Want to Reach a Niche Audience? These Geek Retailers Created a Blueprint for Success

As more digitally native brands start to home in on underserved consumer niches, like targeting hair-loss shoppers or cheaper shaving products for women, these upstarts can learn from geek fashion and beauty brands such as Crunchyroll, Her Universe and Shiro Cosmetics, which not only launched in the early days of ecommerce but also managed to stick around.

One key take-away: Think of consumers as a community and understand what products are missing in their life.

“There’s just an incredible benefit in really going deep and understanding your audience and solving a problem for them,” explained Emily Heyward, co-founder and chief strategist at Red Antler, a branding company.

Shiro Cosmetics, a vegan, cruelty-free makeup, two-person company, has enjoyed $2 million in sales since launching in 2010, with about $300,000 to $400,000 in sales each year. Caitlin Johnstone, founder of Shiro Cosmetics, attributes much of her success to indie beauty bloggers who touted her makeup—as well as the power of going viral. For instance, a Harry Potter collection dubbed Marauders, Mugwumps and Muggles, which generated $104,000 in sales in October 2016, was called out on the Better Homes & Gardens Facebook page and was linked to on Reddit.

“We were one of the first to specifically provide makeup for a geeky audience,” Johnstone said. “We only do collections for fandoms that we feel strongly about, and people who are into that fandom can feel that personal connection there.”

Shiro Cosmetics started to pay for advertising to drive growth in late 2017, but Johnstone claims the company remains profitable (and has been every year since debuting). It’s even opening up a store later this year in Oregon City, Ore.

At San Francisco-based anime/manga streamer and publisher Crunchyroll, the Ellation-owned media company historically found that women’s anime fashionwear didn’t have much interest, noted Mike Melby, Crunchyroll’s director of consumer products. However, the company released a campaign in April 2017 for Japan’s popular anime skating TV series Yuri!!! on Ice and for the first time promoted women’s themed apparel. About an equal amount of items were developed for both men and women, but the women’s products outsold the men’s by more than 50 percent (Melby declined to provide the actual number of units sold).

The campaign included a panel discussion with Olympic figure skater Johnny Weir at Crunchyroll Expo 2017 and numerous collaborations with companies like Sanrio and Hot Topic. Melby, however, thinks the success is due to the show’s mass audience appeal, noting that it was the Anime of the Year at the Crunchyroll Anime Awards and is a top performing series on the site since October 2016.

Crunchyroll now runs other similar female-focused campaigns. “Boutique anime is starting to find its way in the foreseeable future and Bananya [an anime about a cat that lives in a banana] and Yuri are a big part of that growth in retail,” Melby said.

There might be no bigger success story in geek fashion than Her Universe, which generated $5 million in sales in 2014 before being acquired by Hot Topic in 2016. As a voice actor part of the Lucasfilm universe, Eckstein landed a Star Wars license to sell nine T-shirts at conventions and on the Her Universe website. Eckstein said it forced her to become a “walking billboard” at conventions and Disney events where she tried to build a community around the concept. That helped, as did her own personal blog and message boards that promoted the clothing.

The shirts continuously sold out and the company grew from there, expanding to a partnership with Disney Parks for Star Wars Weekends in 2011, with merchandise selling out the first weekend. Her Universe then went on to do collaborations with Kohl’s, Torrid and other clothing retailers.

Eckstein credits the success of Her Universe to both the merchandise and to growing the company as a community for all people to celebrate their interests. “Our message at the end of the day is not to say these properties are just for women and girls or men and boys—it’s for everyone,” she said.

The success of these companies isn’t that surprising to Matt Kaden, managing director at MMG Advisors, a retail financial advisory firm, since these brands are engaging with a community that had an unmet need in the industry.

“The niche consumer that’s been largely ignored for a long time because it wasn’t a large enough market is now able to be addressed and spoken to and communicated with,” Kaden said. “The way we perceive brands as consumers is changing and it’s absolutely changing to a position of niche.”