Find your shop’s niche

After you’ve determined your shop’s mission, you should focus on finding the right niche for your (online) business. Merriam Webster defines a niche as “the situation in which a business’s products or services can succeed by being sold to a particular kind or group of people”. If you have found your niche, your products, sales, communication and marketing can be optimized to target that specific group’s needs and wishes. In this post, we’ll try to help you find your shop’s niche. We’ll go into the two most important pillars of your niche: your product and your customer.

find your shop's niche

Who is your customer?

If you want to determine who your customer is, it might help to determine a number of buyer types. Buyer types help you realize there’s probably not just one customer profile for your website. I can relate to a study about buyer types (partially funded by Carnegie Mellon and the Russell Sage Foundation) that divides your customers into three main groups:

  • Unconflicted, also called the Average Spenders. The majority of buyers (61% according to the study). A group of buyers that make common, logical buying decisions and that care about value-based pricing. “I need something, where can I find the best buy with the best reviews for the company and product.”
  • Spendthrifts (15%). A small group of rather uncontrolled buyers. “I want it now, even though I don’t really need it right now.” This group will be triggered by premium products and cares less about the price. This group is more than other groups triggered by scarcity, for instance.
  • Tightwads (24%). You’ll need to work hard to convince this buyer to purchase your products. They’ll do more research, need more details. More than the other groups, this is the type of buyer that will highly value a proper blog on your website.

This is a very rough division of customers. Of course your (potential) customers have many more characteristic. Marieke wrote a post about getting to know your audience that might help you with analyzing your existing online audience.

Besides that, I think we can be all of these three customers mentioned above. It just depends on the type of product you want to buy online, and perhaps even the amount of money we’ve reserved for this specific purchase. The tough job for you as an online shop owner is to send the right triggers to the right person at the right time. Just thinking about how to do this will narrow your niche. I’d like to add an extra question to that: what’s your product?

What’s your product?

It might seem silly to ask yourself what your product is. However, it’s important to know your product (and its users) to be able to find and narrow down your niche. If you’re an online art shop, the world is your competition. If your online goal is to rank for ‘art’, stop dreaming and get to work. You need to focus on long-tail keywords, so to say. Your niche is described by your product and a number of limitations or perhaps better: specifications.

B2C or B2B?

Are you (mainly) selling to end-users or other businesses? You might have expected that question under ‘Who is your customer”, but I beg to differ. When you start your business, you unconsciously think about selling B2C (business to consumer) or B2B (business to business). I think that in most cases the decision B2C or B2B isn’t made in a business plan. Your business grew in a certain direction because of other choices you’ve made:

  • What is my main product?
  • What other products relate to that?
  • Do all these products fit a certain product group/assortment?
  • Does it pay off to invest in the option to sell more related products?

Does it matter if your customer is a business or a consumer? Obviously, there are differences between the two. Consumers require other care than businesses:

Businesses will come to your site, order and go. The reason could be that you are the cheapest one for that specific product in Google Shopping. I think most B2B customers will be in the Unconflicted group, mentioned above.

Consumers, on the other hand, want to experience your company and products. There will be more emotional buying in that group, which aligns more with the Tightwads group. This obviously depends on the product you are selling.

Is it possible to serve both B2C and B2B customers? Most definitely. Example: we sell plugins. A consumer will purchase one, a business might want to buy several to use for their clients. That is why we offer bulk prices. We know we serve both groups.

Finding your niche

Now that we’ve given you some food for thought on your customers and your product, let’s determine your niche. This process aligns nicely with the process of finding long tail keywords. Let me repeat the definition of a niche: “the situation in which a business’s products or services can succeed by being sold to a particular kind or group of people”.

In case of a luxury pen shop, that could mean the shop’s niche is ‘luxury fountain pens for people that live in the Netherlands and are willing to spend an extra buck for quality and extra service’.

I trust this way of specifying your niche has got you thinking about your own niche.

Your niche evolves

One last thing about niches: they evolve. Or perhaps I should say your business evolves, and that might alter your niche. If you sell fountain pens and find that a lot of people buy a certain brand, you might open a brand specific online shop. This could also work the other way around: if you expand to a certain niche and purchase a company (or domain name) in that niche, you could consider merging it into your main website and/or maintaining the specialized online shop.
The evolution of your niche could, or perhaps I should say should, be a continuous process. Be sure to monitor that evolution.

Read more: ‘Analyzing your audience’ »

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