Retail Dogma

Specialty Store

What is a Specialty Store?

A specialty store is a retail store that sells a specialized line of merchandise, related to a specific category of products. They are the opposite of general stores, which sell general lines of merchandise, such as department stores.

Furniture stores, florists, electronics and appliance stores, office supplies stores, pharmacies and book stores are all considered specialty stores.

The Business Strategy

Specialty stores can either follow a cost focus or differentiation focus strategy.

Specialty store business strategy
Slide from the Strategic Management Course

In focus strategies, the business identifies a narrow target market, and tries to serve this market with the right products that appeal to them, and compete by either selling at the lowest prices in the market (Cost Focus) or by offering differentiated products and services (Differentiation Focus).

Specialty stores that follow a cost focus strategy, and are able to take the biggest market share in their respective category are called category killers.

Advantages of a Specialty Store

Specialty stores have many advantages, and these include:

1. Branding & Positioning

The biggest advantage of a specialty store is its ability to position itself in consumers’ minds as the go-to place, whenever they need specific products related to its specialized category. This is something that is hard to be achieved by general merchandise stores, as they do not stand for a specific line of merchandise in the consumer’s mind


2. Depth of Product Assortment

Because a specialty store typically follows a higher depth product assortment strategy compared to general stores, it can carry a deeper assortment of merchandise, with products that might not be carried by other general stores that follow a low depth strategy.

For example, it can stock different varieties and sizes from the same product, while other stores might be limited to only a few varieties and a limited size run.

3. Product Expertise

Due to the specialization in the category, a specialty retail store can position itself as the expert in that category, and hire and train its employees to be expert product advisors. This, again, helps the positioning of the brand in consumers’ mind, and further establishes the retailer as the go-to place for that specific category


For example, Victoria’s Secret has a spacial role of “Bra Expert” at its stores. Customers can ask this expert about the best type of a bra that suits their body shape and fits their need from a bra.

Disadvantage of a Specialty Store

Disadvantage of specialty stores include:

1. Narrow Assortment

While the product assortment is deep, and this was an advantage, this type of store will carry a narrower assortment, when compared to general stores. This prevents it from being a one-stop shop for customers who like to get their shopping needs fulfilled through fewer shopping visits to fewer stores.

2. Competitive Risks

Specialty stores have come under pressure with the rise of mass-market retailers, who were able to sell products at lower prices, such as Walmart and Amazon, as well as category killers, who specialize in the same line of merchandise, but use economies of scale to source and sell products at lower prices.

Specialty Store Examples

  • Barnes & Noble
  • Home Depot
  • Toys R Us
  • CVS
  • Dick’s Sporting Goods
  • IKEA
  • Victoria’s Secret
  • Office Depot
  • PetSmart
  • Chewy
  • Warby Parker
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More Resources

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