There are many profitable niches out there and new ones coming into the marketplace every day. They’re waiting for you to tap them.
Why don’t more retailers focus on niche markets? It’s mostly about fear. Fear of actually losing on sales. You don’t have enough sales already… right? You are concerned, you won’t find enough customers and you’d be walking away from known sales today that you already have? Wrong!
These fears are unfounded for the most part. While establishing your retail in a new niche may take some time and it will mean getting out of your comfort zone, but there are a lot of money to be found by being a big fish in a smaller more focused pond. There is nothing to be gained by being just another small fish in an ocean of customers filled with whales who may end up swallowing you whole. If you don’t make a substantial change in your approach, how can you expect different results than you’ve had for years? The fact is, in the competitive marketplace of the future, the demand for specialized products or services will only increase.
As I have said often, the key to surviving and thriving in a competitive retail environment is to find and dominate a niche of your own. You’d be a lot smarter. If you do what they can’t-focus and become the expert in a highly specialized segment of the market. Instead, focus on one or two very specific segments of the market where you can become a real player in your geographic area. Why advertise and go after everyone, when you can focus on your customers in a more specific place where your kind of customers can be found? You can and must establish your retail by finding a specialty niche and being better at it than anyone else.
Unique Product or Service = Less Competition
The less competition you have, the more in demand you are for “your” market. And the more in demand or unique you are, the less important price becomes.
“Aiming on a niche involves picking out a specialized corner of the market and diving in. It means making or selling products for one special person, instead of selling a variety of products to a variety of customers.”
You Can’t and Won’t Please All Customers
The hard and scariest part of trying to do this is realizing that you simply won’t be able to make all customers happy. If you choose to specialize in the sale of gourmet pet treats, for example, then you won’t exactly please those who come into your store looking for parakeet cages.
Niches Can Be Too Small Or Low in Sales
If you’re having a hard time coming up with one really strong niche, you may even want to come up with a 2-3 smaller niches. While stores typically are not niche oriented enough, your niche can be too small. It would be much more difficult to locate your niche customer if you were planning on a routine product. Everyone needs a bucket, but most customers do not buy it very often, or with a lot of thought. Here, your niche might be too narrow or too small or lot a niche at all. Your niche customers must be willing to spend money, and so can target a specific group of customers and offer them your new niche.
Besides, there should always be scope for the niche segment to expand. A niche must be active enough that new products are being created for it. If you are looking at a niche that hasn’t seen a new product in the last 5 years, you’re looking at a niche market that is pretty much over. A profitable niche will contain products that continue to evolve. Along the same line, the demand in your niche must be growing. If demand in your niche isn’t growing, you’ll quickly hit a dead-end with your profits.
You’re going to need to do some research first and foremost.
Focussing on more than one niche is a great thing to do. Just do them well and then adjust your advertising and marketing to fit these various segments. The customer ultimately must understand what your store is all about, so try to keep them logically related if at all possible.
Questions To Help Find a Niche
1. Your niche might be nothing more than being all-inclusive and in depth than anyone else. Your niche might be nothing more than you’re the only store that has a fantastic warranty behind everything you sell. It doesn’t have to be a new category of products.
2. Do I have a unique product category or niche that needs to be emphasized?
3. Can my niche take-in leasing or loaning out the product?
4. Can I use atmospherics and basic senses to better define my niche?
5. Could my niche be replacement or total repair of my products?
6. Could my niche include customized or handmade products?
7. Ask current suppliers finding a niche opportunity too?
8. What area or category of my business I feel is the most exciting?
9. Could my niche take in homegrown, or home baked?
10. What area or category of my product or service I feel is boring?
11. Could shipping or delivery become integral to my niche?
12. Ask customers what they’re not finding at your competitors or even you’re own retail that they’d like to see more of.
13. Is there a leading aesthetic appeal in your product category? Does your assortment have a similar style to just about everything else on the market? Consider finding the dominant style in your niche, and do the opposite.
14. Can I do something different with my products by creating a unique atmosphere, story, or tie-ins with what I already sell.
Where To Look For Your Niche Customers
Work to learn everything you can about that customer: What motivates them? Is price important to them? What makes them smile? How do they decide to buy?
1. Organizations and associations and meet-up groups.
2. Special online blogs, communities and groups.
3. Direct mail lists
4. Yellow Page advertising
5. Local clubs and meetings
6. Specialty magazines and newsletters
7. Trade shows
8. Internet communities
Where does your niche customer go for shopping, entertainment, office, further education, etc.? Also consider working with another large well-known company that already offers some related services or products your target group buys. You may be able to offer up your services or products to their customers.