When entering the retail apparel industry, a new entrant must focus on overcoming the barriers of advertising, resources, and competition.
Advertising is a market barrier in the retail apparel industry as the incumbent industry can strive to make it hard for the competitor to penetrate the new market. The existing firms spend so many resources to publicize their image and make it unaffordable for the new competitors. The existing firms create their image through advertising to form a consumer preference for the brand from the other brands to a level that the users perceive its brand as a slightly diverse brand. Since the product is perceived as different, brands from the new entrant cannot be correctly substituted in favor of the incumbent’s product. This leads to complications towards penetrating the market by the competitors. To maintain the market power in advertising, Urban Outfitters embarked on efforts to improve the company’s image by carefully handling distribution and expansion programs that avoid the look and the feel of a big-box retailer.
Another market barrier is the availability of resources. Established and well-experienced industries are able to manufacture apparel, at reduced costs, according to the trends and fashion at the time than the small ones. Cost advantages, can at times, be quickly turned around by progress made in technology. The retail apparel market regularly coddles as much as it kills. Inability to cope with the changing tastes and fashion in the market has caused major retailers to quit. It requires adequate resources for a retailer to open a retail shop, develop a right lead of the market, and have a technical mastery of the market.
Competition is the third market barrier. If the incumbent firm has adequate control of resources, then the entrant retail firm’s entry into the market is made difficult. Their strong establishment in the market may mean that they have many loyal customers to their products. This offers a strong competition for the incoming firm to beat for them to penetrate the market. Urban Outfitters has been able to compete effectively in the brutal market by keeping its selections fashionable and spreading appealing products throughout its different stores.