Retailers' use of niche marketing in product development

Abstract

PurposeThe purpose of this research is to investigate the growing trend of the use of private labeling as a competitive strategy among fashion retailers. Specifically, how retailers differentiate and create niche markets within their own private label merchandise is examined. The study focuses on how retailers develop and expand their private label portfolios, while minimizing the risk of cannibalization.Design/methodology/approachThe research methodology is an in‐depth case study design that is used to gather information from a selected sample of those retailers that participate in apparel private label product development.FindingsResults indicate a strong use of a niche marketing strategy by retailers in the development and implementation phase of private labels. The strategy resulted in increased profits and market share.Practical implicationsThe study is significant because it provides a framework for a globally competitive strategy that retailers can utilize in order to develop specialized, niche markets within their private label merchandise, while minimizing the risk of cannibalization.Originality/valueThere is a void in the current research literature relative to the use of a niche market strategy as a competitive strategy by the fashion retail industry, particularly when related to the development and marketing of private label merchandise.