Ways to Validate Your Niche for Less than $100 (Part 3 of 3) – Gift Card Incentive

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This is the third episode of our series on niche validation. You might want to read part one and two to get the whole picture. 

I recently spoke to Carl Thompson from hawkinsandshepherd.com. Carl quit his day job and was able to replace his income with sales from his online store. Carl's store sells a particular niche of men's dress shirts that have a pin connecting the collar where a tie would normally go. Click here to listen to Carl's journey. The pin collar shirt style was popular in the 1920s and recent movies like The Great Gatsby brought some buzz to the style, but pin collar shirts still aren't mainstream, yet.  It was still a niche in the male fashion marketplace.

Big brands like Tom Ford carry the same style of shirt, but Carl beat these brands, by being the first to notice that the niche was growing. He felt so strongly about his niche validation that he quit his day job and full committed to serving this section of the male fashion market.  Here's how Carl was able to validate the sweet spot opportunity where demand is far greater than supply.

Live like your customer

Imagine what your target customer does on the weekends, where they go after work, where they go during their lunch break.  These are all places that you can go, in person, and validate directly with the very people that might buy from your online store. Carl had a feeling that there was an underserved market he could go after.  He developed this hunch because he was wearing these custom-made pin collar shirts and people would often come up to him on the street to ask him “where did you get your shirt?”… and he couldn't give them an answer because there were no stores — he had to get them tailor-made. So, Carl set out to validate his niche. He would go to places his ideal customers went to shop, in his case, he went to the most popular strip of tailoring and fashion stores in London on Jermyn Street and Savile Row.

Carl would talk to the store owners to find out if there was anyone asking for pin collar shirts and the overwhelming response was “yes!” He also noticed that there was no stores carrying the style.  Carl learned through his in-person validation that shoppers would buy regular shirts and then pay a tailor 200 pounds to transform the shirt in to a pin collar shirt. Popular luxury brands like Tom Ford carried the style, but when Carl walked in to the Tom Ford store, he found that the pin collar shirts were stuck in the back of the store.  The demand for pin collar shirts vastly outweighed the supply.

After talking and observing customers and noticing the lack of visibility stores were giving to the style of shirt, Carl recognized that there was an opening for him to manufacture and sell the pin collar shirts for a fraction of the cost of getting it tailored.  That was the catalyst for him to quit his job and start pincollarshirts.co.uk. You can validate you niche the same way Carl did.  Just follow these steps:

How to validate your niche by talking to customers

Step #1: Research where your customers hang out

Write down all the places…

  • Your ideal customer shops.
  • That sell the product you want to sell.
  • That sell a competing product.
  • That sell a complementary product.

Step #2 Go to those places in person and people watch

Dedicate a Saturday and try to find places that are clustered together so you don't have to spend too much time running around. Talk to the store workers there.  Sales associates talk and help your target customers on a daily basis so they are intimately aware of what your customers are looking for and what they are buying.  If you are going to a big chain and not a mom and pop shop, most sales associates are happy to talk to you. Hang around outside or in the store and observe how the customers shop.  Write down the following observations:

  • What products are they looking at?
  • What are they buying?

If you are daring, go up to anyone that's browsing the product or products you want to sell and ask them questions about what they look for in a product before they commit to buying. If you feel awkward approaching them, that's natural.  It doesn't feel right to bother people when they are out shopping.  So what you can do is compensate them for their time…

Step #3: The Gift Card incentive

If you haven't heard of the Starbucks test yet, what you can do is go buy a few Starbucks gift cards and ask people if they can spare 15 minutes and in exchange for their time, you will give them a Starbucks gift card.  I recommend you buy 8 $5 Starbucks gift cards. You can improve on this and increase your conversion rate by getting gift cards from the store that you and the customer are already in.  You'll get tons of people that are willing to give you their feedback.

Step #4 What to say and what not to say

The most important thing to remember is: do NOT talk about your product or store idea.  This is important because you are not trying to pitch them on your store idea, what you want to do is understand why they buy and what problems they are trying to solve by buying. Telling a customer about your product doesn't tell you much about why they buy and it can actually cause them to skew the answers they give.  Because once they know that you are trying to start a store, they might just answer in favorable ways to please you — it's a common human reaction. In fact, don't even tell them that you are thinking about opening a store.  Just mention that you are conducting research for a friend. Here are some questions that you should ask:

  • “Can you tell me when was the last time you bought _____”
  • Fill in the blank with your product or a complementary product
  • If they've bought the product before… “what drove you to buy _____?”
  • “What don't you like about _____?”
  • “What do you like about _____?”
  • “What other similar products have you bought before?”
  • “What did you like/dislike about those other products?”
  • “What makes you want to choose _____ over <competing product>?”

What are other ways I can validate my niche?

There you have it, 3 ways to validate your niche for less than $100. There are many more ways to validate a niche.  I talk about this topic extensively with my guests on the Shopify Masters podcast. If you want to learn more techniques and hear the stories from entrepreneurs that have actually applied these techniques, make sure to sign up to get weekly interviews and tips from successful ecommerce entrepreneurs (Access Here).

Felix Thea

Felix is the host of the Shopify Masters podcast where he releases an interview every Monday with a successful ecommerce entrepreneur to uncover the exact steps they took to increase traffic and sales and ultimately achieve their financial freedom.

Comments 2 Responses

  1. My husband might like using a technique like this one because he loves interacting with strangers and has a way of making you want to tell him what he wants to know. Swing Thanks for sharing, that is really useful to me.

  2. Researching where your customer hangs out makes complete sense to me but actually going to those places and watching your potential customers is something that not many do. I didn’t know about the Starbucks gift cards because I don’t go there at all.

    My husband might like using a technique like this one because he loves interacting with strangers and has a way of making you want to tell him what he wants to know.

    Thank you for the article! I found it very useful!

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