Sports Clothing Retail Shop Business Plan

Gear Wear has segmented its market into two distinct segments. The first distinguishable segment is hardcore athletes. These are people who live and breathe to push their body harder and harder in aerobic activities. This market segment is present in Ashland, however, they will not be the largest source of revenue as they already have most of the pieces of clothing for their activities as they have been doing it for a long time.

They are more likely to pick up a piece here and there. The second market segment is the newbies, these are people who are relatively new to aerobic activities. While their purchases may not be quite as frequent, their number of potential customers is higher and they will have larger ticket amounts.

Each group will be targeted with a different strategy, recognizing the fact that these groups, although they are participating in the same sports have different demographics. The competitive industry can be broken down into sport specific retailers and all encompassing sports/outdoor retailers.

The sport specific retailers have a lot of clothing, but for only one sport. The all encompassing retailers have a wide selection but not comprehensive selection. Lastly, serving this market should be a steady, profitable endeavor simply because most people that participate in these type of activities tend to for life.

4.1 Market Segmentation

Gear Wear’s market can be broken down into two distinct segments: hardcore athletes and newbies. Each group has distinctive demographics which are detailed below:

Hardcore Athletes

• Typically spend seven – 15 hours per week on their training/activities.
• Regularly participate in two to three different aerobic sport activities.
• 61% have at least an undergraduate degree.
• Have on average at least a $45,000 household income.

Newbies

• Typically spend five – 10 hours a week training.
• Have only recently (within the last few years) began to get serious in aerobic activities.
• 54% have undergraduate schooling or a degree.
• > $47,000 of household income.

4.2 Target Market Segment Strategy

The strategy for segmenting the market is based on the fact that the two different groups have distinct buying patterns. The hardcore athletes have a decent amount of sport specific clothing. When they shop for new stuff it is generally a replacement piece here and there.

They are typically buying the latest and greatest on the market. Although they do not need more products it is this group that most appreciates the subtle improvements that the new products bring. They therefore are likely to buy a piece or two if the product shows improvement in design over what they currently own.

This differs from the newbies who are new to aerobic activities, or at least to the level that they currently participate at. This group is more likely to make less frequent but larger purchases. This group is particularly exciting because it allows Gear Wear to have a significant impact on the outfitting of these people.

4.3 Industry Analysis

Gear Wear participates in the men’s retail clothing industry, specifically in the outdoor aerobic sports clothes niche. The aerobic sports clothing market is a $765 million dollar industry.

Gear Wear is well poised in Ashland, Oregon, a sports minded town. Athletes can participate in any number of activities, all within a 20 minute drive from Ashland. Additionally, people can participate in both fall and winter (snow) activities at the same time.

Products in this industry are purchased either through a local retailer or mail order. At the local retail outlet, there are either sport specific stores or larger general retailers that carry a wide assortment of different sports/human powered activities.

Products are also purchased via mail order companies. Within the mail order arena, there are also retailers that offer sport specific clothing as well as mail order retailers that sell a wide assortment of sports.

4.3.1 Competition and Buying Patterns

Gear Wear faces competition from several sources:

• Run Pro: A running-only store that stocks a decent variety of running-specific clothing.
• Two Wheel Drive: A bicycle shop that has the best selection of cycling-specific clothing.
• Assorted ski retailers: There are two ski retailers that sell a variety of clothing, primarily outerwear and base layers that could be used for cross country skiing.
• R.E.I.: A Seattle-based retailer and mail order company with many regional/local stores that sells a wide variety of different men’s and women’s clothing. While the variety is great in terms of sports, there are not a lot of choices within sport specific clothing.
• Performance Bike Shop: A mail order, cycling-specific retailer of clothing, bicycles, equipment, components, and accessories. Their selection is great, however, it is cycling specific and being mail order, you cannot try on the products.
• California Running: The leading running-specific mail order house. The pluses and minuses are similar to Performance Bike Shop.

The buying patterns for the hardcore athletes are that they typically will go to a sport specific store (or mail order) to make a purchase. This is because they use the clothing so much and appreciate the technical aspects of the products that they notice the subtleties between the different products and appreciate the wider selection.

The newbies are more likely to make their purchases from a general retailer because of the wide range of products that they offer.