They say that fashions go in a cycle of 20 years.
It's the same thing in business – although I'm not exactly sure of the length of the cycle.
In this cycle, you hear how all the "big guys" chase the little guys out of business.
However, the tide turns and eventually specialty stores are emerging and are beginning to find favor with consumers.
I think we are seeing this now and I would like to give you some examples that you can probably associate with:
- Toys r Us goes bankrupt while all kinds of specialty toy stores are doing well.
- The big chains of sporting goods stores are fighting for their lives while the PGA shop is wildly popular with buyers.
- Apple Stores are always packed while Radio Shacks is closed.
This comes down to a theme I've always taught: Wealth is in the niches. And, with big chains struggling so badly right now, this concept can be extremely valuable for your future business projects.
We can enter into a little conversation between a chicken and an egg …
We can get into a little talk about the chicken and the egg: are small, specialized companies pushing big business out of business, or do smart entrepreneurs recognize that big business does not recognize the needs? and desires? of a specific niche group?
Whatever the cause and effect, I think keeping an eye on big companies or distressed business sectors could help you identify the "next big thing". Find an element of your business that you can pull out and sharpen to better connect with buyers. And remember, profit margins are always better in niche markets.
As a footnote, I must mention that at some point, consumers are starting to reevaluate the convenience of having everything under one roof and start putting pressure on small specialized companies.
The interesting thing to observe over the next decade will be the impact of the Internet on this cycle. Will we see the cycle reproduced on the web – Amazon eventually losing part of its favor – or the cycle will be broken?