The global lingerie retail market is expected to reach $59.1 billion by 2024. Although this market is dominated by world-famous brands like Victoria’s Secret, La Perla and Wonderbra, you too can become successful with hard work and creativity. Starting a lingerie business comes with its share of challenges, but the rewards are worth it.
Research the Market
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Before getting started, take the time to research this market so that you can identify potential opportunities. Make sure you have a good understanding of the latest industry trends, major players and prospective clients. It’s important to know your competitors, what they offer and what they do best. Determine their strengths and weaknesses and then come up with a business plan that will give you a competitive advantage.
The lingerie market is forecasted to grow at a compound annual growth rate of 5.5% between 2019 and 2024, according to Mordor Intelligence. Currently, most customers are based in North America. If you plan to sell your products online, you can target a global audience.
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Most customers care more about style and comfort than pricing. This means that if your products are better than those of your competitors, you may set higher prices and generate revenue in a relatively short time. The downside is that you’ll compete against big names like Triumph International, American Eagle, Walmart, Jockey and L Brands. The number of stores opened by Victoria’s Secret, for instance, has increased 10 times between 2012 and 2018.
Find Your Target Audience
Go to any lingerie store and you’ll find a wide range of products, from shapewear and loungewear to fine lingerie, men’s underwear and high-performance underwear for athletes and gym-goers. Each category targets a different audience. Therefore, you need to determine your customers and then adjust your marketing efforts accordingly.
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Take men’s underwear, for example. This market was worth over $10 billion in 2018, and it’s expected to grow over the next few years. Briefs, trunks and boxers are among the best-selling products. Millennials are the largest customer segment, as they’re more receptive to new designs than older generations. They’re constantly seeking innovative products with distinctive colors, prints, materials and styles.
Cotton was the most popular fabric in 2018, with a 68% market share. Next on the list are polyester, modal fabric and nylon. As expected, the women’s lingerie market has different characteristics. That’s why it’s crucial to decide what you want to sell or what your ideal customer looks like.
Starting a Lingerie Business
Determine whether you want to start a lingerie line, sell products from other brands or buy a franchise. Each option involves different costs and requires a different marketing strategy. Launching a lingerie brand will be more expensive than starting a regular lingerie store. Franchising costs will vary from one brand to the next.
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Change Lingerie, Bradoria, Yamamay and Intimissimi are all examples of successful international brands with extensive franchising networks. Each has its requirements for aspiring franchisees. Yamamay, for instance, states that franchisees must be able to cover the costs involved in running a store (which must be at least 90 square meters), including the furniture, transportation, insurance and engineering work. As a franchisee, you can only purchase and sell Yamamay products.
If you decide to launch a lingerie brand, you’ll have to cover the costs of manufacturing, storage, distribution and more. Additionally, you’ll need to choose the right distribution channels for your products, such as specialty stores, online stores and supermarkets. The most affordable option is to open a local lingerie store and sell popular brands. You may also set up an online lingerie shop and promote your business to a global audience.
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Make a Business Plan
Next, write a business plan for your lingerie store. This document should cover all aspects of starting a lingerie business as well as the steps needed to reach your audience, market your products and comply with the law. It must also include an industry overview, niche ideas, potential opportunities and threats, primary competitors, suppliers, costs and more. Cover the following factors in your business plan:
- Executive summary (a brief description of your business, its mission statement, its products, leadership and growth plans)
- Company description (a detailed overview of your company, including its products and services, target customers, etc.)
- Market and competitive analysis
- Products and services and how they benefit customers
- Strategy and implementation
- Management (describe the key players in your organization)
- Legal aspects (type of business, permits, licenses, etc.)
- Financial aspects (including financing options and financial projections)
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Marketing and sales strategies
Companies that have a business plan experience 30% faster growth than those without one. Additionally, they are twice more likely to grow, secure financing and attract investors. This document serves as a road map for starting a lingerie business and reaching your marketing goals. It describes the exact steps needed to launch your store, find suppliers, develop and promote your products, obtain funding and more.
Your business plan should also include relevant information about your store. Decide where it’s going to be located, how many square meters it should have, how many people will be in charge of it and so on. Depending on your budget, you can either purchase or rent retail space. Assess the costs involved, including salaries, utility bills and maintenance costs and make a decision accordingly.
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Legalize Your Business
Starting a lingerie business involves several legal steps that will vary from state to state. Regardless of your location, you must first choose a business structure, such as a sole proprietorship, a limited liability company, a partnership or a corporation. In general, the first two options are ideal for small businesses and involve the lowest costs. As your company grows, you may change its structure.
The next step is to find a name for your lingerie business. Think about your target audience and its needs. Your company’s name should appeal to those customers and reflect your brand identity. Once you’ve decided on a name, register it with state and local governments and then apply for a federal tax ID number with the IRS, which can be completed online at no charge.
As soon as you register your company and get your tax ID number, you may open a business bank account. You may also need to apply for business licenses and permits; these requirements vary among states. For example, if you open a physical store, you may need a zoning permit. Also, don’t forget about business insurance, employment contracts and nondisclosure agreements for your staff.
Promote Your Lingerie Store
Make sure you have a marketing strategy in place before launching your business. This strategy will change over time, so be prepared to brainstorm ideas and seek new ways to promote your brand. For the start, focus on building a solid online presence.
Create a website or blog even if you don’t plan to sell your products online, set up business profiles on Facebook, Instagram and LinkedIn and ensure that your information and contact details are consistent across all platforms. Sign up on business directories like Google Places, Yelp, Local.com, Yellow Pages, Merchant Circle, Citysearch and others. A strong online presence will help increase brand awareness and drive foot traffic to your lingerie store.
Team up with other businesses in your area. For example, you can engage in cross-marketing with clothing stores, beauty salons, fashion agencies and other local or national companies. Send out press releases when launching new products and services and advertise in local newspapers to gain exposure for your lingerie business. Consider hosting in-store events that appeal to your audience and invite fashion designers, organize seminars or set up a photo booth for your customers.