Specialization in niches for eCommerce niches

  • We are going to tell you why the specialization in niches is the best strategy for eCommerce. Worth a search for yours!

  • Many times we take the decision of starting an eCommerce before deciding what to sell. If you are in that stage, this post can help since it explains why the specialization in niches is the best eCommerce strategy
  • What is a niche?

  • We refer to the area of specialization of a specific company and the segment or segments of audience that consist of. 

    On the internet or in retail market is always fragmented and often it can even be a little more fragmented. This is the key: split the segments into small business units that respond to specific needs of certain audiences that are not satisfied yet or have not found its maximum point of saturation in terms of competitors yet. 
  • Looking for the perfect niche for eCommerce

  • Imagine a sector like fashion, in reality that cannot be considered a niche because it is too abstract. It admits too many segments and audience from broader filters such as clothing for man/woman/child or the type of garment (shirts, outerwear, footwear...). If you sell clothes of all kinds for all audience horizontally, you are not working a niche, in the best -case scenario you are working several. 
  • Recently we talked about AmazonĀ“s strategy in the field of fashion. There is no one with a more horizontal approach than this marketplace. They aim to sell anything for everyone, but at the same time they are aware of a reality: customers have specific needs and this is why they have created their own fashion brands with different segmentations: 

    • formal wear for women who go to work. 
    • Comfortable Pyjamas for women. 
    • Male clothing to go to a wedding or event. 
    When you apply some extra segmentations to those large segments it is when niches begin to appear. If you decide to sell clothes for children and you are fine-tuning, although you still keep a representative (and competition) monthly search volume. Then, if we add the variable "same clothing for children and parents" it gets much more interesting, this is a very specialized niche
  • Which features should they have to be profitable?

  • Obviously, any business is ruled by profitability. Deciding on a niche or another is a very delicate moment because it will mark the entire strategy, from the level of product or sales channels to communication. 

    Let's say that a niche for eCommerce that really worth must have the following variables: 

    • Search volume. 
    • Level of competition. 
    • Average ticket. 
    • Recurrence. 
    Search volume determines the interest that exists currently. Ideally we will search for niches that have enough searches as to generate potential clients from any online channel (SEO, SEM, Social Media, direct...). When we have the product very clear but we see that there are no searches, it does not mean that we have to give up, but it is true that the work of "creating those searches" is not simple and supposes an investment far greater that exploit an existing audience. 
  • The level of competition is also important because if there are enough searches and few competitors you have the perfect storm. On the contrary, there may be not many competitors and also not many searches: Here, we would have to reconsider what we talked about in the previous point that is: Is it worth creating the niche from scratch? Is it feasible? 

    As for the average ticket and recurrence, these are two complementary values but which can determine the viability of the niche. If your average ticket is high, even if you produce a relatively small number of sales, you will be covering the needs of profitability. On the other hand, you may not sell your products so expensive, but they should be of high rotation, or that your audience is very loyal and place recurrent purchases. This would balance one thing with another. 

    In addition to all we have already mentioned, I would add scalability. If you go to the market with a particular product or products do you have margin for growth? Are there other lines related to these products and your niche allowing you to increase sales? This often happens, but in marketing all what you can strategically plan is a step forward, anticipating what you will do in the future will help you to act in the present without closing doors or complicating the decisions you will have to make later on. 
  • Does it really interest you?

  • The truth is that I have no doubt: specialize in niches is the best strategy for eCommerce. At least, if you do not have an almost unlimited financial capacity or cross product that everyone wants. That is, or you are Coca-Cola or you should work on niches. 

    The main advantages is that they can become very profitable, they are scalable because they allow you to sell more products or services related to the current ones, or open to related niches. You have a greater control over the investment and, in addition, it allows you to set your branding from scratch and become yourself not only a commercial benchmark but also an advisor (people will rely on those coming first if it shows a career). 
  • EXAMPLE: Look at the case of Under Armour, a company dedicated to sportswear that sells millions but, do you know what was its origin? 500 t-shirts specially designed for athletes who hated their clothing got soak in sweat, an investment of about 15,000 euros that has been transformed into an example. 
  • If you want to learn more about how to discover profitable niches for eCommerce and how to sell them, I encourage you to read some of the posts we already wrote here that can help you to make up your mind and give you ideas of how to explode them and serve as inspiration. 
  • What is your eCommerce niche? Share with us which niche you think you are going to explode in the following months

  • Images | Fotolia. 

Miguel Nicolás

Miguel Nicolás O'Shea is a life-long copywriter (more than 15 years working in agencies) and a specialist in Search Marketing (SEO and PPC). From now on, he will contribute with his online marketing experience to Oleoshop, publishing regularly.

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