Whether you agree or disagree, COVID has altered the brick-and-mortar retail scene. With bankruptcies on the rise, the transition to e-commerce is skyrocketing.
Further, more conventional merchants are venturing online, and the competitive environment of product discovery is growing more crowded. Starting an e-commerce business takes more than setting up your first website. Today, e-commerce must contend with the following:
Options-saturated product marketplaces
Amazon's infrastructure and integration capabilities reshaping the industry.
Competing with complimentary two-day and, in some instances, same-day delivery
However, there are additional methods to make an effect that may assist you in surviving an increasingly competitive environment, including branding, logo design, online design, and even post-purchase experiences such as order fulfillment efficiency and the unpacking experience. In this blog post, I’ll be discussing the most vital first step: Choosing a profitable e-commerce niche for 2022.
What is an e-commerce niche?
To put it simply, a niche is about concentrating on a single topic or specialty. Also, an e-commerce business will have the potential to expand more quickly if you can offer unmatched experience or selection in that particular field or market.
In a nutshell, an e-commerce niche market is a highly specialized sector. For instance, some people collect Grogu dolls (The Mandalorian). Grogu dolls and related accessories are a niche market, as are certain types of watches, a particular sports team, and even Apple products.
Thus, to enter a niche market, all you have to do is identify a targeted market—the more concentrated your efforts, the better. The more you define your e-commerce niche, the more narrowly you can target your ideal consumer base.
A nationwide supermarket chain, for example, is a vast niche. On the other hand, an organic grocery shop is more specialized, and one that offers solely fresh, organic soups and deli items are even more specialized. The more precise your specialty, the more targeted it is.
Generally, a specialty organic soup and deli market will have fewer consumers than a huge conventional grocery shop. Nonetheless, you benefit from a more devoted and dedicated consumer base. With an in-demand niche, you can further refine your sales tactics. Why is this important? Well, you now need to market to a single sort of consumer, rather than trying to please the masses. Undoubtedly, most e-commerce sites cannot be an Amazon or a Walmart.
Three essential reasons why you should choose the right niche
There are millions of e-commerce sites selling various things online. With so much competition, it might be challenging to stand out from your competitors. Consider the following reasons why the right niche is the optimal choice:
Unless you are fortunate, creative, and intellectual enough to build a niche that no one else can equal, you should identify a strategy to differentiate your brand/s.
Managing a storage space for a massive amount of e-commerce goods is both time-consuming and expensive.
Even more confusing, the more things you manage, the more area is consumed, and thus, more money is spent on storage. To compound things, certain goods require additional storage.
By focusing on one niche per e-commerce site you run, you can spend less on storage and inventory because, rather than storing hundreds of things, some of which sit for months, if not years, you can focus on a few high-volume items, making it easier to manage a smaller storage area and other inventory-related expenditures.
Of course, there’s always drop shipping. While drop shipping is a competitive market, it is also relatively simple to configure. That is part of what contributes to its saturation. Hence, finding an e-commerce niche enables you to break through a congested ocean, attracting and retaining a more targeted demographic of customers.
Invariably, your customers will place a higher premium on a specialist over a generalist.
The right e-commerce niche can also significantly enhance your long-term success if people regard you as an industry expert capable of delivering one item superior to someone who can supply a variety of services with a lesser degree of attention and quality.
Attract prospects who are ready to make a purchase
Setting up a distinct e-commerce niche enables clients to have a deeper understanding of the products and services offered by your business. Often, buyers who land on your website are already looking for a product comparable to what you provide that fits their demands and budget. Instead of attempting to appeal to a broad audience, choose niche products for which members of a target demographic would want.
Plus, a specialization can increase ad expenditure by targeting more specific demographics, resulting in a greater conversion rate.
Once you've identified your target audience, you can start to expand your product offering by concentrating on what your customers want. Now, let’s move on to what may be the top niches for 2022.
Lucrative e-commerce niches for 2022
Home office equipment
Since the first COVID-19 lock downs were implemented in early 2020, the market for home office equipment has expanded. It should come as no surprise that this e-commerce segment is growing. Even when many employees return to work, an increasing number of people continue to work from home. Individuals who work from home require a home office and resources for their workspace.
Office chairs, in particular, are gaining popularity. The old, generic chair was OK for an hour or two of work a day, or perhaps a half-day of work on the weekend, but these types of seats are just not up to the task of full-time use.
Moreover, individuals are abandoning traditional workplace settings. Remote work is on the rise. With the popularity of standing desks and other modifications and the ongoing need for paper, pens, and calendars, there is a large upside for recurring purchases, whether it is B2B, B2C, or B2B2C.
Home entertainment
The home entertainment industry is constantly expanding. With Netflix, Disney+, Hulu, and other streaming services now bringing certain upcoming blockbusters directly to the television, an ever-increasing number of consumers are investing in home entertainment. In fact, online movie streaming services have already exceeded one billion downloads.
Simultaneously, PC and mobile gaming are growing in popularity. And it does not end there. Subscriptions to e-books have gone up, as well. And, don’t forget streaming music services like Pandora and Spotify.
So, these products would include anything that relates to and enhances home entertainment. Not to mention, home entertainment is a critical niche for offering specialty products. Plus, you can satisfy home entertainment demands by selling audio equipment, gaming accessories, or related furnishings.
Home-based fitness and gym equipment
For many people, going to the gym is not always so straightforward even if it should be. Still, it’s crucial to exercise consistently. When combined with higher gym membership prices and the requirement for social distancing in some locales, the ability to utilize the right workout equipment becomes more difficult to come by. Due to these types of evolving hurdles and more, many people prefer to purchase gym and exercise equipment for their homes.
Even if all gyms are fully reopened, people will continue to be concerned about hygiene, and those who have already invested in home gyms will want to maintain them.
Home improvement and do-it-yourself
You may have noticed a pattern here. Individuals are spending more time at home. Naturally, this results in more time spent on house repairs, do-it-yourself projects, and crafts.
Tools, hardware, and even items like paint, paintbrushes, and other materials are gaining popularity and a devoted following. It’s certainly something to consider.
Cosmetics
Beauty items have long been a remunerative e-commerce business. BowTiedBull has mentioned this money-making niche several times. The beauty and personal care market grew from $483 billion in 2020 to $511 billion in 2021. It's also expected to reach $784.6 billion in sales, as a sector, by 2025.
Besides, the latest beauty advances are driving the trends. Anti-aging, plumping, and brightening creams and serums and detangling hair brushes are pretty popular currently.
Further, cruelty-free cosmetics have seen rising demand. The more highly-focused, the better.
Items for the home
Household products may be a lucrative sector for e-commerce. To illustrate, your e-commerce niche might concentrate on kitchen and bath items, or you can narrow it down to just sleep products. You may shrink your niche even more by offering only custom pillowcases.
Culinary shop
We are spending a lot more time at home working, socializing, and, of course, cooking. Even as restaurants are reopening, staffing concerns persist, and many people are unwilling to dine out at a noisy and crowded restaurant with long wait times.
Add to that the fact that food has evolved into a type of entertainment in and of itself. Many are developing and presenting food and beverages in novel ways. People are no longer content with a glass of orange juice but rather a mimosa or an artisanal-crafted pomegranate juice mocktail!
Pinpoint your target audience
Before selecting your niche for 2022, you should engage in market research. Not only must you determine whether there is a market for your product/s, but also whether there is an unmet need that no one else is filling, and, of course, it must be profitable.
Understand what you need to do to acquire new customers consistently
Generating hyper-targeted advertisements is no longer sufficient. As a result, many e-commerce specialty sites are shifting their promotional strategy to include discounts and free delivery. Other retailers emphasize simple return policies, and multiple payment options including using a gateway like Affirm that allows customers to receive an item and pay it off in monthly installments.
Key takeaways
It is more critical than ever for your e-commerce site to have a distinct identity. Unquestionably, this should be high priority.
Operating in a niche has several advantages, including more straightforward advertising and marketing, less inventory, and fewer market research costs. Being viewed as an expert also gives you an advantage. Occasionally, you may even use it to justify increased costs–no one else offers the in-demand specialty items that you sell.
Whatever you do, consider your e-commerce niche carefully. Then choose one eye-catching stand-out product to attract attention and a sequence of others to complement it. After that, sit back and watch your sales go through the roof.
Of course, there are many other niches to choose from, but I hope the ones listed above give you a better idea of what direction you want to take. It’s all about finding a target demographic who want to buy your specialty products.
Culinary Shop, y'say? Great article... and list of niches for starting out! 🔥
How do you find enough volume of customers (small market, low income country, not in US), gdp/capita around $5k pa.?