Hot Topic: A Competitive Strategy We Should Be Thinking About

Hot Topic has reported their results for the quarter ended October 31 and their sales for the month of November. Their sales were down some for the quarter and more in November, but they continued to make money in the quarter and their balance is very strong.

But I don’t want to crunch their numbers. I do enough of that. I want to focus on their strategy and its relevance to the Action Sports Space. I’ve talked about his before but I feel like doing it again. I think it’s important. Here’s how the company describes itself.
“We are a mall and web-based specialty retailer operating the Hot Topic and Torrid concepts, as well as the e-space music discovery concept, ShockHound. At Hot Topic, we sell a selection of music/pop culture-licensed and music/pop culture-influenced apparel, accessories, music and gift items for young men and women principally between the ages of 12 and 22. At Torrid, we sell apparel, lingerie, shoes and accessories designed for various lifestyles for plus-size females principally between the ages of 15 and 29. At ShockHound, music lovers of all ages can come together and purchase MP3s and music merchandise, share their music interests, read the latest music news and enjoy exclusive editorial content about their favorite artists.”
“At Hot Topic, our business strategy is built on the foundation of pop culture and its relevance to our target teen customer. Within pop culture, we believe music plays a primary and integral role in the minds, activities and preferences of our target customers. Our comprehensive music strategy encompasses a high level of focus on the in-store music experience. We continue to: focus on music and music/pop culture oriented merchandise; operate a fundamentally regular price business; emphasize superior customer service; and ramp up our efforts to host unique in-store events.”
These people are after our customers. Not so much the people who actually surf, skate, and snowboard (though they’ll be happy to have those too, I’m sure) but the rest; the fashion influenced, lifestyle customers that are where at least a majority of our sales come from now.
We have to convince that customer that what we do (surf or skate or snow) is cool and that they should want to be a part of it. Hot Topic says, “Tell us what you think is cool and what you want your shopping experience to be like, and we’ll try and give it to you.” They don’t have roots to worry about and as we’re more and more the fashion business, I see it as a big advantage.
It’s not easy to make the transition from an activity based brand to a lifestyle, fashion brand. Hot Topic doesn’t have to.