In our 2002 article Not All Populations are Created Equal: Understanding the Differences to Maximize Success, we discussed how right down the street from our office in the Westport district of Kansas City, Missouri, Starbucks opened six years ago immediately next to the then ten-year old, independently owned Westport Café coffeehouse, and how both have prospered since each targets a completely different socio-economic/lifestyle (SEL) group, each with their unique lifestyles and tastes. We used this to illustrate the concept of focused assortment, the marketing concept of targeting a niche SEL group with an assortment of goods and products in a specific category. In the case of the two coffeehouses, the category was coffee drinks and the two groups were bohemian urban dwellers (Westport Café) and mostly white-collar professionals (Starbucks).
The Broadway Café and Starbucks are immediately next door to each other, yet they have both prospered.
As a follow-up to that story, we are pleased to report that not only has the Westport Café continued to prosper, but business has grown so much they opened a branch store named Broadway Roasting Company, just one block away from themselves and Starbucks, to handle their growing business. Westport Café moved their coffee roaster to the new location to make more seating room available in the original location. When we moved our offices last Fall (click to learn more), we started buying our morning coffee at the new location. Since then, we have observed that the Broadway Roasting Company's business has grown steadily to the point where you often have to wait in line to place your order.
The new Broadway Roasting Company branch of the Westport Café.
So there you have it, a true-to-life story of a giant corporate chain (Starbucks) that doesn't conquer the small independent (Broadway Café). In fact, just the opposite happened. The independent's business grew.
What this goes to show is how important it is to target a business to a specific SEL niche. Being a generalist never works. If the Westport Café hadn't kept their unique bohemian character when Starbucks arrived, but had instead remodeled to imitate Starbucks, we're sure they would not be around today. Instead, the Westport Café understood that they were serving a market niche completely different than Starbucks and stuck to satisfying that niche market rather than chasing Starbucks' market or trying to appeal to everyone. Westport Café won, Starbucks won, and the urban diversity of the Westport area won with the choice of two (plus a branch) completely different facilities where one can purchase and slurp one's coffee.
Our company understands how critical SEL targeting is to most businesses, including location-based entertainment. If you try to be something for everyone, you only end up not being special to anyone. That is why, in our market feasibility studies, we examine the market area's social economic/lifestyle groups and make specific recommendations on which to target and how. This is unlike most feasibility firms, who look only at demographics and treat the entire population as one homogenous group. Targeting a population as if it is homogenous doesn't work in real life, whether you are a coffee house, restaurant, hotel or an LBE. Success is an understanding which SELs are out there and deciding which one you will target and serve.