Leigh Middleton is the CEO and Co-Founder Six3.
A lot has been written about digital marketplaces – virtual spaces in which a market operates – and, similarly, about niches – narrow target markets. However, the two are rarely contemplated together.
Niche marketplaces have already proven to be a successful model for the likes of Airbnb, Etsy, Hotel Tonight, Uber, and Yplan by offering a focused user experience that is synergetic with the delineated audience requirements. But how do you keep this audience engaged and returning while building out both sides of the marketplace simultaneously?
A niche marketplace with a two-sided interest can be a very attractive business model with the ability to scale and capture a whole market, as we have seen, but there are a number of factors to consider when deciding upon and entering into a given niche.
By acting as both intermediary and curator you can not only match the buyers with the right sellers but also sculpt a unique, personal and relevant way for them to interact. Here are five ways to successfully start small.
1. Limit yourself
While there is demonstrable value in providing access to products that are otherwise difficult to obtain, it is through simplifying the user’s choices and asserting a high level of quality that your marketplace will build trust and loyalty.
As we have seen with Uber, who first launched using the exclusivity of luxury cars, the niche marketplaces that are going to succeed offer a limited set of options with a high degree of quality to time-poor yet quality-driven audiences.
The marketplace’s role here is as a marquee, offering a limited amount of space and housing only those sellers that meet its full criteria, in order to provide the best possible user experience.
2. Be subjective
A niche marketplace cannot function purely as an intermediary or enabler in the way that a catch-all platform can, so it is essential to build consumer trust in its comprehensive knowledge, expertise and authority encompassing its niche.
In order to position your marketplace as the definitive authority in your niche, you must impose your own set of criteria to build a community that reflects your ethos.
Like Yplan, which curate its own shortlist of the best events in town to host on the app, the marketplace must act as a reflection of the audience’s lifestyle paradigm, presenting the thoughtful curation that buyers don’t have the time to impose themselves.
3. Let your vendors sell themselves
In order to start building out your platform, it is key to first engage its dormant audience through your vendors.
Fundamental to a marketplace’s success is to build the platform not just around sellers with the right qualities to embody its ethos, but also those that have the potential audience to initiate momentum and start buying in to (and building) the platform from ground zero. Access to an engaged following is key in building initial traction with a participatory audience.
A key accelerator of Etsy’s community has been that they let the vendors act as evangelists for the platform delivering a focused marketing push to their respective networks, which offers value over volume.
4. Content is key
By operating within a niche, you already know your audience and have access to an active community, so make sure you are keeping them interested and giving them a reason to keep returning.
While technology is a key enabler and helps to facilitate growth and scale, using content to create additional value for users will lead directly to building an active consumer base.
Getting people to enter the platform is only half the battle; what is more difficult is keeping them there, whether that is with the intention of making a purchase at that moment in time or not.
Creating a smooth user experience is, of course, invaluable, as is the quality of the products that are available, but create engaging content and you can shape the audience’s understanding of those products and draw them into your lifestyle ideal through a compelling and digestible narrative.
It is in this realm that you can clearly and concisely assert the knowledge and expertise of yourself and the vendors that you have stringently vetted for the platform, building trust and accelerating the move to purchase.
5. Communication is a two-way street
In this model, the strategy has to have absolute focus on both the buyer and the seller, with each being crucial to success and having the ability to really drive sales.
Once you have matched your audience and vendors, shape a direct and personal way for them to interact in order to build ongoing relationships that will ensure customers return.
As we have seen with the growth of Airbnb and Etsy amongst others, this transparent communication is the path to trust, loyalty and return customers. With a focused audience, you can better tailor your product suit their specific needs.
What are some of your success methods for tackling niche markets?