When Is it Time To Hang Your Shingle In A Niche Corner?

If you are still wavering on the issue of going online, it might be time to think again. There are too many reasons to have an Internet-presence to let such a good sales opportunity pass you by. Going online doesn’t necessarily mean opening up an online shop, as Alex Shapiro explains.

You may believe that coffee shops and jewelry retailers have nothing in common, but in fact, they share more than you might think. Take Java behemoth Starbucks, for example. While you cannot get a cup of coffee from its website – at least not yet – the company maintains its site as a way of promoting their brand and offering information about their products and other services, which can be accessed online. You can find the nearest store location, checkout offers or refill your Starbucks card.

Jewelry storeowners who are still reluctant to go online could take a leaf out of Starbuck’s book. When it comes to online searches, it can be frustrating not to know exactly where a store is located or its exact opening hours. While some cities, such as New York, are built according to a grid system, other cities can have their streets arranged like a bowl of spaghetti. This makes guessing a store’s location a challenge, and a potential sales loss. When stores clearly indicate their hours and location, perhaps including a map on their website, they may not know that the customer used the information, but the lack of information can mean lost business.

 Take London Jewelers, a small chain of independent, high-end jewelry stores in suburban New York. The chain does not sell any goods on its website but it shows examples of the goods in their stores as well as directions, store hours and contact numbers. As a result, if a web surfer lives in suburban Long Island and needs to find a place to buy an anniversary present, they can easily find the closest store, how to get there and the range and styles on offer. Providing contact numbers also means the customer can call to make sure they have the type of gift they are looking for without having to traipse all the way to the store.

Stores can also use the Internet to offer customers services that go beyond showing just their range of merchandise. Many stores offering repair services regularly update the status of goods left for repair as a service to their clients. Even if the repair takes just as long, many clients are comforted by the fact that their items have been acknowledged as being received, the repair progress can be tracked, and they are "in the system."

Then there are stores that only operate on the Internet. Blue Nile has turned a tough economy into an advantage by its ability to cater to clients with its lower prices. Perhaps it may be a scourge for independent store operators, but the site succeeds by offering users a lot of information as well as a huge variety of jewelry items.

In his book The Long Tail, author Chris Anderson describes a successful business model for marketing that he dubs "the tail end." Essentially, the model relates to the one-time shopper, such as someone buying an engagement ring, although it can also relate to those acquiring different types of the same product, or earrings.

The model explains how startups such as Amazon, eBay or the Apples Apps Store can sell a large quantity of products even if there is a relatively small quantity of each item. It also explains why there is often one dominant player in a niche market, with the secondary and tertiary players languishing far behind. The reason, he says, is because they can not acquire the necessary leverage to make the business profitable. The leverage is expressed in the wholesale discount prices and processing costs.

While Anderson has developed his model in relation to online marketing, it can be relevant for other types of marketing as well. L.L. Bean has established its reputation for its catalogue service. A quality jeweler in a rural area can leverage its isolation into an asset by making the public aware that it