They say fashions go in a 20-year cycle.
It’s the same way in business – although I’m not exactly sure how long the cycle is.
During this cycle you hear how all the “big guys” are chasing the little guys out of business.
However, the tide does turn and eventually specialty stores pop up and begin to find favor with consumers.
I think we’re seeing this right now and I’d like to give you a few of examples you can probably relate to:
- Toys r Us is going bankrupt while all kinds of local specialty toy shops are doing fine.
- Major chain sporting goods stores are fighting for their lives while the PGA shop is madly popular with buyers.
- Apple Stores are always packed while Radio Shacks are shuttered.
This comes back to a theme I’ve always taught: The riches are in the niches. And, with big chains struggling so badly right now, this concept can be extremely valuable to your future business plans.
We can get into a bit of a chicken-and-egg conversation…
We can get into a bit of a chicken-and-egg conversation here: Do the small, specialized startups pressure the big guys out of business, or do smart entrepreneurs recognize that the big guys are failing to recognize the needs and desires of a specific niche group?
Whatever the cause and effect might be, I think by keeping an eye on struggling large businesses or commercial sectors, it might help you identify the “next big thing.” Find one element of their business that you can pull out and sharpen up to better connect with buyers. And remember, the profit margins are always better in the niche markets.
As a footnote to this, I need to mention that at some point in time, consumers begin to re-appreciate the convenience of having everything under one roof and begin to pressure the small specialty businesses.
The interesting thing to witness over the next decade or so will be the impact of the Internet on this cycle. Will we see the cycle replicated on the web – with Amazon eventually losing some of its favor – or will the cycle be broken?