How to choose a niche for an online store

[CUK77]

Choosing a niche is a key step when starting an online store. Even if in the future you plan to launch a marketplace with dozens of product categories, it is better to start with a niche online store and gradually expand your business. Why it is so important to choose a niche and what needs to be done for this - we will tell you in our article.

Benefits of a niche online store​

A niche is a narrow market segment with unique characteristics that differentiate it from other segments. For example, the women's clothing market includes dozens of niches: down jackets, evening dresses, T-shirts made from natural fabrics, business suits, accessories, etc. Any large market can be divided into narrow segments according to different criteria:

• price - luxury, middle and mass market;
• quality - premium, economy;
• geography - city, region, country, region;
• demographic characteristics - gender, age, income, education;
• psychological characteristics of the audience - values, interests, hobbies.

Niche online retailers have three main advantages.

1. High ROMI. This is the return on marketing investment. By working in a narrow niche, you don't have to spend huge advertising budgets competing with competitors for the attention of potential buyers. Marketing niche products through SEO, PPC or influencer marketing gives you direct access to your target audience.
2. Loyal audience. If your product meets specific needs and solves customer problems, it is likely that they will come to your online store for repeat purchases. In addition, satisfied customers act as brand advocates.
3. Low competition. Depending on the niche you choose, you may have one or two direct competitors or only indirect ones - large stores that sell your product categories. The narrower the niche, the lower the competition in it.

Stages of choosing a niche​

Think what you like

Make a list of what you like and what you are good at. The logic is simple: in order to build a successful business, an entrepreneur needs to invest a lot of time and effort in it. And if you are not interested in the chosen niche, then soon the motivation to develop your business will disappear.

Another argument in favor of the “do what you like” principle is expertise. For example, if you have been cycling tourism for a long time, you will be able to offer your audience the very best bicycles, ammunition and accessories, tested from personal experience.

Explore trends​

Google Trends is a tool that shows statistics for queries over a certain period. It helps to determine which categories and specific products are in demand from the audience. Google Trends allows you to specify the following search criteria:

• geography - the whole world or one country;
• time - select an option from the list or specify the period manually;
• category and subcategory.

In addition, the tool shows statistics by sub-region, suggests similar and related queries, and allows you to compare multiple queries.

Social networks, as well as the English-language resources Trend Watching and Trend Hunter, dedicated to consumer trends, will help you keep abreast of global trends. And what is best sold in Ukraine, you can find out from statistics from major market players.

Determine the needs of your target audience​

Working in a narrow niche, it is not difficult to define your target audience. For example, if you sell food for exotic animals, your audience is the owners of those very animals, breeders, zoos, pet stores, etc.

To better understand the habits, needs and expectations of your customers, use social networks, thematic sites and forums. If possible, conduct surveys, questionnaires or communicate with representatives of the target audience in person, for example at industry exhibitions.

Suggest a solution to the problem​

Let's take an example: you sell rare varieties of tea and have already gathered a loyal audience of fans of this drink. But even a regular customer, if he suddenly runs out of tea at home, can go to the nearest supermarket, because he has no time to place an order on the website and wait for delivery.

A possible solution to the problem is a monthly distribution of exclusive teas. As a result, a person will be happy that there is one less problem in his life, and you will keep a loyal customer.

Research your competitors​

An analysis of competitors will show you how to adjust the assortment - expand or narrow it, and also help you understand what to focus on when promoting your store.
You can search for competitors through search engines, marketplaces and social networks. To organize your information, create a spreadsheet and divide your competitors into three categories:

• direct - they are guided by your target audience and have a similar range of products;
• indirect - they focus on your target audience, but sell other goods;
• potential - can become your direct or indirect competitors if you expand the range.

In addition, add useful information about your competitors to the table: catalog content, additional sales channels, strengths and weaknesses, contacts, etc.

Rate your chosen niche​

Start by promoting multiple products using the most accessible channels - social media and contextual advertising. Get a response from the first buyers, you can also send your product for review to bloggers - opinion leaders. Feedback will help you decide what to do next: continue working in the chosen direction or look for another niche for online business.

Conclusions​

1. The advantages of a niche online store are high ROMI, low competition and loyal audience.
2. Start your niche search by looking at what you love and are good at.
3. Google Trends is an affordable service for analyzing the demand for specific products and categories. Additional tools for researching trends - social networks, specialized resources and statistics from major market players.
4. To build a loyal customer base, research their needs. Your products should solve the problems of your target audience.
5. Competitor analysis will show you how to adjust the assortment and help you understand what to focus on when promoting your store.
6. Before starting a vigorous business, test your chosen niche. Run multiple ad campaigns and collect feedback from your audience.

 

[flinnjojo]

wow, thank you for this information

 

[sallyfrosty]

I was looking for such a piece of brief information on this topic, thank you. So far, I'm just thinking about opening my online store, but it seems to me that all my skills in this area are not good enough. I've already decided what exactly I'm going to sell, but so far, it's hard for me just close my eyes to all my problems and start doing at least something. At the moment, it seems to me that I cannot cope with advertising, since I am very bad at writing text and I am not good at describing anything well. I found the article https://www.sitecentre.com.au/blog/content-writing-for-ecommerce-products which, in theory, should help me with this, but I'm still afraid to take the first step. Do you have any thoughts on how to overcome this fear of the first step?