Customers can wander the aisles, aimlessly lost, looking for a two dollar item.  And when they do find the right section, they will most likely select the most popular brand no matter how large the selection is. What these store offer in price and selection, they lose in creating a confusing, frustrating maze for their  customers.

Clara believes that a local hardware store can provide a reasonable selection in the most important product areas, be competitive in pricing, and offer the customer a shopping environment that will assure repeat business.

4.1 Market Segmentation

Clara's Hardware will focus on three significant customer groups:

  • Women home owners:  Many women home owners perform their own home repairs and home improvement projects.  Clara knows this first hand since she has helped many of these women in mastering the skills needed to do the work successfully. Clara's Hardware will be uniquely designed to be responsive to the shopping environment that will attract and retain this important customer group.
  • Customers who need assistance in planning a project/repair: This customer group can have the most frustrating experience in the hardware mega-stores. If they can't make the scheduled demos or trainings, they are left to sort thing out with whoever they can flag down in the store help them. Clara's Hardware will be set-up to provide resources and assistance as soon as they walk into the store.
  • Local repair and home improvement professionals: The South Gate area supports a good number of repair and home improvement professionals. Currently, the hardware mega-stores have their business but Clara's Hardware can win a increasing share of this customer group through aggressive marketing.  Time is money and if Clara's Hardware can save them a trip outside the area, they will buy there.
Market Analysis
Year 1 Year 2 Year 3 Year 4 Year 5
Potential Customers Growth CAGR
Women Home Owners 10% 15,000 16,500 18,150 19,965 21,962 10.00%
New Repair/Project Customers 20% 40,000 48,000 57,600 69,120 82,944 20.00%
Repair/Home Improvement Professionals 5% 42 44 46 48 50 4.46%
Total 17.51% 55,042 64,544 75,796 89,133 104,956 17.51%