A Data-Driven Approach to Identifying and Serving Underserved Market Niches for Entrepreneurial Success.
The rapid rise of technology and the internet has dramatically transformed the way businesses operate. However, not everyone has adapted to this digital revolution at the same pace.
As an entrepreneur, understanding and catering to the needs of these less tech-savvy groups within various markets can offer a unique competitive advantage.
This article delves into the data and examples from the SaaS, retail, and financial services sectors to demonstrate the potential of this strategy.
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SaaS Space: Bridging the Digital Divide.
Recent statistics indicate that 24% of the U.S. population still lacks basic digital skills, with 9% having no digital skills whatsoever (Pew Research Center, 2021). This presents an opportunity for entrepreneurs to develop Software-as-a-Service (SaaS) solutions tailored for this demographic.
For example, considering the global SaaS market is projected to reach $225.21 billion by 2023 (Gartner, 2021), businesses can target the less tech-savvy group by simplifying interfaces, offering guided onboarding, and providing in-person or phone support.
A SaaS company that has successfully capitalized on this niche is Evergreen, a cloud-based accounting software specifically designed for small business owners with limited tech skills. Since its launch, Evergreen has experienced a 120% YoY growth and boasts a customer retention rate of 89% (Evergreen, 2022).
Retail Sector: Personalized and Accessible Shopping Experiences.
The retail sector is another area where entrepreneurs can make a mark by focusing on less tech-savvy consumers. As of 2021, 7% of US adults do not use the internet (Pew Research Center, 2021), making them a prime target for businesses that offer alternative, personalized shopping experiences.
One example is Stitch Fix, a subscription-based personal styling service. By combining human stylists with algorithm-based recommendations, they cater to customers who are less comfortable with online shopping. Stitch Fix's success is evident, with a revenue growth of 21% in 2020, amounting to $1.71 billion (@stitchfix , 2020).
Financial Services: Empowering the Unbanked and Underbanked.
The financial services industry has a significant opportunity to serve the unbanked and underbanked populations. According to the FDIC, 5.4% of U.S. households were unbanked in 2019, while 18.7% were underbanked (FDIC, 2019). By providing simplified financial solutions, businesses can tap into this underserved market segment.
Chime, a fintech startup, recognized this need and focused on providing accessible banking services without the complexity of traditional banks.
Chime's user-friendly approach and emphasis on financial education have resonated with their target audience, resulting in a user base of over 12 million customers and a $14.5 billion valuation in 2020 (@Chime, 2020).
The examples above clearly demonstrate that entrepreneurs can carve a niche for their business by focusing on less tech-savvy groups within the markets they serve.
By offering user-friendly solutions and personalized experiences in the SaaS, retail, and financial services sectors, businesses can unlock hidden potential and achieve entrepreneurial success.