Product Selection Strategy: Five Ways to Find a Niche Market

If you rack your brains and still don’t know what product to start with, it’s better to look for it in the niche market. There are many niche products on the market, and they can be further divided. The key is to make sure that you can control the niche market and that there are enough active audiences in the niche market.

In this article, we will mainly explain to sellers what a niche market is and how to find a niche market yourself.

A niche market is a part of the market that has unique consumer needs, preferences, and characteristics and is recognized by consumers.

For example, in the large market of women's shoes, non-animal fur women's shoes, large-size shoes, nurse shoes, and shoes for transgender people are all niche markets . In other words, niche markets are more special and more segmented markets.

Almost every market can be further refined or differentiated based on specific needs and preferences. Determining whether a market is a niche can usually be determined by the following points:

• Price (luxury, mid-range, discount)

• Consumer characteristics (gender, age, income level, education level)

• Quality (high quality, handmade, economical packaging)

• Psychology (values, interests, attitudes)

• Geographical characteristics (the population of a country, city, or even a community)

By focusing on a niche market, you can better serve a specific consumer group, and competition will not be as fierce compared to a large market.

If you already have some trending products in mind, you can start with the niche market and dig deep into niche products that have market demand. Below, we will look at how others found the niche market and how you can find the niche market yourself.

Sustainability has become a hot topic among consumers recently. According to a survey by Nielsen, a world-renowned market monitoring company, 48% of American consumers said that they would probably or definitely change their consumption habits if they could reduce harm to the environment. The rise of these thoughtful and aware consumers has paved the way for cruelty-free, animal testing-free, and environmentally friendly products. If there is a product that is frequently purchased in the mass market, it is likely that there is a niche market within it - a market where consumers prefer green and environmentally friendly products.

Most consumers today care about where products come from and how they are made. Therefore, the brand Bee's Wrap is trying to replace traditional plastic packaging with eco-friendly packaging made of beeswax. This is not only environmentally friendly, but also more economical for consumers because the eco-friendly packaging bags are reusable.

More product ideas examples:

• Reusable straws

• Cruelty-free cosmetics

• Clothing made from non-animal fur

• Menstrual Cup

In the United States alone, total spending in the pet industry is expected to reach $75.38 billion in 2019. Within this market, there are many opportunities to develop niches, ranging from pet breeds to owner styles.

Example: Patricia's Couture has carved out a niche in this market. They sell customizable robes, pillows, pajamas, blankets, and other items that can be covered with pictures of your pets.

Although most people keep fish, cats, and dogs as pets, some people keep more unique pets such as horses, lizards, turtles, etc. Some people even keep chickens as pets. These pet niche markets can be considered.

More niche product ideas:

• Pet monitoring camera that can monitor and interact with your pet while you are away

• Pet Tracker

• Customizable products with pet photos

• Natural Pet Food & Treats

• Pet accessories and clothing

The LGBTQ+ community is large, and the rainbow is their signature color. They are relatively small, have unique needs, and therefore have unique consumption habits.

According to market research firm Nielsen, they shop 10% more frequently than the average American consumer and are willing to spend 7% more.

Example : Tomboy X, an underwear brand, started in this market. It started as a T-shirt brand, but its founders saw an opportunity to cater to a specific consumer group, namely, to make underwear suitable for the LGBTQ community.

More niche product ideas:

• Makeup designed for specific skin types

• Products that evoke group consciousness

• Clothing tailored to specific body types

In 2018, sales in the travel industry grew by more than 10%, totaling $694.41 billion. Coupled with the lower cost of air travel over the past 30 years, consumers' attitudes toward travel are also changing. They are becoming more environmentally conscious. According to data from travel e-commerce company Booking.com, more than half of people want to choose environmentally friendly accommodation, but it is difficult to find.

This gap in demand presents a huge opportunity for brands to start offering eco-friendly products. Travelers want more than just “green” products. They want to authentically experience local customs and plan long-term trips.

According to CNN, by 2020, nearly half of the workforce in the UK and the US will be self-employed, and at least 40% more children will be educated at home in 2017 than in 2014. This means more people will travel, and the travel time will be longer, especially for remote workers.

Example: Nomatic is a travel luggage brand that focuses on practicality. You can see their focus on the audience reflected in everything from their products to their copywriting and business as a whole.

More niche product ideas:

• Providing Smartphone Accessories to Travel Bloggers

• A practical and comfortable sports and leisure bag for frequent flyers

• Handheld maps for those who like to collect travel experiences

Gamer is a general term that includes mobile gamers, PC gamers, console gamers, desktop gamers, etc. There are more than 2.3 billion active gamers in the world, and nearly half of them spend money on their hobby. The total value of the gaming industry in 2018 was $137.9 billion.

So Shazim Mohammad opened an online store, Glorious PC Gaming Race , which specializes in products for computer gamers. Today, the store has an annual revenue of millions.

Mobile games, in particular, account for 91% of the market. In addition, there are more female players in the market, and this trend is still rising. Even within the mobile game category, you can also segment according to popular types (such as first-person shooters) or consoles (such as Nintendo consoles).

More niche product ideas:

• Provide user-friendly products for long-term gaming (such as controllers, gaming chairs, and blue light blocking glasses)

• Personalized decoration of game controllers, etc.

• Game Culture T-Shirt

• Provide mobile phone accessories for mobile game players

Home ownership is changing, and the percentage of the general public who own a home in the U.S. is declining. There are many reasons for this, including rising costs of living and wages not keeping up.

In addition, the definition of a landlord has also changed. With the emergence of Airbnb and VRBO home-sharing services, houses are more often used for shared rentals and investments to generate passive income.

August has seized the trend and provided corresponding services to landlords, launching keyless door locks and security monitoring products. One of the main features is Guest access, which allows landlords to set curfew times for tenants.

More niche product ideas:

• Home security cameras (home, doorbells, smart home devices, etc.)

• Furniture/Home Decor for Small Apartments

• Furniture for rental (such as blinds that don’t require drilling)

The rise of remote work can be largely attributed to two factors: the emergence of more freelancers and more companies accepting distributed teams.

There are many reasons for this. First, remote workers can improve job satisfaction and productivity. Employees are also more engaged and twice as likely to work more than 40 hours a week. Self-employed people often want more freedom and harmony between life and family.

So Freelancer At Work launched a service that caters to this niche, selling laptop stickers so remote workers can advertise their specialties at any time.

Keeping in mind the goals and lifestyles of these remote workers can help you come up with product ideas that fulfill their needs and those of their employers.

More niche product ideas:

• Desk ornaments/decorations

• Home Office Area Decoration

• Laptop accessories for those who like to work in a cafe

Even the world's largest brands market and advertise locally. They compete to win local customers to support local business.

But if you only sell online, it can be difficult to establish a local presence. However, eCommerce sellers can build their business by considering their city or country as a niche market.

For example, the clothing company Peace Collective was founded in Toronto, but the brand has expanded to appeal to all Canadians and fans of various NBA teams.

More niche product ideas:

• T-shirts with slogans about specific cultures or cities

• A pattern or photo album of a certain city landscape

Niche market ⊆ big market. Whether you are a novice or an experienced seller, you should start with the big market and then slowly dig deeper into the niche categories when selecting products. This will help:

• Determine product segment characteristics

• Understand product price range

• Control production quality

• Determine brand positioning

• Formulate corresponding marketing strategies

Choose a niche that gives you a competitive advantage from the start. If you choose a category or market where there are many sellers, you will face a "battle". Focusing on a niche market will help you avoid this "battle". This does not mean that you have to sell completely different products, but focus on more special products in the market.

There is no single way to find a niche, but here are a few ways to find a niche:

1) Use Google Search

The best way to select products is to refer to what categories other sellers are selling, or what consumer groups they are selling to. So how can you get references?

Sellers are advised to use Google to search.

For example, if you search for cruelty-free makeup on Google, as shown below, you will see many words like vegan skincare and not tested on animals, which you can start with.

Keep trying and look for product trends from different angles until you find a product that meets the needs of niche consumers. Even if competitors emerge in that niche, you can still segment the audience and increase your competitive advantage.

2) Create a mind map

Do you have an idea but can't think of a product concept? Try creating a mind map. Mind maps help you structure your thoughts more intuitively and expand your thinking. There are thousands of paths, and you can choose the one you want to take.

Tool for creating mind maps: Text2MindMap, which users can edit online for free.

The following is a mind map based on cruelty-free makeup:

3) Refer to Google recommended search terms

As we all know, before you finish typing your keywords in the Google search box, there will be automatically recommended search terms below. These are the most relevant search terms calculated by Google's algorithm, and you can use them to find your niche category.

Google will only show a few recommendations, so use the Keyword Tool or Answer the Public to collect and organize all the searches Google suggests .

Enter cruelty-free in the keyword tool. The results may contain potential products you want. Here are some examples of the results:

4) In-depth keyword research

A more in-depth way to research keywords is through keyword research tools , such as the Google Keyword Planner launched by Google Ads . Keyword research tools are more advanced and customizable than the keywords recommended by Google.

To use this tool, you need to have a Google Ads account (it’s free to sign up). Once you’re logged into your account, select Tools from the top menu, then Keyword Planner.

After entering Keyword Planner, enter the keyword you want to view in the search box and view the results. You can set the location in the left navigation bar to ensure that the target location is covered. You can also add filters, delete registered brand keywords, and view other recommended search terms.  

These search results can give you a good idea of ​​potential niches related to your initial search terms, and sometimes you may even want to consider some popular specialty products. Try typing in a variety of keywords. If you don’t have a Google Ads account, you can download the Keywords Everywhere browser extension to see search volumes directly on the Google search results page.

5) Find active communities online

It is easy for Internet users to form a community based on common interests, passions and hobbies, that is, to form a niche market.

Find the community your product belongs to based on its features, or find a potential community in the following ways:

• Wikipedia: Search for "hobbies" to filter out the most visited pages;

• Reddit: dig into the most active subreddits, find active users and see what they are discussing;

• Follow hashtags on Instagram and Twitter like #vegansofig or #vegancommunity.

Now that you’ve decided what you want to sell, you need to make sure someone buys your product.

It’s not difficult to convince your audience to buy your product in a niche market, but you have to make sure that the audience base in that market is large enough. Otherwise, you should consider repositioning your audience or simply changing your product.

Even if you do well in a niche market in the early stages, the market changes and you need to keep improving and adjusting your market positioning. If necessary, you need to launch new products in your product line.

Here’s how to evaluate your niche:

• Build your audience first . Kickstarter campaigns create buzz and awareness before a product is even developed. While this may not be the right approach for you, you can use permission-based email marketing, social media ads, or other online marketing strategies to get your product idea out to your audience before it’s even realized. This way, you’ll have a pool of potential customers who are likely to buy your new product after you launch it.

• Test before investing . Start by making a small batch and running a campaign with your target audience. Ask for feedback from the first customers who buy your new product, or send it to influencers and ask them what they think. The sooner you get feedback, the better, so you can make improvements before you go into production.

• Dig deeper into your niche . After you have done keyword research and identified your niche, you can dig deeper into your niche. Get deeper market insights from blogs, social media, influencers, and other key channels related to your niche.

• Study market consumption trends . Market research tools such as Facebook IQ, Think with Google , and Nielsen ’s consumer research information can help sellers understand consumers’ pain points, needs, and emerging trends. Set keywords, subscribe to Google Alerts, and regularly monitor social media messages to learn about the latest trends.

When actually marketing your product, keep in mind the needs and commonalities of your specific audience. How does this niche market differ from the larger market? How can you satisfy specific consumer needs and preferences?

Understand the unique needs of each niche so you can reach that specific audience directly when promoting your product. By communicating to your audience that your product is designed specifically for them, your product is more likely to gain their attention.