A niche or niche market is a hyper-focused, targetable section of a broader market with its own needs, tastes, preferences, and identity that differentiate it from the more comprehensive set of markets. Defining a niche market helps brands gain a competitive advantage. Companies nowadays are increasingly focused on niche markets to better cater to the specific consumer demands, while competitors remain focused on fulfilling the needs of a broader audience.
For example, the “shoes” market is broad, but within that market, there are also shoes for “vegan” women, “plus-sized” women, “nurses”, and “transgender”. These all are niche markets within the broader market for women’s shoes.
Catering to the specific tastes and preferences that mainstream businesses aren’t fulfilling, brands are laser-focused on pursuing niche markets to build recognition, loyalty, and revenue with a largely-overlooked audience. Brands divide almost all markets of any discernible size into sub-sections according to things like:
- Price (high, low, luxury, moderate, discount)
- Quality level (premium, moderate, handmade, high, low)
- Demographics (age, income level, gender, education level)
- Geographics location (residents of a specific country, city, or even neighborhood)
- Psychographic data (values, attitudes, interests, and personality traits)
Niche markets are subsets of a larger market, although not all possible niche markets will be worth targeting.