Nine Lives Outdoor Gear Consignment Shop
Market Analysis Summary
The market for an outdoor clothing and gear consignment shop in Eugene is wide open. Eugene is the perfect community to support Nine Lives as it is a hotbed for outdoor activities. Additionally, there are no other used outdoor clothing and gear stores. By analogy, the used outdoor stores in Bend (half the size of Eugene) and Portland have done very well. For these reasons the market is ripe in Eugene for a store like Nine Lives.
4.1 Market Segmentation
Nine Lives will be focusing on three distinct groups of people that purchase outdoor clothing and gear:
- Outdoor participants with limited financial resources. This group of people has some discretionary income and enjoys spending time participating in outdoor activities. These customers however must maximize their limited money to be able to participate in the wide range of outdoor activities. For them, an outdoor consignment shop is ideal because for the same amount of money it allows them to have more or better equipment than they could get through traditional retail outlets.
- Gearheads. This is a group of people that collects outdoor gear. This is not a “poser” group; they actually use the stuff, they just like to have the right piece of clothing or gear for each individual occasion/ activity. Offering better prices than regular retail outlets allows them to buy more stuff for the same amount of money.
- Bargain hunters. This group will buy things because it is a good deal, not because they really need the item. While some of the used items will appeal to them, the manufacturers’ closeouts and seconds will really excite this group.
|Year 1||Year 2||Year 3||Year 4||Year 5|
|Outdoor participants with limited financial resources||9%||27,014||27,014||29,445||32,095||34,984||6.68%|
4.2 Target Market Segment Strategy
Nine Lives intends to target people that have a need for outdoor clothing and gear but do not have unlimited financial resources. Many or most outdoor enthusiasts do not have unlimited financial resources. This is a somewhat intuitive conclusion, these people value quality of life, and one aspect of this is free time in the outdoors. Spending a decent amount of time in the outdoors precludes being at the office making money concurrently. This is even more consistent with the choice of the market segment groups that live in Eugene. People typically choose to live in Eugene for its quality of life and wonderful outdoor activities, and people are willing to make significantly less (relatively) than in Portland because quality of life is so important.
With a large population of outdoor enthusiasts, particularly those that sacrifice financial gains for quality of life, Nine Lives has a large population base to draw off of. The University of Oregon is located in Eugene and has an active outdoor student body. Additionally, the U of O has a large Outdoor Program which will be a large source of buyers and sellers.
4.3 Industry Analysis
Nine Lives will be procuring the merchandise from a variety of sources:
- Individuals– These people believe that it is preferable to receive something for their goods rather than packing them up to a thrift store. Alternatively, these people might want the newest generation piece of gear or clothing and the way they finance this desire is by selling off their old stuff.
- Manufacturers– Sometimes the manufacturer will want to get rid of some of their inventory, whether because the merchandise is last year’s model or they have an overstock. In any case, they sometimes look to consignment shops to allow them to lower inventory.
- Retail store closeouts– Same rationale as the manufacturers.
- Manufacturer representatives– The representatives often have a large number of samples from many different manufacturers. After they no longer need the samples they will typically get rid of them as there is little purpose in holding onto the samples.
4.3.1 Competition and Buying Patterns
Currently there are no true direct competitors in Eugene. There are two Oregon competitors that have very similar product offerings although one is a consignment shop and the other is a normal retailer. The normal retailer (they buy new and used equipment and sell it to the public) is located in Portland and is doing well, and the similar style consignment shop is located in Bend, another outdoor friendly town, but with a much smaller population base (around 50,000 people instead of Eugene’s 130,000 people) and they are also doing well.
Nine Lives’ competition is present in Eugene in the form of new, retail outdoor stores, such as R.E.I. and McKenzie Outfitters. These retailers have a wider selection of goods, but have normal retail prices and no used merchandise.
Another form of competition is thrift stores that sell used clothing and equipment. The amount of decent used outdoor clothing and equipment floating around thrift stores is pretty small and it is hit and miss. In order to score the deals you have to regularly make the rounds at several thrift stores.
Although some outdoor enthusiasts, like so many other segments of the population, are fashion conscious, meaning the aesthetics of the item is truly important, many, if not a majority of outdoor enthusiasts are more concerned about performance then appearance. This may be explained because when you are in the woods there are not too many people watching you; Also, as long as the stuff holds up to abuse fashion does not really matter. Basically in outdoor clothing and gear, functionality or utility is suddenly more important then fashion. For these reasons people from many different economic levels will purchase used equipment as long as the element of functionality is met.