Specialty retail appeals to people into whatever it is you sell. If it’s horseback riding, it sounds cool to run a barn. If it’s fly fishing, it sounds cool to sell specialty lures. If it’s gaming, it sounds cool to own a game store. However, specialty retail is, by definition, so specialized that there is rarely room for too many businesses doing the same thing.
In Rochester, we are quite lucky to not have an over-saturation of game stores. In other cities though, I have noticed an explosion of them. This would be fine, if each store offered a unique value proposition. One sells costume armor, another custom dice, a third Magic: the Gathering, a forth might have spectacular customer service or atmosphere, and so on. The problem right now is that most successful game stores sell the same items, and few bother to differentiate themselves. Most are 1 person operations. Most are run as a hobby. Most sell only what the owner likes. As a result, most game stores fail.
So whatever market you’re in, develop and plan for niches that are yours. Find ways to develop your customer service and be the place for whatever your niche is. If it’s RPGs, make custom pencil dice (you’d be one of the first places to actually have that product). If it’s Magic print some custom tokens, run great events, or whatever your customers respond to. Don’t be a slave to what other stores are already doing successfully. Your competition says “inventory turn rate is how we determine products to keep around.” Guess what? Turn rate is partially a product of how well you focus your staff on selling a product – we turn 5th Edition D&D Players Handbooks faster than any store I’ve talked to, but we do that because we focus on that product.
So in a specialty market, you need to hyper specialize. Those that do, and do it well, will thrive. Those that don’t, will ultimately die like all the big chains that sold samey products that are losing their butts in this market right now.