How to Find Your Customer Niche and Dig In

There’s something to be said for ecommerce businesses that can hone in on a single idea and capitalize on it to perfection.

As massive marketplaces like Amazon and eBay continue to dominate the ecommerce industry in the United States, there’s been a backlash of smaller, niche online stores trying to provide something completely different. They’re offering buyers focused, curated, and high-quality products that serve a small and specific customer niche.

It may seem risky, but for those who do zero in on a narrow market and target their specific buyers effectively, the rewards can be huge—especially in an industry that’s being underserved by larger brands.

So what’s the key to finding the right niche in the marketplace? And once you do, how can you build an online marketing strategy that sustains a business from such a small set of buyers? Never fear, because we’re about to answer all of your pressing questions and show you why niche marketing doesn’t have to be intimidating.

Defining the terms of ecommerce niche marketing

First, a little bit about what makes a customer niche, well, a niche. In ecommerce, niches are subcategories of broader markets that come with a smaller, though no less important, set of needs.

For example, there are plenty of meal kit delivery services available to consumers today. Say you were to start an ecommerce business that focused solely on ready-to-bake cinnamon rolls of all shapes and sizes (a guy can dream, OK?). Voila! Your newly founded company now comprises a niche market within the larger meal kit delivery industry.

Take Butcher Box, for example, which has staked its claim among other online businesses by delivering carefully prepared, high-quality meats. They’re not concerned with dabbling in other types of food product offerings. Instead, they’re dedicated to delivering on their promise to make meat delivery the cornerstone of their business model.

Butcher Box

Of course, once you make the decision to focus on a niche product category, your target audience will be smaller. Vegetarians will probably steer clear of Butcher Box, and that’s OK! For online stores like Butcher Box, there’s a surprising upside in paring down the list of potential customers. Since your target market is tinier, you can focus more intensely on marketing exactly to that group and making your message highly personalized. In turn, your buyers are more likely to latch onto your ideas and be completely invested in what you’re producing. Soon, you’ll be moving on from passive consumers and cultivating a loyal and ardent fan base that follows your every move.

It’s all about positioning

Another upside of ecommerce niches? Your expertise can make you the go-to source for all things related to your specific product, allowing you to position yourself as a leader in the market.

One company that’s carving out its niche thanks to memorable positioning is Ollie, a dog food supplier that’s far from the average chow you pick up at Petco. Ollie knows you want the best for your pup, which is why they customize pet food to match your dog’s particular needs. In a market where most dog food brands don’t take the time to get to know Fido from Spot, Ollie promises something altogether different in the pet food market—and it’s obvious from the moment you land on their homepage.

Ollie positioning

With an emphasis on personalization and customization (the “Design Your Dog’s Meal” CTA emphasizes that your dog is one-of-a-kind), Ollie caters to a target audience that’s looking for an alternative solution to the mega-brands that would never create a custom profile of your dog… and yes, that’s a thing you can do on their site.

Ollie delivers a niche customer experience that makes each customer and their dog feel special, while at the same time making it clear that their target audience isn’t the casual dog owner. If you’ve signed up for Ollie, chances are pretty high that you’re serious about your dog and its health, and the messaging makes this loud and clear. After all, their “About Us” page is literally a love letter to dogs, so you know what you’re in for from the get-go.

This is another key point to understand about niche audiences. They’re not just signing up for kicks—they want a high-quality experience that your brand alone can give them.

Providing a curated experience to stand out

Earlier this year, we spoke with Melanie Travers, CEO and Founder of Andie Swim. Melanie saw a huge opportunity in the women’s clothing industry and decided to build her company around a single, specific product: the one-piece swimsuit. For Melanie, the idea of serving a smaller audience was always a driving force behind starting her small business.

“Generally, my hypothesis around ecommerce is that it’s better to be deep and narrow, rather than broad and shallow,” she said. “If you’re broad, you set yourself up to compete with an Amazon, whereas if you go just deep and narrow and curated, then you’re providing a different value proposition.”

Just as Melanie identified a niche gap in the market when she was unable to find a simple one-piece suit, the best niche brands find success by doing the exact opposite of what other online stores are doing. Massive brands can only recommend one of many interchangeable products, which makes it harder for them to understand your preferences as a consumer. Amazon and eBay may be able to provide you with customized recommendations based on your past search and purchase history, but that can only go so far in getting to know the real you.

One ecommerce niche to rule them all

Still, there are things to be wary of when choosing your niche market. You don’t want to come up with a product idea that’s too out there. For instance, we’re guessing there isn’t a sustainable target audience for an anchovy-focused meal delivery kit, although we might be tempted to sign up just for the peculiarity of it. Ultimately, the market for that idea is just too small to build a viable, long-term business.

There’s also the question of knowing if and when you should expand your ecommerce store to include other types of product offerings. Are you potentially missing out on a bigger opportunity—remember when Netflix only existed to deliver DVDs to your house?—or would taking a risk to appeal to a larger target audience ultimately lead to a failed business model? Not to mention the ever-lingering uncertainty of “here today, gone tomorrow.” Will your ecommerce business be able to sustain consistent growth for years to come, or is it just a passing fad (a moment of silence for all of those misguided cupcake ventures circa 2011)?

But even with these potential downsides, there’s no denying the effectiveness of targeting a niche market when implemented and executed carefully. When you find an idea that’s being underserved and can turn it into a business model that caters to a passionate subset of potential customers, there’s little to keep you from attaining ecommerce marketing stardom.

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