Retail businesses have been a pillar of the country’s economy, and apparel retail is a major one of them.
Prominent apparel brands like Zara, H&M, Levi’s, and FabIndia have established strong footholds in the market by catering to diverse customer needs.
If you’re exploring the potential of the apparel retail industry or seeking to understand its core aspects, this is your comprehensive guide to understand what is apparel retail and how you can start an apparel retail store successfully in this crowded market.
What is an Apparel Retail Store?
An apparel retail store specializes in selling clothing, footwear, and other related accessories.
These apparel retail stores offer a range of products designed for every occasion – casual wear, formal attire, and seasonal collections.
Apparel stores can vary in size and format, from small boutiques to large chain stores, each catering to the preferences and needs of their target audience.
The store layouts are designed to encourage easy browsing, with displays often organized by categories such as gender, age group, or occasion.
Depending on the brand and location of the store, apparel stores might focus on specific demographics, including men, women, and children, or niche markets like plus-size clothing or eco-friendly fashion.
Apparel vs. Fashion: Understanding the Difference
While the terms “apparel” and “fashion” are often used interchangeably, they cater to different customer needs and represent distinct market segments in the clothing industry.
Here’s how the two categories have their differences:
Apparel retail store focuses on clothing that is practical, affordable, and functional for everyday wear.
Let’s take Zudio for example. Zudio is known for offering trendy yet budget-friendly clothing, Zudio provides affordable apparel options that cater to a wide audience for daily use.
Zudio’s success lies in its emphasis on accessibility through location, price, and fashion and its ability to strike a balance between trendy fashion and practical apparel.
Fashion, on the other hand, emphasizes trends, styles, and sometimes luxury, and exclusivity.
Gucci is a prime example of a fashion brand that creates clothing meant to make a statement. With its focus on designer pieces, and exclusive designs, Gucci caters to a niche, fashion-savvy audience willing to pay a premium for luxury and unique styles.
However, fashion doesn’t always have to be synonymous with luxury. Brands like Zara and H&M also fall under the fashion category, offering trendy and stylish clothing at more accessible price points.
5 Benefits of Opening an Apparel Retail Store
Below are the 5 major benefits of opening an apparel store:
1. Evergreen Demand
Clothing is a basic human necessity, and therefore apparel retail remains one of the most stable sectors in the retail market. People need new clothing regularly for various occasions, for work, casual wear, or even affordable t-shirts to use as gym wear as people are becoming more aware of fitness.
2. Wide Customer Base
Unlike typical fashion stores that target a specific audience, apparel retail stores cater to a broad range of customers. From children to adults, people from all walks of life who need affordable yet quality clothing.
3. Multiple Revenue Streams
In addition to selling clothing, apparel stores can diversify their revenue streams by offering complementary products like accessories, footwear, and even services such as tailoring or personal shopping.
4. Flexible Business Models
Apparel retail stores can operate through different models. Some may focus on brick-and-mortar outlets, while others might adopt online or omnichannel strategies that combine physical stores with e-commerce platforms.
5. Potential for Brand Growth
The apparel retail industry offers considerable opportunities for brand expansion. Once a business gains traction, it can scale by opening new locations, introducing private-label lines, or expanding through franchises.
But before expansion, location choices should be made based on various location data such as foot traffic, customer demographics, competing and complementary brands, etc.
We’ll discuss how you can open your first store and scale your business successfully by strategic location selection in a bit.
Who Are the Ideal Customers for Apparel Retail?
We can understand what apparel retail stores are better by understanding their ideal customer profiles.
Though it varies drastically from one location to another, business size, etc, in general, below are the potential ICP of a typical apparel retail store:
- Everyday Shoppers: People seeking comfortable, affordable clothing for daily wear.
- Fashion Enthusiasts: Trend-driven individuals who prioritize style and aesthetics at affordable prices.
- Professionals: Office-goers and individuals needing formal or business attire.
Understanding these nuances, especially with location data can help you determine the ideal product mix to curate for a specific location.
| GeoIQ helped a major eyewear brand identify the best product mix at different stores using location data!
The Impact of Location on Apparel Retail Success
Whether you’re looking to start your first apparel retail store or looking to scale it, location plays a major factor in driving your business to success.
Here are three major factors you should analyze before choosing a location:
1. Foot Traffic and Target Group Density
High-traffic locations such as shopping malls, busy street corners, or commercial districts naturally bring in more potential customers.
One thing to remember is that these high-traffic locations should not be saturated and should also have sufficient ideal customer density for businesses to capture a decent market share.
Based on your apparel retail store and its target audience, you should assess whether the location you are targeting has a high density of your ideal customer group to ensure profitability.
GeoIQ brings foot traffic, customer density, affluence level, and other important location data variables to find profitable locations for apparel retail stores.
2. Rental Costs and ROI
The commercial rent for locations on high streets or in any prime location will usually be on the higher side. Operational costs like rent directly affect your profitability.
To make sure you break even faster in a location you should assess the target location’s rental costs and pick a location that aligns with your budget and target audience.
Our location intelligence platform lets you know the rental cost you will be dealing with to ensure your ROI stays intact.
To go one step further, GeoIQ helps you predict your next store’s revenue based on location data with 95%+ accuracy!
3. Proximity to Competing and Complementary Brands
Opening your apparel retail store next to competitors can bring in more traffic if the customer density is highly concentrated in the location. This is part of the reason why many competitors open their stores next to each other.
At the same time, a location with complimentary brands can ensure the presence of the ideal target group in the vicinity and boost sales. Complementary brands attract a similar target audience, creating a synergy that benefits all businesses in the area.
These are just a few of the factors that influence a store’s location amongst many. Picking a location after a thorough location analysis can help make a well-informed decision before opening a store.
Conclusion
Opening an apparel retail store offers numerous benefits, including steady demand, a wide customer base, and multiple revenue streams.
However, the success of such a venture depends on understanding the target market, offering the right product mix, and, perhaps most importantly, selecting the ideal location.
By using location intelligence and carefully considering these factors, you can position your apparel retail business for long-term success.
