In the case of SL Black Label, offering several new styles of baseball cap would be a diversification of sorts as we would be adding a new product. Whilst they may be new materials, shapes or colours, we are very much known for this product category, making such a step, a very low-risk diversification. Alternatively offering a range of bags and t-shirts would be much more extreme, raising many more questions and challenges.
Offering your customers new products which they couldn’t have attained from your brand previously will open up new revenue streams, as existing customers have more product available to purchase. Additionally, the new products may generate an entirely new customer base which could eventually lead to extra purchases of your existing product.
A campaign to present your followers with new products could be fortunate enough to help create a signature product which your brand becomes synonymous with. Nike’s venture into the Air Jordan footwear range is a classic example of a product introduction that became a signature item and no doubt helped Nike to sell many Air Jordan products such as t-shirts, hoodies, caps and more. To view our blog on signature products click here.
Whilst most fans of a brand will generally welcome new products, there is a multitude of risks to balance. The basic challenges include:
Clearly, we all know many success stories of a brand diversifying and doing incredibly well as a result of the process.
One of our favourites is the popular Italian brand Diesel. They started off exclusively making jeans, before deciding to expand their product offering and offer a variety of different clothing in the form of outerwear, women’s dresses and accessories. Diesel now has more than 400 owned stores across multiple countries and was worth 2.9B euros in 2015.
A recent Drapers article summed up how expanding your product offering can have both positive and negative effects as you can see below:
‘Diversifying your offer is an intelligent way to broaden your customer reach and increase sales, particularly in today’s challenging trading environment. However, new categories must appeal to – and not alienate – the existing customer base, and retailers must also be wary of losing focus on the core business.’ https://www.drapersonline.com/news/are-diversifying-retailers-diluting-their-offer/7030007.article?blocktitle=Latest-features&contentID=19374
Would expanding your range be a good idea for your brand or would you want to stick to your core products? Whether you’re looking to start a headwear line or add more styles to your headwear range, SL Black Label has got you covered!
To learn more about the fashion predictions from MILAN AND PARIS FASHION WEEK, or find out WHY AUDITS AND TESTING ARE SO IMPORTANT – not only for big retailers but also for the smaller independent fashion brands.