Updated: Aug 28, 2018
In encouraging more people to shop locally, it helps if a clear point of difference compared to shopping online or in other towns can be offered. Having a niche offering means that more energy can be poured into one particular area and hence provide a distinct reason for people to shop local.
If the niche is a product or service, then there is a clear advantage in encouraging locals to shop locally, as they are being offered something that may be hard to find elsewhere. However, this is also dependent on the assumption that there is a big enough demand for the niche.
The niche doesn’t have to be a product or service though. The niche may be based on other things, such as a unique shopping experience or exceptional customer service. Anything at all that can be delivered that is distinctive and has a strong enough demand can be an effective niche.
As a business community, a collective niche can also be created, be it across multiple product/service categories that have a binding element, or within a certain category. As long as each business isn’t offering the exact same niche product or service (which would over supply the market), then this can be an effective group strategy.
Of course having a niche offering doesn’t mean that this has to be the only product that you supply. It may not be sustainable to risk an entire business on one niche product or service. In this case, the niche offering can be used as a point of difference to attract customers, but then a constant revenue stream is maintained off other goods.
On the flip side of operating in a niche, is diversifying the product or service delivery. Depending on the industry operated in, it may not be possible to just operate in one category. In my experience, many businesses, particularly in smaller regional areas, have said that they had to expand their business into other categories in order to generate enough revenue for the business to be sustainable.
So think about what you could possibly do in your business to create a niche offering. Is their demand for it, does it fit your current product offering, is it sustainable and does it give you a unique point of difference? If you can answer yes to all of these questions then you are one step closer to creating your niche.