Niche Market Examples That Will Grow Your Store

Jay Lehman established his hardware store in 1955 in Kidron, Ohio, smack dab in the middle of Amish country. Instead of trying to sell power tools to his neighbors, famously known for their simple lifestyle and their disdain for technology, Jay shaped his store to serve his market. He established his niche market, which is more main stream in Kidron, by selling hand tools, kerosene lanterns, butter churns and hand-cranked grain mills.

“If you think building a niche business can’t work, think again,” Glenda Ervin, vice president of marketing for Lehman’s and Jay’s daughter, told Entrepreneur magazine. “The secret to a successful niche business is realizing that it isn’t about you. It’s about the customer.”

Lehman’s Amish customers want hand tools: hammers, saws, planers, and repair services for them.

For Lehman’s, the niche market example has led to a secondary niche when motion picture companies come calling, looking for old-fashioned tools and other movie set props. Lehman’s products have appeared in movies such as “Gangs of New York,” “Open Range,” “Pirates of the Caribbean” and others. The store also reaped unexpected benefits from the Y2K scare as people purchased non-electrical appliances and tools. “Preppers,” people stocking up for massive power outages or societal calamities, are also regular customers.

Hooten’s Hardware of Emory, Texas is another example of wildly successful niche marketing. Kirk Reams, wrote in Hardware Retailing that when they were looking for a unique niche market example, one of his employees suggested stocking garlic-roasted chip dip. Reams initially didn’t like the idea, comparing it to the have-it-all mentality of Walmart, but after giving it a go, the store now has a popular niche market with its wide variety of chips and dips, in addition to wood chippers and vacuums.

What is a Niche?

Let’s first define “niche.”

The word is derived from the Latin word for “nest.” According to Merriam-Webster, as a noun, it is: a place, employment, status, or activity for which a person or thing is best fitted. As a verb, it is: a specialized market. It retail, that description could include products or services that set a business apart from its competitors.

While choosing a niche market example isn’t really that hard, finding one that is profitable sometimes takes some work. Ad Age says it’s best to find the smallest, narrowest possible niche.

How to find your niche:

Big Boxes do Niches, Too

To see the popularity of niche markets, you don’t need to search hard. Big-box retailers such as Target and Walmart have attempted to create their own niche market examples by purchasing or launching brands to appeal to shoppers looking for something a little more chic than past offerings.

Target, or “Tarzshay” as it is becoming known for its new lines, has dropped staid brands like Merona and Mossimo, and replaced them with Goodfellow & Co., A New Day, Hearth and Hand, and Magnolia. Likewise, Walmart has added Lord & Taylor, Bonobos, ModCloth, Moosejaw and ShoeBuy to grow its customer base.

Searching for a Niche

“Finding niches can be exciting, a little nerve-racking and, unfortunately, risky. I like to say finding the right niche is more an art than a science, because the reality is that you can do as many demographic studies or competition shops as you like, but you still have to take a risk when you put a niche in a home improvement store,” Reams says.

For Reams and store owner Lance Hooten, focusing a large section of their store on chips and dips might have been a stretch, but it turned out to be both marketable and profitable. Their focus on snack food led them to stock more kitchen items. And they did it without turning into Walmart.

Their specialty, however, takes them a little outside the realm of the typical hardware retailers. They can’t find their niche market products at the regular hardware dealer shows.

“We find a majority of our niches through trade shows, mostly because shows make it easy to compare different products and find new ones in a short period of time,” Reams says. “What I suggest retailers do, however, is not limit themselves to just their biannual distributor markets. Don’t get me wrong—I found some winners at these markets, but I also have several members of my staff go to different out-of-the-box trade shows, such as the Kitchen and Decor show in Dallas.”

Location, Location, Location

Niche market examples don’t necessarily have to stray very far from hardware’s hard lines to be successful. And they can take a que from customer needs in their home markets.

Rylee’s Ace Hardware in Grand Rapids, Michigan is a classic example. It has made knives, one of mankind’s oldest tools, a specialty, stocking more than 900 types. That focus on cutlery led to more kitchen items and products that appeals to women, adding to the niche.

Carhartt work and outdoor clothing has become a successful niche market example for many hardware stores. Guns and ammo, fishing equipment and licenses, and camping and hiking gear and apparel isn’t much of a stretch for a niche market example in areas where outdoor activities are popular.

Taylor Do It Best Building Supply in Eastpoint, Florida found its niche market example in saltwater sportfishing gear along with marine and beach products. Another brilliant niche for Taylor’s is hurricane shutter installation.

The Ace Hardware in Pocatello, Idaho specializes in camping, hunting and fishing gear and apparel, and adds beer and wine, making it a one-stop shop for outdoor recreation near the Snake River.

Brown’s Do It Center in Goodrich, Michigan, has an archery shop with a range, and paintball supplies along with its outdoor offerings.

John Austin and Sons Ltd, in Kinmount, Ontario, Canada, features custom-built docks and kayaks.

Pet and livestock products are often a popular niche market example for rural hardware stores.  Many rural hardware stores routinely stock cattle, horse and chicken feed and supplies. Wild bird houses and seed blends have become popular sidelines in recent years.

Kortendick Ace Hardware in Racine, Wis., adds dog fencing systems to its pet supplies. Wise Do It Best Hardware in St. Clair, Michigan, has tropical and freshwater fish and supplies along with its traditional lines. Kelton’s Hardware and Pet in Murfreesboro, Tennessee, specializes in high-end pet products and horse feed, and adds a self-serve dog wash to attract pet owners. And Powers Do It Best Hardware in Beaver Island, Michigan, offers veterinary services along with its pet supplies.

Other cool niche market examples:

Macro Niches

Make Your Niche Work

Lynda Falkenstein, who penned “Nichecraft: Using Your Specialness to Focus Your Business, Corner Your Market and Make Customers Seek You Out,” offers a seven-stop process to developing a niche market example.

1. Make a wish list. Identify the geographic range and customers you want to target. The trend is toward smaller niches.
2. Narrow your product line as much as possible, and it should be something you’re passionate about. “Your niche should arise naturally from your interests and experience. For example, if you spent 10 years working in a consulting firm but also spent 10 years working for a small, family-owned business, you may decide to start a consulting business that specializes in small, family-owned companies,” she tells Entrepreneur.
3. Describe the customer’s world view. Look at the world and your store from the customer’s perspective and try to identify their wants and needs.
4. After steps 1 through 3, a niche market example should start to form. Falkenstein says a good niche has five qualities: It fits into a long-term vision; Customers want your products; It’s carefully planned; It’s one-of-a-kind; and it evolves which ensures long-term success.
5. Evaluate your niche market proposal against the qualities in Step 4.
6. Test it by offering a free seminar or sample newsletter to potential customers.
7. Go for it. Putting a plan into action is the hardest part, but if you’ve done your homework, it’s less of a risk.

Niche market products, by definition are somewhat unique, but adding them to a store with proven product lines like hardware can differentiate a business and set it ahead of the store down the street.