The world’s largest retailer did it, and so can you. What is the secret to Amazon’s success? Successful businesses have been a long time coming for the company. Its first two decades saw many failures before finally figuring out how to meet its customers’ demands in 1998 with online shopping transactions that were more efficient than what competitors had offered up until then.,
Underserved markets are markets that have been overlooked by traditional marketers. They can be difficult to reach, but they can also offer huge opportunities for growth. In this article, we’ll look at how Amazon has tapped into underserved markets and is reaping the rewards. Read more in detail here: underserved markets examples.
A significant number of retail businesses are shutting their doors. Despite the fact that at least one research claims that Gen Z prefers to buy at shops on occasion, at least 22 companies are shutting sites in 2017. Dollar shops, on the other hand, are on the increase. What do you make of this?
To begin with, it demonstrates that customers’ shopping habits have profoundly altered. They’ve become more discriminating and have more options. As we’ve seen with Tesla, Peloton, and Whole Foods, high-end customers are prepared to pay a premium for luxury goods and services. Consumers in the mainstream demand variety, convenience, and competitive price, and they have a plethora of new choices.
However, there is still potential for creativity in at least one segment: companies that cater to lower-income customers may be a bright spot in an otherwise bleak picture.
Large corporations have undoubtedly received the message. Amazon, for example, may be more well-known among millennials for its one-click ease. However, they’ve just started giving EBT cardholders a $5.99/month Amazon Prime membership. Compared to their normal price of $100 per year or $10.99 per month, this is a significant savings, plus the two-day delivery means fewer visits to the petrol station or lengthy bus rides.
LendUp, a new entry in the financial services industry, has secured $200 million to fund their efforts providing loans to underbanked individuals. They frame their service in opposition to payday loans, which, despite their high costs, have become an unwelcome need for many underbanked families.
What strategies can small company entrepreneurs use to tap into underserved markets?
Small company entrepreneurs have opportunities as well. Entrepreneurs that can target this neglected and distinctive demographic have a chance to gain a devoted and possibly lucrative customer base.
Let’s look at the facts: Around 15% of customers in the United States are poor. According to the most recent statistics published by the United States Department of Agriculture on July 7, 2017, there are 41.6 million individuals on food stamps. Companies, on the other hand, have traditionally disregarded this demographic.
Stores are often located far from low-income areas, necessitating costly petrol or, worse, carrying groceries home on public transportation. Many companies refuse to accept Electronic Benefit Transfer (EBT) cards, making it difficult for individuals on welfare to get goods and services. Furthermore, many of the greatest discounts need large-scale purchases—think Costco-sized ketchup bottles or 20-pack rolls of toilet paper. Families who are living paycheck to paycheck cannot afford to stock their cupboard.
Some businesses are concentrating their efforts on gaining a better knowledge of the requirements of these areas. Dollar shops have thrived and expanded due to their smaller footprints, dedication to selling goods with cheap prices per item (rather than simply bulk discounts), and many locations in low-income areas.
If you’re a small company looking to serve lower-income clients, you might consider joining the membership economy, which prioritizes establishing long-term relationships with customers.
The stages to creating a lifelong transaction, in which your consumers become members and show long-term commitment in return for your long-term attention on their well-being, are outlined below.
1. Determine which needs in your target segment aren’t being met.
Instead of “low-income customers,” start with “low-income parents of toddlers residing in urban areas.” You’re well on your way to starting a profitable new company if you can pleasure a few hundred individuals, or even a few dozen, by giving them what they want. After that, when you saturate each market, you may expand your offering.
Low-income customers are neglected in a variety of sectors today, the most of which are due to a lack of transportation and financial services such as credit cards, bank accounts, and loans. Both of these restrictions were overcome by Amazon Prime’s $5.99/month offer for EBT users. Uber and other ride-sharing services make transportation more accessible for those who can’t afford their own vehicle. Various sectors, such as food delivery, health care, and after-school programs for children, to mention a few, have plenty of space.
2. Work out a solution to the issue.
From there, come up with methods to assist them, focusing on all you can do to completely and permanently address the issue for the client. Instead than searching for short-term solutions through the perspective of what you presently offer, think outside the box about what consumers really want and need in their life.
Think beyond “a better cleaning procedure” to “having clean clothing in my closet,” which is a larger, longer-term objective if you operate a dry cleaner. While some individuals want to buy a vehicle, the majority of people just desire dependable, convenient transportation whenever they need it, ideally without the headaches of maintenance and finance.
What is your company’s main goal? What sort of “lifetime promise” can you offer to those you help?
- Maintaining people’s health (doctors, clinics, and gyms)?
- Keeping them informed about local happenings (newspaper)?
- What is the relationship between spirituality and community (church, temple, mosque)?
When you take a step back and consider how your services and products fit into your customers’ lives, you’ll see fresh service combinations that may be packaged creatively.
Consider some of the newer technology that may help you deliver in new ways. Can you, for example, set up a regular delivery or service schedule and allow your members to modify their schedules as needed? Alternatively, you may provide online assistance in addition to phone or cell access for when you’re on the move.
You can always reduce your product to a smaller version of this ideal vision, but it’s better to dream large.
The creator of AirBnb, Brian Chesky, speaks about delivering a “11 star” experience, which is much more than a 5-star one.
For instance, he says:
“When I stepped off the aircraft, there would be 5,000 high school students screaming my name and vehicles waiting to welcome me to the nation. When I got to your front yard, there would be a news conference for me, and it would be a mindf**king experience.”
3. Reduce the size of your product to the bare minimum (MVP)
What can you do today to make the individuals you wish to help happy? You may not be able to offer your clients with a cheering crowd, but you may come up with something unique.
For example, if your 11-star experience is offering low-cost organic food delivery to everyone, you could start by delivering a weekly meal to a specific neighborhood every Tuesday. Once you’ve established a modest level of success, you may expand—perhaps into other areas, or by providing more services, or by reducing your prices. Isn’t it true that you have to start somewhere?
Before investing in systematizing and growing each idea’s processes, test them in a less efficient manner while you explore different methods. For example, until the concept has been proved and developed, the project team may make deliveries.
Determine what you can offer your target audience that comes close to an 11-star experience. Try it out on a small group of people. Iterate after getting input from the group. You can be agile and change services, packaging, and price as you go when you’re tiny. If you want to learn more about how to accomplish this, Bplans’ post on demand validation testing is an excellent place to start.
4. Continue to fine-tune your offer.
Keep experimenting with your offering and your target customer until you achieve “product-market fit,” which is the term for a perfect match. Only when you’ve established that your clients enjoy it and have progressed from “consumers” considering other alternatives to “members” who are fully devoted to you, can you begin investing in raising awareness about your product.
This approach, by the way, applies to any underserved group, not just low-income customers. Small companies have a benefit in that you are likely already familiar with your top clients, giving you unique insight into their wants and problems. Because you really understand your market, and because you don’t need to grow to service millions to be successful, you can execute this process without expensive databases or technology.
As a result, begin by thinking little and clearly. Assist a small group dealing with a serious issue, particularly one that has gone unnoticed. Concentrate on eliminating the issue rather than sticking to “the way it’s always been done.” If you search for areas that are too tiny or too difficult for big businesses to concentrate on, you may be able to develop long-term loyalty.
Frequently Asked Questions
How do you find the underserved market?
A: I am not sure what you mean by this.
What are the underserved markets?
A: The underserved markets are the groups of people that are not being served by other companies. These could be different types of consumers, such as older adults or teenagers, but all have one thing in common – their needs arent currently met by other industries
Who are Amazon consumers?
A: Amazon is a retailer. Consumers usually purchase goods and services from Amazon.
- underserved markets 2021