6 experts take on opportunities & obstacles of category extension

by Apparel Resources

12-October-2019  |  7 mins read

Organisations use the foolproof strategy of category extension to increase and leverage brand equity as an already established name is used to market or sell an altogether new product category. While there are many advantages of category extensions, it can also be risky for a retailer or a manufacturing firm if it extends into an unrelated market.

On the same note, experts from the industry give the prerequisites for starting a new category in an already established catalogue of range of products and highlight how this strategy helps a brand or a manufacturing firm in the long run.

Varija Bajaj, Founder, Varija Lifestyles

Category extension is an obvious move for brands that have established themselves and reached a certain level of stability. Brand extensions are start-ups with an advantage of stable foundation and robust support system to sustain expansion. Being in the bridal segment for 15 years, we identified huge need gaps in the women workwear category, and hence launched Office & You in March 2019. Simultaneously, we launched our boho pretwear label called LELA this year. It has been welcomed phenomenally by the industry as well as our existing customers. We are into women’s apparel and were focusing on mostly bridal occasion. As a natural progression, we also ventured into home furnishings from apparel. It didn’t require us any additional infrastructure and was fairly easy.

Harkirat Singh, MD, Woodland Worldwide

Category extension is one of the essential strategies by which we use the same brand to enter into a completely unrelated product segment. The company leverages on the brand equity and success of its existing brand to introduce the new product to increase market acceptance. Also, extending a brand outside its core product category can be beneficial in the sense that it helps to evaluate product category opportunities, identify resource requirements, lower risk and measure brand’s relevance and appeal. But brand extension in unrelated markets may also lead to loss of reliability if a brand name is extended too far. Hence, one must research the product categories in which the established brand name will work.

Tanvi Malik, Co-founder, FabAlley

Category extension helps in upselling to customers. It is about your customer and the demand you create. Typically, FabAlley does a standard set of very trend-centric products but we also know that some customers want a standard basic, classic product. We ventured into workwear, nightwear in order to fulfil the different needs of the same customer. We recently launched ‘Curve’, which is a plus-size brand that carries Faballey’s design language and aesthetics for plus-size customers. While venturing into a new category or sub-brand, we always check if there is a sizeable demand for that particular category and if the market is under-crowded. We don’t subscribe to the notion of heading into something unrelated but believe in category extensions that lend themselves organically.

Akhil Duggar Jain, Executive Director, Madame

The brand sustains its appeal with constant innovation and freshness. Category extension opens newer avenues and business acumen, whereby the core category(s) becomes sustainable and brings in the required profits for the brand. The new category should be an extension of the existing portfolio and shouldn’t be a 180 degree turnaround than the core/existing catalogue. There should be an attempt that the new category can be marketed through the same network of sales and distribution to make a faster penetration. Larger players have been exploring extensions over a period of time, the ones with their own PoS find it a bit easier to market to the end consumer, while the ones into pure distribution have to innovate with a newer network of distribution.

Kamal Khushlani, Founder & Managing Director, Mufti

Mufti’s expansion into the footwear segment is a result of the company’s in-depth research that highlights the rising demand for trendy footwear in the casual segment for men. The points that we consider important are only relevant if the new category adds value to the existing products, offers clarity and direction, or charts out a direction. Innovation is the name of the game. This is why it’s an opportunity for any brand with a strong loyal customer base like Mufti to always retain them by offering more than what they ask for. Both our categories – apparel and footwear – showcase same brand ethos and tonality, yet are strong enough to stand on their own. Our category extension is very welcoming especially when it adds value to our existing product line.

Nathasha AR Kumar, Founder, Vajor

In present-day scenario, a brand needs to evolve along with its audience. Category extension not only helps in diversification in terms of product offerings but also helps reach newer audience that might have been under a rock for the brand. By increasing the variety of the offerings, a brand’s business expands while ensuring a better grasp of the target market. When Vajor launched as a brand, it started off as a pure women’s fashion brand. Eventually, it tapped into the home segment two years after the brand’s inception, keeping in mind that the brand wanted to cater to not just the clothing aspect of its consumers but also add more to the consumer’s modern bohemian lifestyle. And while the prerequisites could be a simple demand and supply, the starting of a new category in an already well-established catalogue of products requires market research, understanding of the needs of the target audience and data analysis along with budgeting and competition analysis. We realised that the concept of category expansion is welcomed if the fitment of the category is appropriate with the existing categories and does not deviate or dilute the parent brand’s ethos and ideologies.

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