The year is 1993 and you’re a struggling toy store owner. You hear that these tiny stuffed animals called “Beanie Babies” are selling well, but your target customers are children more than adult collectors. Do you stay the course or switch niches?
Hindsight is always 20/20, but the challenge lies in predicting the next big thing before it becomes the next big thing. Just like playing the stock market, “investing” in the right ecommerce niche can make retailers win big — or lose it all.
So how can ecommerce owners identify the best niches? In this article, we explain everything you need to know about breaking into niche markets, including the top 10 trending niches of 2022 to give you a head start. Get a quick look at them here:
- Next-generation Beauty Products
- Next-generation Phone Accessories
- Vape Products
- Chic Lighting Decor
- Tools and Hardware Supplies
- Decorative Household Items
- Athletics-inspired Clothing
- Reusable Bottles
- Home Office Equipment
- Dog Products
What Is a Niche?
Pronounced like either nitch or neesh (depending on how fancy you want to sound), a niche is simply a small and specialized market. You know people who have pictures of dogs on all their shirts, pillows, and blankets? Those dog-printed products are a good example of a niche market — just like homemade jewelry, merchandise for a specific sports team, and tech gadgets for early adopters.
Essentially, niche markets are just more focused markets. The more you can narrow down your target customer group, the more niche you become. A national grocery-store chain with all kinds of food is less niche than a chain with only organic goods. A chain that sells only gluten-free, vegan organic food is more niche than a chain that sells just organic food. The more specific the market, the more niche.
Niche stores may have fewer customers than large, department-style stores, but that’s precisely the point. With less customers, you can more accurately optimize your sales strategies, especially when your customers have a lot in common. Although there’s no official definition, niches are often divided by these categories:
- Demographic — by personal characteristics like age, gender, income, etc.
- Geographic — by location, particularly important for weather- or climate-related products
- Pricing — from premium, luxury items to affordable, dollar-store brands
- Psychographic — personal mindsets like moral principles, religious beliefs, attitudes, etc.
Niche groups may be smaller, but niche shoppers tend to share characteristics and shopping behaviors. While “general” stores struggle to keep everyone equally happy — parents, children, the elderly, teenagers, etc. — a niche store can focus on only keeping their specific group happy.
Why Are Niches Crucial for Ecommerce?
The short answer is competition. There are a lot of ecommerce stores online today, and if you’re a small or medium-sized company, you don’t have the resources to fend off rivals for every single market group.
A smarter and more resourceful approach is to pick a specific market group (an ecommerce niche) and invest your resources there. If you succeed, you can always expand into other niches later and build your brand one market at a time.
Moreover, niche customers tend to shop in similar patterns, making it easier to predict and plan which products to sell and how to market them. That trickles down throughout your entire business, even reducing storage fees by reducing hard-to-sell inventory.
In general, the more you understand your shoppers, the more you can optimize your sales strategies. Pricing, deals (when and what kind), and sales techniques like upselling can all be tailored to specific shopper types to increase success.
Then there’s customer outreach. Look at the Twitter account of Amazon, who targets a broad and unspecified group of people. Their content is a lot of generic, feel-good content that appeals to everyone, but also no one in particular. It’s all over the place.
Compare that to the Twitter account of Powell’s Books, a famous indie bookstore in Portland. Because Powell’s Books has a niche audience, significantly smaller than Amazon’s audience, they can cater their content better — it’s almost all about books, authors, and other literary topics that their niche audience adores.
That’s the appeal of niche marketing in a nutshell — instead of getting a bunch of people to like you okay, get a smaller group of people to absolutely love you!
Pros of Selling Niche Products
- Optimized product selection — as long as your products stay within the niche, they’re likely to sell; so less guess-work in choosing what to offer.
- Optimized pricing — because your range of customers is smaller, you can use previous sales analytics to estimate the perfect prices.
- Simpler brand management — with a more targeted range of products, you have less listings and maybe even less channels, making your entire brand easier to manage.
- More effective content — it’s easier to create valuable content when you cater it to the preferences of a single group, rather than trying to please everyone at once.
- Sense of community — targeting specific niches makes you “in with the out group,” leading to greater customer loyalty and more personal relationships in general.
- Precision online marketing — you can more precisely use SEO keywords and web design features to target specific group behavior rather than general group behavior.
- Lower storage fees — product turnaround is faster when you can better predict best sellers, plus less chance of clogging the pipelines with “duds.”
- Less expensive campaigning — targeting less markets means less ads, less diverse content, and less market research.
Cons of Selling Niche Products
- Requires understanding of target groups — niche marketing demands an intimate understanding of your niche customers, which is why we always recommend targeting a niche you already personally understand.
- Limiting at first — choosing one niche means ignoring all others (but you can always expand later when your business is stable enough).
- Hit or miss — it’s hard to hedge your bets with niche marketing, so your early campaigns may be either hit or miss.
How to Find Your Perfect Niche
One of the most important business decisions an ecommerce owner has to make is which niches to target. It involves not only choosing niches you’re personally passionate about, but also profitable niches whose market can support your company. You have to consider factors like market demand, niche customer shopping habits, and the availability of products.
While we don’t want to bury you with those details here, if you want to learn more, read our more thorough guide on how to choose your perfect ecommerce niche. There, we explain step-by-step all the considerations of choosing the best niches that suit your brand.
Best Ecommerce Niches of 2022
The last two years have made a significant impact on ecommerce, and plenty of people have recently discovered just how much they like shopping online — even after the brick-and-mortar stores reopened. The shift to online retail still has plenty of momentum, and you can leverage it further by tapping into the most popular ecommerce niches and products for 2022.
1. Next-generation Beauty Products
Beauty products in general have always been a strong niche for ecommerce, and perhaps that’s why innovation has gripped the industry. There’s an entire sub-niche who’s tired of using grandma’s make-up and skincare, but luckily for them (and online retailers) there’s a new generation of beauty products.
One of the best-selling products lately is the detangling hair brush. Somehow, somebody figured out how to improve the age-old hair brush, and anyone with long hair is going to be interested. Pimple patches, medicated pads for acne removal, also had a surge of interest throughout 2021, with signs their popularity could continue into 2022.
Another group of trending products are cruelty-free makeup. Although this isn’t a new concept, it’s gaining steam lately on the heels of a more general eco-friendly, environmentally conscious movement, which has been a growing ecommerce niche for a couple of years now.
2. Next-generation Phone Accessories
In the same vein as beauty products, the phone accessory niche — another popular ecommerce category — has its own sub-niche for the latest gadgets, contraptions, and add-ons that weren’t as accessible a few years ago. The recent success of TikTok especially contributes to the demand for improving a phone’s capabilities.
One of the most recent trends is ring lights, perfect for adding professional-tier lighting to selfies and video calls. Similarly, phone tripods and mounts (including car mounts) are on the rise as a hands-free alternative to holding your phone while filming or talking.
Magnetic phone accessories like chargers and mounts may have passed their prime, but still hold on to enough interest to make them a viable choice for 2022.
3. Vape Products
After the last few years have normalized vaping as a recreational hobby and alternative to smoking, the industry has now stabilized enough to support a rich market of products for vape enthusiasts.
This niche’s staple product is vape pens (a.k.a., e-cigarettes), which range from around $30 to over $100, making them flexible enough for different business models. From there, you can offer vape cartridges in different flavors, from traditional to exotic, catered to your customer base.
4. Chic Lighting Decor
Falling into the category of home decor, chic new lighting products are on the rise. The best part for retailers is that you can tailor these to any niche just by choosing the right styles and tastes.
In particular, neon signs — especially custom neon signs — have been increasing in online search frequency. Although searches for LED lights are down from last year, there’s still quite some interest in LED trees, LED car lights, and fairy lights going into the new year.
5. Tools & Hardware Supplies
Extra time at home created a surge in popularity for DIY crafts and home improvement. While standard tool kits could seem like a household necessity, more specialized tools, including some power tools, are now getting increased attention.
In particular, both power drills and hand-tool cutters landed on Shopify’s top trending products for 2022. Some tools can be further customized to your audience by the material (e.g., wooden or metal), not to mention pricing tiers.
6. Decorative Household Items
Household items are a bit general to be niche, but you can focus on particular styles and artistic tastes to accommodate them to your particular audience. In this way, you can capitalize on the particular items that have been increasing in online searches, no matter who your customers are.
We take for granted that every household needs pillows and kitchen towels, but both items are seeing increased popularity going into 2022. Likewise newer products such as weighted blankets are becoming more commonplace in shopping searches.
7. Athletics-inspired Clothing
While it’s difficult to foresee fashion trends, the interest in athletics-inspired clothing seems to be sticking around through 2022. This encompasses not just sportswear, but also casual wear designed in that style.
One of the most popular at the moment is athleisure, such as designer sweatpants, relaxed-fit yoga shorts, or branded pullovers. Sports bras, which originated as exercise clothes, are currently migrating into everyday casual wear.
Although it’s not exactly in the same niche, shapewear is a popular product from a few years ago that still has strong product searches today.
8. Reusable Bottles
Another by-product of the eco-friendly movement, reusable bottles remain strong after a few years. They’re suitable for a few different customer groups, from the environmentally conscious to the penny-pinchers who don’t want to buy bottled water. In fact, depending on the artwork and style, they could potentially fit any niche.
In addition to the standard metal or plastic reusable water bottles, Shopify’s best-selling list adds vintage decorative bottles such as glass vases and mason jars. While these are more suitable for crafts and used-good sellers (the Etsy crowd), there’s still plenty of mainstream options for general sellers as well.
9. Home Office Equipment
With so much remote work during the pandemic, it’s no surprise that the home office equipment market is growing. Even as the bulk of the workforce returns to their offices, there’s still a large segment of people who have decided to make remote work permanent — and those people need furnishings for their home office.
Specifically, office chairs (especially ergonomic chairs) are more popular in online stores lately, as are footrests. Likewise, desks of all kinds, including sit-stand desks, have seen increased interest. On top of that, these remote workers need stationary supplies and other office equipment, such as ergonomic mouses and broad computer accessories.
10. Dog Products
Last, we have a new leg of an old niche. General pet products have been an ecommerce cornerstone for years now, but lately, dog products are seeing increased interest. That’s not to say products for cats or other pets are down, but something about dog owners, in particular, is making them want to shop more.
The usual dog products like dog bowls, toys, and treats are still performing as well as ever, so that’s a good place to start. Demand for dog supplements seems to be increasing recently, coinciding with the popularity of human supplements. Dog beds started 2021 with a lot of interest, and signs indicate it could end the year on a high, too.
How to Source Niche Products
Of course, choosing your niche is only half the battle. You also need to take care of all the usual ecommerce responsibilities, like product sourcing and streamlining your supply chain.
No matter which niche you choose, chances are you’ll have a variety of different product sourcing methods to choose from. If you’re new to ecommerce, here’s a list of the most common product sourcing methods, with links to guides outlining their best practices.
- Wholesale — the traditional method of product sourcing where you buy products in bulk with a price break and store them yourself until sold.
- Subscription Box — curating collections of products on a subscription payment model, rather than a per-sale model; a popular choice for niche marketing because it’s easier to guess customer preferences.
- Liquidation — buying products in bulk from another store that needs to unload them fast (at a big discount), typically from going out of business.
- Private and White Label — products are manufactured by a third-party, but you can legally rebrand them and sell them as your own; great if branding is a top priority in your sales strategy.
- Retail Arbitrage — fueled by elbow grease and personal effort, you actually go to other stores, buy products at a discount (i.e., a 2-for-1 at Walmart), and then resell them online with a profitable markup.
- Dropshipping — you sell items online, but the manufacturer handles the shipping; you make less money per sale, but handle less ecommerce duties. Learn how to choose the best products to dropship.
- Artisans — handcrafted goods made by specialists instead of manufacturers; a niche category on its own, but can always be more specialized (i.e., handmade jewelry, handmade furniture, etc.).
- Second-hand, Thrift, or Used Goods — another niche category on its own, you resell used goods either for the affordability niche or the retro niche.
Whichever product sourcing methods seems best for you, make sure it passes this 5-point checklist for viability.
After Choosing a Niche
Once you’ve chosen your niche, your ecommerce journey is just beginning. You still have all the other issues to deal with — managing inventory, updating listings, monitoring shipments, maintaining a budget, and more.
Luckily, ecommerce software like Ecomdash can help with all of those, saving you time and stress with convenient workarounds and automated task management. From inventory management software to dropship automation, we have everything you need to manage your online retail shop. You can also visit our blog to stay updated on yearly ecommerce niches and top trends in the industry.