When it comes to the success of e-commerce companies, one term used as the main success factor: the right niche. No wonder. In online retail, those who find a lucrative niche can differentiate themselves skillfully from their competitors. Through their product offerings and editorial content, they can win new customers.
Retailers are only able to succeed with highly specialized webshops if they keep an eye on the customer. In today's e-commerce world, it is more important than ever to find the perfect niche for yourself if you want to succeed. Retailers have the opportunity to differentiate themselves by offering online offers with a special sub-range. Having a clear shop profile and a distinct selling point can make them stand out from the crowd.
Alternatively, online retailers can present themselves as experts on a particular product or service through niche offerings. The owner of a shop may, for example, publish editorial content to attract customers. These customers are being targeted and offered added value, for example, explanations of frequently asked questions.
An online retailer can therefore specialize in spare parts for appliances and equipment, for example. Then they can publish guides for consumers who want to exchange individual parts. Because whoever is interested in spare parts as a customer is in most cases in a situation in which online advisors are helpful. If you are looking for happiness in the e-commerce niche, you can score points with customers not only with editorial content. There are also other reasons for focusing on a sub-range:
- No or less competition: If you have a unique offer, you ideally have to put less effort into marketing. If the target group is looking for suitable articles, you may be found instead of having to attract the customers' favour. Of course, you cannot do without marketing measures in the long term. Because you have to make a shop brand known in the niche yourself in order to create customer confidence in your own offer. But if there are fewer competitors or comparable shopping offers, you don't have to drum so loudly to attract attention.
- Greatly simplified SEO: In e-commerce, in particular, it is very important to be found by interested customers. Therefore it has become an eternal struggle to outdo the competition. Especially with all measures that improve the visibility and positioning in search engines for certain keywords. On the other hand, if, in the best-case scenario, you are the only provider in your niche, it is easier to achieve a good ranking on Google. But that only helps if potential customers are looking for a suitable offer on the Internet on their own initiative.
- No price war: They are at the top of current price comparison portals and undercut the big players in terms of the total price. Although they also eliminate shipping costs almost flat-rate – this is of course very difficult. But if no one else offers the same products, this burden disappears. In addition, you can charge higher prices for products that cannot be directly compared with other items. And thus increase the margin in the e-commerce business.
- Many opportunities, for example, to establish yourself as an expert. If the unique selling point in the niche ensures that the offer is going well, you can devote more time and energy to other measures for setting up your own online shop. This makes building a real community and offering more content easier. And this means that you can grow into an expert portal for the respective topic. In the best-case scenario, this, in turn, creates attractive incentives for (new) customers to visit a portal again and again. Without having to lure these customers into the online shop via expensive marketing or discounts.
So much for the theory. Experience has shown that it is difficult for online retailers to find and occupy the right niche for themselves. But that is often not easy in e-commerce practice. An important detail that often falls under the table. Not all products are equally suitable for the booming e-commerce business. Or to put it better: customers are not always ready to suddenly order a certain product on the Internet. Instead of continuing to buy the item in a retail store as usual. You should also look at a technology strategy for ecommerce. This will assist you with going forward.
Examples to look at
The best example is likely to be Amazon Fresh. This service from the gigantic online retailer makes it possible – so far as a test in a few cities – to order groceries at fair prices right to your doorstep – including vegetables, baked goods and fish. But although Amazon is a big player behind this service, the market does not yet seem ripe for eFood. Apparently, only a few Internet users can get used to the idea of getting fresh food – which is perishable and which in some cases requires refrigeration – from the Internet. So far, only 4.2 percent of Amazon customers are sure that they want to use this service once. 69 percent of those questioned are even negative about the idea.
This is in extreme contrast to the success that Amazon initially had as an online bookseller. This is exactly the difference that needs to be taken into account. Ordering a book has always been quick – even before the Internet, booksellers often had a specific book in the store the next day after ordering thanks to the ISBN number and intermediaries. But despite this simplicity and speed, this required a comparatively large amount of effort: As a customer, you first had to go to the store to order and then a second time to pick it up. Amazon took advantage of this disadvantage of brick-and-mortar retail and positioned home delivery as a bonus.
Why do a large number of customers buy on the Internet?
Those who do not follow this trend today and continue to sell their products in the traditional way will probably not be able to keep up in the long run. You will lose your customers to the competition. “We are experiencing a paradigm shift in retail more and more. For decades he tried to educate customers to follow him – right up to the big shopping malls in front of the city and the outlet centers. Now the customer turns the tables and decides for themself when and how to get information and buy,” says Oliver Prothmann, President of the Federal Association of Online Retailers (BVOH).
But what are the advantages of online trading for customers?
Flexibility – Everyone can order their goods anytime and anywhere. That fits into today's everyday life all the better since almost everyone has a smartphone and is online around the clock. In addition, there is the independence of opening times. For the rural population, it is more interesting to shop on the Internet, as there are fewer opportunities to shop locally.
Transparency – The rating systems in which customers can give their opinion on the product quality mean that more and more e-commerce shops are offered. In this way, the customer can compare the quality of different products.
Information – Well-made online shops offer the customer useful product descriptions, which he can read through in peace on the sofa or in the café. This means that he can make his purchase decisions independently and without time pressure and is well-informed.
Greater Choice – The Internet is increasing the number of products and choices so customers can choose from a wide variety of offers.
Time savings – ordered today, delivered tomorrow. E-commerce business scores with the speed of delivery and the customer save time in the purchasing process. Long queues at the cash registers, traffic jams on the way into the city, overcrowded shops, especially on weekends or after work. These are all a thing of the past.
Discounts – Additional discounts or bonus programs, which are often offered in online retail, are important for 31 percent of Internet users. Bonus programs are particularly popular with so-called “smart natives” (young people born into the digital world between the ages of 20-25).
Multichannel sales through online trading
A good mix of different sales markets seems to be the trump card here. A company that offers its customers both brick-and-mortar retail and e-commerce can reach a higher number of customers. This is achieved through this multichannel distribution. Nowadays, many companies take advantage of the opportunity to continue to operate brick-and-mortar retail. But also to offer goods via the Internet. Let us know via your own shops or other marketplaces on the Internet such as Amazon, Zalando or eBay. Marketplaces such as Amazon or eBay now account for half of the total online sales.
So if you are considering looking at finding your own niche and starting your own business, just know that it is certainly possible. You should look at the technology and advertising that you may need to look into first. Keep your business secure with good cyber security and of course look at researching everything! A good business begins with great planning, otherwise, an idea can fall flat. The power is in your hands – so good luck!
