Niche marketing, niche products - you’ve heard all the business talk about finding your niche in retail...in the market...in life! But what does “finding your niche” actually mean and how do you go about doing it?
First, what does the term niche market actually mean? It’s a specialized, specific spot within the larger market. You could sell men’s work shirts, or you could sell organic, sustainably sourced men’s work shirts for vegan lumberjacks, the latter of which would be your niche. It’s about finding a space within the market for a very specialized product or service, or finding what unique value your company adds to a more generic product.
Where do you find this niche market? It’s not so much about finding it, but more about creating it. One doesn’t have to already exist - you can look at everything you offer and create a space within the market. Not sure how to define your niche? Start by answering these seven questions.
1. Which of your products sell the best?
This can be a good start to exploring your niche market. By looking at which of your products do extremely well in the current market, you begin to see where your strengths and unique qualities are. This question helps you confirm one simple, essential thing: what you do best.
If you sell 15 different pairs of pants, and one type with special cargo pockets always sells out, take a look at that pair. Discover which pain points you’ve been addressing and what the overall demand is. It also helps you see which of your products are more unique than others, and therefore would be profitable to focus your niche on.
2. What makes your product incomparable in the market?
When you look at your products, what stands out as especially unique, interesting and difficult to replicate? Identify what you do that no one else can.
Check out Thug Kitchen’s blog and cookbooks. How many cookbooks and food blogs are there in the world? Hundreds, thousands, tens of thousands... But how many of those manage to give a delicious recipe for lamb couscous while slightly offending you with in-your-face profanity and making you laugh, all at the same time? They’ve got that niche covered.
3. What problem or pain point are your products solving?
Your customers turn to your products to fulfill a specific need, or address a certain pain point. Define what that is, so you can keep adding value to your offerings.
People everywhere struggle with time management; keeping events, meetings and other important dates straight in their day-to-day life. There are also millions of day planners, calendars and journals to help track your time, but one - Day Designer - really stands out. They sell day planners that are not only extremely functional and organized, to address the pain point of time management, but also look very pretty. By identifying and capitalizing on one common need, Day Designer is able to create and sell a highly specialized product.
4. Which customer group is facing this pain point?
What are the demographics of most of your customers that have this pain point? In eCommerce you can use Google Analytics to find out about the demographics and purchasing habits of your customers. Once you know this, you can further define who your target market is and how to address their needs.
If mostly women between the ages of 25-35 are buying your product, in the evenings, on a mobile device, this further defines your niche and who you should market your specialty product to.
5. What is the unique value of your products?
Your products have additional value when compared to similar products from other retailers. Focus on what that is, and how you can turn it into an even bigger advantage.
Bombas sells high-quality, awesomely comfortable athletic-leisure socks...just a bunch of different socks of varying styles, colors and sizes. What sets them apart from any other sock seller is 1) high quality socks, because that’s all they focus on, and 2) a charity aspect - for each pair of socks bought, another pair is donated to a homeless shelter. They not only target people who love comfortable socks, but those who like to give back to society - and the value added is the social call to #beebetter.
6. Are the unique aspects of your products scalable?
Can your supply chain handle an increase in demand? If you start focusing on a niche market, your demand for those niche products should go up, which means production has to increase.
You sell handmade, unique watches where each watch is different from the others. If you suddenly went from having to produce 1,000 watches a year to 10,000, how would that affect your quality and production?
7. Is your niche market sustainable?
Think about the market that you’ve chosen. Is it the result of a fad or other trend that probably won’t be around for much longer? Think about whether the pain point you’re addressing is long-lasting, recurring, or a one-off event.
Imagine your city is about to celebrate a holiday that only happens every 147 years based on the first full moon in the year when Jupiter aligns with the sun on the second hour of a solar eclipse. On this holiday, people wear hemp t-shirts decorated with silver string, which you have decided to sell. Is this a niche market? Definitely, but is it sustainable? Not unless you’re around for the next 147 years. Think about how long the demand for your product will last once you start selling it.
Focusing on a niche #FTW
Defining a niche and focusing on it brings competitive advantages to your business. Rather than competing with everyone who sells the same general products as you, you differentiate yourself from the rest by addressing a very small, very specific pain point within the market. By narrowing the focus, you’ll have less direct competition.
You’ll know exactly who your customers are, which brings direction and focus to your marketing activities and communications. This knowledge also helps in product development and expanding effectively in the future.
Also, specializing in one or a few things makes you really good at those things. You can focus on improving quality and functionality of a few products, rather than many. You could also become a resource for that very specific thing; building your brand and increasing brand awareness, even if people don’t need your product at the moment.
Define your niche and hit the market!
Once you’ve worked out all the answers to these seven questions, choose your niche and go for it!
If there’s a niche market for a product that promises to guard your bananas, (nope, not a euphemism, it literally protects your bananas), then there’s probably a space in the market waiting for your amazingly unique products too.