Skip to main content

Ecommerce platforms like Amazon work hard to be the end-all be-all for consumers’ online shopping needs. Competing with companies like this when you’re a startup is close to impossible, but you might not have to, given marketing attribution. The vertical ecommerce definition is focusing on serving a niche really well.

Advantages of Vertical Ecommerce

With the booming ecommerce industry, entering the marketplace can seem daunting. But multi-product stores are plentiful online. Vertical ecommerce enables stunning product displays because you’re focused on optimizing your ecommerce website specifically for that one product.

As you evaluate next steps in developing your ecommerce business, here’s a look at the advantages and disadvantages of choosing to open a vertical ecommerce website.

Advantages

  • Advertising is less expensive – Luckily, advertising is less expensive with vertical ecommerce, you are targeting a niche, which means you can focus on a very specific audience instead of blanketing your audience. This means you can spend less and are more likely to get conversions from those efforts.
  • Trendy brands win – Think about some of the more recent vertical successes. You have Lululemon, which only sells workout clothes. It has become the thing to wear for athleisure. Brands matter in a specific vertical so when you aren’t trying to be all things to all people, you can become the sought-after brand for your niche. Consumers, especially millennials and Gen Z, are willing to pay for brands that show their status among their peers.
Scroll to Continue

Recommended Articles

  • Interface with your customers – If you can identify a niche that is lacking community, you can build a stronger brand. By being that connection for consumers, you not only help them find other people like them to build community, but you also get more insights and data into what drives their decision making. Think about FitBit. The product is all about community where you compete against your friends and build accountability. But the platform also learns what motivates its userbase and how to create new products that fill a need.
  • Know the trends and set the trends – When you focus on a specific niche, it’s easier for you to follow the trends in that industry. Not only that but you can be the trendsetter with the right innovations and product development. Either way, having one focus area makes this easier than the ecommerce sites that sell various products.

Disadvantages

  • Changes in trends – When you focus on one niche, you risk losing everything when that niche is no longer of interest. Think about video rental stores. The trend used to be that you would go to a brick and mortar store and rent out a movie, either a new release or an old favorite. Brands like Blockbuster were popular, and then along came the mail subscription rental service Netflix and then online streaming. Blockbuster’s business model didn’t fit the market anymore and it failed to adjust in a timely manner. The company had nothing else to fall back on and had to close its doors. While this is a brick and mortar example, the same is true for online sales through ecommerce websites. If you aren’t up on the latest trends and innovating, you could find yourself out of style and tossed to the wayside in an instant.
  • Difficult to grow – niches can be static as far as audience size. Depending on your niche, it can be a struggle to grow past a certain point because you’ve saturated that marketplace. The next step is to innovate new products that match your market and fill a need your consumers didn’t know they had.

While vertical markets are easier to enter because they serve a specific need, they are more susceptible to changes in trends and interests. The key to success is listening closely to your customers and providing an outstanding ecommerce experience.

Kayla Eric