Category Archives: Online business

Targeting a Niche Market is a Way for Small Online Retailers to Sidestep Big Competition

The market dominance of the online retail giant and multi-channel retailer Walmart is a huge barrier for anyone who wants to start selling products online.  As a result, the big retailers can be found anywhere online. They offer a large variety of products at ridiculous low prices. Moreover, they promise to deliver products within a couple of days of ordering. And they take the return of products in their stride. So, how on earth can you, as an owner of a Shopify or Woo Commerce website, compete with Amazon and Walmart? The answer is to develop a niche market for your business.

What is a niche market?

A niche market is a small market segment with customers that have specific interests or needs 1. Contrast that with a mass market where retailers such as Amazon and Walmart target as many people as possible. As a result their product offerings are wide and deep and they target generic audiences all over the world. These large retailers that compete in mass markets seem to have unlimited financial resources to enjoy a sustainable competitive advantage with all aspects of the retail mix.

But, you don’t want to compete with Amazon or Walmart, do you?  Therefore it may be worthwhile to consider a niche market.

The characteristics of a niche market are as follow: 2

  1. The customers in the niche have a distinct set of needs;
  2. They will pay a premium price to the firm that best satisfies their needs;
  3. A niche is not likely to attract competitors;
  4. The niche marketer gains certain economies through specialization; and
  5. The niche has size, profit, and growth potential.

So, it’s looking good thus far! But how can you develop a niche market for your business?

How to develop a niche market for you retail business

Although niche marketing and market segmentation seems like the same thing, there is a fundamental difference. Market segmentation is a top-down approach, stating that it is “the process of breaking a large market into smaller and more manageable sub-markets.” By contrast is niche marketing a bottom-up approach, meaning that “the marketer starts from the needs of a few customers and gradually builds up a larger customer base.” 2

Five important elements of a niche market are: 2

  1. Positioning – offer a product that satisfy a unique need with the segment;
  2. Profitability – customers in the segment must be willing to pay a premium for your product or solution;
  3. Distinct competence – you should quickly be seen as an expert by the customers in the niche market;
  4. Small market segments – means that you can focus on the customers’ needs and pickup more quickly on developing trends;
  5. Adherence to the marketing concept – the philosophy that firms should analyze the needs of their customers and then make decisions to satisfy those needs, better than the competition.

Next you must communicate with customers in you market niche.

Niche marketing

Many small and new retailers choose to operate in niche markets. They deal mostly in specialized or unusual products which cannot be found easily elsewhere like departmental outlet or supermarkets. These retailers need to be found in places where it is easy for customers to seek them out.

One of the places where customers can search for special products is the internet. Astute marketers in a niche market can, by using the right digital marketing tools, get right in the faces of their target audience.

The ability of online retailers to help customers locate, evaluate, and purchase a far wider variety of products than they can via traditional brick and mortar channels is an important characteristic of the internet channel. Active search tools allow customers to easily locate products they know they are interested in. Even more, they can help them to identify products they weren’t previously aware of. 3

Customers that are seeking unusual products are more likely to join online communities on social media sites with relevant topics. As a result, retailers may not only find and learn from customers in on social media, but positive feedback about their brand may lead to more site visits.

A great idea for retailers is to create discussion groups on their own websites. Get a couple of known influencers to publish or interact with your audience. This may give your brand an ‘expert’ states in the niche market. Equally important is regular and informed communication (a newsletter via email) to keep the attention of your special group customers.

Benefits of Niche Marketing

Kirsten McCormick in TriveHive lists the following benefits of niche marketing:

  1. Enhanced Customer Relationships. A small customer base has its benefits. So, when you are engaging with fewer people, you can focus on the quality of those engagements and on nurturing your relationships.
  2. Reduced Competition. When you have a highly specific product or service, there will be less companies out there with the exact same offering.
  3. Increased Visibility. Increased visibility is a benefit of niche marketing that not only leads to more customers but can also improve your online presence.
  4. Word of Mouth Growth. Another benefit of niche marketing is that it is very word-of-mouth-friendly. Indeed, people in a niche tend to be in frequent contact with others in that niche, which means more opportunities to get the word out about your business.
  5. Honed Expertise. Niche marketing requires more concentrated practice in one area, so it can really fine tune your expertise in a shorter time period. Hence the benefit of niche marketing is that it enables you to become an expert or thought leader in your niche.
  6. Less Resources. One important part of effective digital marketing is identifying and understanding your audience, which requires an investment of time and money on data and analytics tools. The benefit of niche marketing is that because you are confined to a specific person and a specific need, less focus is required on digging into your data to understand and keep up with their needs.
  7. More Fun. Businesses don’t always pick their niche and pursue it. Oftentimes, they accidentally find their niche in the process of serving their target audience.

Disadvantage of niche marketing

Because the customer base of a niche market may be small, the potential for the retailer to grow her business can be limited. However, says Ash Ome in “Despite a few disadvantages, the niche marketing with drop ship has so many advantages that will surely take your small business towards success.”


The retail industry is in the midst of disrupting events that are shaping its future. Most Brick and Mortar retailers are adding the online channel to their business. At the same time are Pure Play online retailers adding physical stores to the business.

And then there is But the answer remains to get a niche market for your business. That’s especially true for the millions of Shopify and Woo Commerce drop shipping retailers trying to make money in the online channel…

Read more: Thinking About Competing With Think Again…


1 Choudhary, S. 2014. Rooting by niche marketing, International Journal of Advanced Research in Management and Social Sciences, 3(10):84-91.Contrast

2 Parrish, E.D., Cassill, N.L. and Oxenham, W. 2006. Niche market strategy for a mature marketplace, Marketing Intelligence & Planning, 24(7):694-707.

3 Brynjolfsson, E., Hu, Y.J. and Smith, M.D. 2006. From Niches to Riches: Anatomy of the Long Tail, MIT Sloan Management Review, 47(4):67-71.


Making Money Online Requires Analysis, Planning, Effort and Lots of Patience

It seems that right now is the best time for making money online. According to, retail e-commerce sales worldwide amounted to 1.86 trillion US dollars during 2016 and online retail revenues are projected to grow to 4.48 trillion US dollars in 2021.

Ashwin Ramasamy writing for PipeCandy estimates that there are between two and three million eCommerce websites, excluding websites from China, on the web. So, if you do the calculation, taking the numbers of 2016, the average annual revenue per eCommerce website could be around 740,000 US dollars.

And with an online retail revenue of 4.48 trillion US dollars projected for 2021, there seems to be a lot of spare capacity to take up. Is making money online that easy? Not really…

“eCommerce has about an 80% failure rate. Other researchers claim it’s as high as 97%. One of the reasons the failure rate is so high is because an eCommerce business can be easy to set up, for a small amount of money. Creating a store front is easy. Making it successful, on the other hand, not so much”, says Dianna Labriem in

So, the Trillions of US dollar revenue generated each year by online retailers is shared by a handful of eCommerce websites.

Making money online the hard way

From the moment that you’ve activated your ecommerce website, you need already to know what value you’re offering your customers. In other words, what is your competitive advantage in the online market you’re targeting?

A sustainable competitive advantage may be defined as ‘the ability to deliver superior value to the market for a protracted period of time’ 1. Here, superior value refers to the fact that the consumers of a product or service must be convinced that they are getting something of value for their money. The value proposal for Bricks and Clicks retailers was previously discussed in this blog.

The hard way of making money online starts with analyzing your online market.

Analyzing your online marketplace

To make money successfully online, you need to know everything about your market. Your market consist of your customers, suppliers and intermediaries and your competitors.

Analyzing your customers:

  • Who are your biggest customers?
  • Who are the most profitable?
  • Where can you find your customers online?
  • Do your customers have any unmet needs?
  • What are the benefits they seek from your products?
  • And what price are they willing to pay for your products?

Analyse your intermediaries:

Intermediaries have captured a significant proportion of the profits available in the online retail market 2.  Therefore, their impact on your business’s marketing mix should be analysed.

  • The place (delivery) – most online retailers are dependent on logistic service providers to do the ‘last mile of delivery’ to their customers. Retailers should analyse the different service providers and choose one that is the most reliable at the best price;
  • Your product – only source products of the highest quality at reasonable prices from reliable suppliers;
  • Your promotion – which marketing intermediary will deliver your marketing messages the best? Google’s AdWords or social networks such as Facebook or Twitter?
  • The price that intermediaries charge – analyse the offerings and choose those who deliver the best service at reasonable prices.

Analyse your intermediaries

Analyse your competitors:

You need to find out how to satisfy customers better than the competition. By doing a competitor analysis you may begin to understand the level of competition that exists in your target market and it will help you to make the right pricing decisions.

The strategies and actions of your competitors may well determine if you will be making money online:

  • Who are our present and potential competitors?
  • What are the positions that they have established in the market?
  • What are their strategic objectives and thrusts?
  • What are their present and future strategies?
  • What are their strengths and weaknesses?

The next step to do to get your online business on its way, is incorporating all the data you’ve generated with your analysis into a strategic plan.

A strategic plan to make money online

By now you should know who your customers are; who the intermediaries are that you’re going to use; and whom you’ll be competing against. Now you should develop a competitive strategy.

The competitive strategies available for online retailers to obtain and maintain a sustainable competitive advantage are 1:

  1. The differentiation strategy – value is added to the product or service through differentiation to make it different from competitors’ products and services.
  2. The low-cost strategy or overall cost leadership – this implies that an organisation will supply a product or service more cost-effectively than competitors.
  3. The focus strategy – here you can focus on a special product/market niche that you may later monopolise.
  4. The pre-emptive move or first-mover advantage – this strategy can be pursued by an online retailer who takes a calculated risk by being the first to enter a market with a new product or service.
  5. Synergy – this means that all the components of an organisation are working together and so creating a sustainable competitive advantage. For example a physical retailer that adds the online channel to its business.

It takes a lot of effort to make money online

Mostly, money doesn’t just start flowing in because you have an ecommerce website. You may need to spend many hours a day to monitor the happenings on your, (and your competitor’s) website. You need to follow the trends in your market, negotiate with intermediaries and confront your competitors. You definitely need to create quality content for your website and also get a presence on social media networks.

Furthermore, you should manage the finance of your business and identify the risks of the business. Your online customers demand a 24/7 service – and that is what you need to deliver. For your customers, the alternative is a click away…


Although the internet offers us billions of potential customers, anywhere at any time, it will take some time for your online business to show substantial profits. That is especially true for small retailers with a limited marketing budget…

However, if you do the right thing and do that right, with lots of patience and belief, you’re online business may be part of the 3% that make money online.


1 Du Plessis, P.J., Jooste, C.J. and Strydom, J.W. 2001. Applied strategic marketing, Heinemann.

2 Laseter, T.M. and Rabinovich, E.  2011. Internet retail operations: integrating theory and practice for managers, CRC Press.


  1.  Featured image: Pixabay
  2. Image in body: Pixabay

Drop Shipping Retail in 2016

The author of this blog has previously reported on hard lessons that he’d learnt when trying to do drop shipping (How-not-to-start-your-online-retail-business). Has anything changed with drop shipping since three years ago?

What is drop shipping?

Just a quick reminder what drop shipping is:

Drop shipping, according to Shopify, is an online retail model where a retailer doesn’t keep the products it sells in stock. Instead, when a retailer sells a product, it purchases the item from a third party and has it shipped directly to the customer. As a result, the retailer never sees or handles the product.

What are the advantages and disadvantages of drop shipping?

Joel Padi, writing in the Market Mogul has recently commented on drop shipping. He mentioned the following advantages and disadvantages:


  • It is easy and cheap to start an online drop ship business – you only need an e-commerce website;
  • No capital is needed to secure a premises and to buy inventory;
  • The costs for the retailer only starts when the customer has paid for her order;
  • The drop ship retailer can operate from anywhere at any time.


  • Low margins – because entry is easy and many of the products is from the same manufacturer;
  • Intense competition – thousands of websites offering the same products. Drop ship retailers must invest many dollars and lots of time for prospect customers to buy from them;
  • Lack of quality or brand control – drop ship retailers are totally depended on the drop ship suppliers for quality or brand control;
  • Availability – most of the drop ship retailers purchase their products from a few suppliers. Retailers can occasionally expect to find products are out of stock after an order has already been placed;
  • Shipping issues – the cheapest source of drop ship products is from countries such as China. Typically this results in a month-long wait on deliveries.

Has anything changed with online drop shipping retail the past three years?

To answer my own question – no! The alternative to drop shipping is for retailers to find a niche product to trade online. Customers are looking for niche products online because they have a specific need for them. Retailers may therefore ask a premium price for satisfying those specific needs…

Visit eBizplan for more on online retailing


Bricks and Clicks Retail – Shopping Experience makes the Difference

Shopping experience matters. Deloitte reports that while shoppers are still visiting Bricks and Mortar shops to complete transactions, more sales are driven by digital devices.

The findings reveal that while over 90% of purchases are still made in-store, around 40% of visits to a shop are influenced by digital channels.

Bricks and Clicks retailers should increase their customer’s shopping experience

David White of Deloitte believes digital platforms are driving customers to shops. Bricks and Clicks retailers should therefore focus on streamlining the shopping experience they offer across all channels. Bricks and Clicks retailers should mimic the shopping experience at their shops that their customers had online.

Customers who visit Bricks and Clicks retailers have empowered themselves with knowledge they found online. They know what they want when they visit the shop.

Bricks and Clicks retailers can improve the shopping experience of their customers   by doing the following:

  • Eliminate the cash register in the shop. Rather let salespeople handle the sales transaction on smartphones before sending customer receipts via email.
  • Give customers the option to buy products online. They can pick them up at the shop or buy online and return them at the shop.
  • Enable customers to scan and bag their own merchandise.
  • Bricks and Mortar retailers can introduce digital technologies, such as virtual fitting tools and virtual product aisles, in their shops.
  • Some forward thinking retailers is considering introducing a virtual mirror that overlays a digital image on top of a normal mirror allowing the customer to see how clothing fits.

By making the shopping experience as efficient and simple as possible at the Bricks and Clicks’s physical shop, the business will grow. The customer will enjoy the same experience in the shop as what she is experiencing online.

Unfortunately, most retailers are still unable to meet the needs of their consumers by creating a shopping experience where online and offline intersect.

Visit eBizplan for more on adding Clicks to Bricks.


Image: Wikipedia

The Retail Warehouse – Getting the Right Product to the Right Customer

The function of the warehouse has changed substantially for Bricks and Clicks retailers. Brick and Mortar retailers traditionally used their warehouses to receive and store their merchandise to later put it on the shelves to be sold.

Now, in the age of online retailing, the role of the warehouse has changed from a dusty storage facility to a dynamic customer fulfillment center.

The role of the warehouse as customer fulfillment center

A fulfillment center is a place where retailers receive incoming orders from customers, and where the products are picked, packed and dispatched. It may also be used strategically  to enhance your online business.

Amine Khechfé writing in SupplyChainDigital shares the following tactics that companies are using to grow their online success.

  • Drones in the warehouse.  Walmart suggests it may soon be using drones to inspect labels and inventory. It is a process they say usually takes about a month to complete with handheld scanners.
  • SMEs transform storefronts into warehouse space. The retailer Target are now converting some of its storefront space to mimic warehouses in order to increase sales and adapt to the changing needs of the consumer.
  • Amazon builds urban warehouses. Amazon can now cater for customers who want one- and two-hour delivery time-frames by taking their fulfillment centers into urban areas, .
  • SMEs are using predictive data to pinpoint new warehouse locations. Predictive technology allows small businesses to meet consumer expectations. It may help small businesses figure out the best place to build a new warehouse. The technology also supply shoppers with a more accurate delivery window, and identify where to stock products.

Multi-channel shoppers have high expectations. However, getting the right product, at the right customer, and quickly may allow you to stand out above your competitors.

Visit eBizplan for more on business- and marketing planning.

Image: Zappos

Bricks and Clicks Retailers – the Best of Both Worlds

The way forward for retail is Bricks and Clicks. In an article earlier this year Justin Taylor head of EMEA retail trying to console Bricks and Mortar retailers said: “despite the impact of e-commerce, physical stores remain a cornerstone of consumer engagement”.

The question that remains to be answered is:  Why is online retail growing worldwide and, at the same time, Bricks and Mortar retailers that are not engaging their customers online are closing down?

Why do Bricks and Mortar retail customers shop online?

If Bricks and Mortar retailers are the cornerstone of customer engagement, then where have their customers gone to? The customers of Bricks and Mortar retailers probably left because they find online shopping to be more convenient:

  • They can shop 24/7 from anywhere;
  • They can get more information about products and services online;
  • They can go online to search for specific products and where to find them;
  • They can compare the prices of products online; and
  • They can share their experience online with friends, family and social communities.

In spite of the fast growth of online shopping, many retailers that are doing their business only online (Pure Clicks) are now starting to look for physical retail space.

Why are Pure Clicks retailers looking for Bricks and Mortar retail space?

It is not a simple matter of Bricks versus Clicks says Justin Taylor. Physical stores remain a hugely important part of the retailing mix as they offer the ability to interact with merchandise, instant gratification for consumers, personal service and professional guidance.

We have seen the migration from bricks to clicks, and the pattern in some instances is now heading the other way as brands born online are now seeking physical space. The answer is Bricks and Clicks retail shops that have both physical and online space. Bricks and Clicks retailers have the best of both worlds.

Integrating the physical with the online may pose a challenge for most retailers. eBizplan, a management consulting business can help retailers to run the physical and online business as one.

Retailers Biggest Challenge – Integrating Online with Offline

Retailers who are for years in business are using technology that is developed for running a physical shop (Bricks and Mortar) better and making shopping for their customers easier.  A study by Forrester Consulting found that although 90% of the UK retailers are now doing business online. However, most of them find it difficult to join their online and offline technology.

Only 26% of the retailers interviewed mentioned that their sales are influenced by the online channel.

Technology use by the customers of Bricks and Mortar retailers

Most of the customers of Bricks and Mortar retailers visit their website to get information about the inventory in the shop.  A recent study by Forrester Consulting,  found that 39% of customers are unlikely or very unlikely to visit a  store if its website does not provide physical store inventory information.

Only 32% of the shop owners that was interviewed offered a function on their websites for customers to view their in-store inventory details.

Customers want shopping convenience

The study indicated that half of all customers cited store pickup options as important or very important to them when shopping online. However, only a third of retailers today already support store-pickup programs.

Read also:  Will “Click and Collect” Solve the Delivery Headaches for Grocers?

The customers interviewed demanded the following:

  • Absolute guarantees that the product is actually available;
  • Rapid picking and notification alerts;
  • Customers want to pay at the point of pickup;
  • Customers want the option to pick their goods up at alternative locations.

In-store experience in the digital age

The customers are in power when they use their smartphones in the shop. They use their smartphones to check inventory availability before entering the store.  The customers also use their smartphones to get more information about the products  they are interested to buy.

Bricks and Clicks retailers need to be both masters of the store and of the digital domain.

eBizplan, an online consulting business, can help retailers to draft a strategic plan to integrate their offline and online business.

More Mobile Sales For Online Retailers

Growing your mobile sales in the retail channel starts by delivering the same type of experiences consumers are encountering while shopping online using a computer.

Mobile has since 2014 exceed personal computers for internet usage…

The growth of mobile devices

The onset of smartphones and the roll out of Wi-Fi connections has increased mobile online shopping. Although mobile continues to drive the most sales growth for retailers, the sales still aren’t keeping up with retail traffic.

According to Andrew Meola, IBM found that smartphone traffic beat both tablet and desktop, making up 53% of all online traffic. But mobile still only accounted for 29% of all online sales.

Why does mobile sales lag behind other devices with online sales?

Customers using mobile have to fill out too many fields, and the text is too hard to read, among other things, says Dangelmaier in a recent blog. Merchants haven’t put enough weight into mobile and its impact on converting shoppers into buyers and completing purchases at checkout.

Some customers will abandon their checkout chart if they don’t have or can’t find a coupon to apply at the checkout. A lot of merchants haven’t built platforms that can easily execute coupon codes. Checkout conversion, especially on mobile devices, is a huge problem that needs to be addressed.

Visit eBizplan for your business plan and marketing plan needs.

Five more Trends that Bricks and Clicks Retailers Should Take Note of in 2016

Software AG identified ten disruptive trends retailers should take note of this coming year. The first five trends was discussed previously. Here is the last five trends to watch out for:

6. The internet of total satisfaction

The Internet of Things (IoT) is going to revolutionize the store of the future, with its sensor-oriented devices enabling the most detailed and targeted customer centricity. Retailers embracing IoT will have visibility into inventories via electronic shelf sensors; the ability to create smart signs that are weather- or facial expression-relevant; and the tools to make every loyalty customer feel coddled and important.

7. Immersion therapy

Futuristic technology will immerse customers in the shopping experience. Technologies such as Microsoft’s Hololens will allow customers to augment reality while in-store. They will be able to try on clothes, or design their ideal kitchen, virtually, while sharing their experiences with friends and family. iBeacons™ and anonymous analytical face detection will enable retailers to interact in real time with customers, as well as track their behavior.

8. Clean-up on aisle one

Real-time monitoring capability will be critical for the store of the future, in order to sense, correlate and automate processes from staffing to inventory. Smart sensors will detect activity and provide visibility across a store coupled with streaming data and real-time analytics, allowing for actionable and automated responses to things like a spill in a grocery store or a run on umbrellas in a rainstorm.

9. Buy me now!

Retailers will further customize and personalize instant gratification “buy buttons”, which can be found anywhere from Twitter to Amazon, with the expectation that these will translate into higher earnings. But they will need to make strategic technology investments to ensure real-time inventory is understood and the complex processes involved in new channels are orchestrated correctly.

10. Last Item in Stock

Real-time inventory visibility will dominate as retailers strive to keep the customers informed of stocks at all times. Retailers will control inventories by applying technology that shows inventory levels across all channels.

A Brick and Mortar retailer battles to survive on its own, as is a Pure Click retailer… Retailers need to integrate both the physical and digital systems to prosper and grow during 2016. Visit eBizplan for plans to integrate your physical retail shop with an online retail channel.

Trends that Bricks and Clicks Retailers Should Take Note of in 2016

Software AG identified ten disruptive trends that Bricks and Clicks retailers should take note of this coming year. Here is the first five trends to watch out for:

Trends that Bricks and Clicks retailers should take note of

1. Fewer stores, more stuff

Bricks and Mortar retailers will add fewer new shops as they dramatically reinvent themselves to address multi-channel issues. To be honest, I’ve read ever more about retailers closing shops never mind not adding new ones! The Bricks and Mortar retailers that are remaining will serve more as pick up and fulfillment centers. The “endless aisle” concept will extend shelf space to the brand’s full catalog of products and accessible content.

2. Focusing on the individual customer – you

Customer-centric personalization will differentiate retailers by making their CRM strategies more targeted. Retailers may deploy customer-centric technologies such as easy sign-up, and RFID-tagged loyalty cards, which can send personalized rewards over mobile phones when in-store. The technology allows retailers to tap into internal information, known preferences, and social media data to better understand and delight their customers.

3. The right price

Differentiation by price will be much more dynamic in nature in order to beat the competition as customers become more aware and more sensitive to price.  Also, real-time electronic shelf pricing will replicate customers’ online experiences, as well as optimize inventories and reduce labor costs. Real-time personalized discounts and special offers will further motivate shoppers to head to stores.

4. A master system to control cross channel activities

Today’s customers expect to get what they want—where and when and how they want it—and they achieve it by using multiple (Omni) channels for retail and marketing communication. Therefore the complexity of omni-channel processes and how these interact with multiple systems may require a kind of “mission control” center where retailers can see and control every activity across all channels.

5. Predicting your customer’s buying behavior

Predictive analytics in retail will enable stores to know, with a great deal of certainty, what customers are going to want and when. Predictive analytics tools, especially when combined with streaming analytics, offer retailers the ability to manage queues, customer expectations and inventories before there is an issue.

Finally, Bricks and Mortar retailers are battling to survive on their own.  Retailers therefore need to integrate both the physical and digital systems to prosper and grow during 2016. The next five trends that Bricks and Clicks retailers  should take note of will be discussed in a follow-up article.

Visit eBizplan for plans to integrate your physical retail shop with an online retail channel.