Picking and Scaling New Ecommerce Niches

In The Boston Consulting Group’s Thinking In New Boxes, the core argument – naturally wrapped in 350 pages of management consulting excess – is that it’s fundamentally a waste of time to “think outside the box”. Once you step out of your metaphorical box, instead of having infinite ideas that are ripe for the picking, you actually just end up totally directionless in the face of infinite options. The author’s assertion – as the title suggests – is to instead create new boxes through which we can perceive familiar situations. 

The most illustrative case study in the book is about BIC, who at the time was a pen company that was struggling to innovate on its core product. Every attempt at a new product was limited to its “box” of writing utensils: pencils, coloured pens, ballpoint pens, etc, and so there was a clear ceiling to where the company could ultimately go. Naturally, they asked themselves to “think outside the box”; naturally, the exercise failed. In the spirit of “thinking outside the box”, it would theoretically be plausible for someone around the brainstorming table to suggest that they expand into the pizza business…or become a motherboard manufacturer…or, or, or. You can see how this quickly became a fruitless exercise. Instead, the consultants advised them to reconsider the “box” that they had placed themselves in. In contrast to seeing themselves as a “writing utensil” company, what if they defined themselves as a “disposable goods” company? In the face of the actual structure, the ideas now had a clear direction – which brings us to the BIC of today with disposable razors, lighters, white-out, and a whole host of quick-use disposable product lines. Thinking outside of the box gives you infinite options that are largely useless; thinking in a “new box” gives you fewer directionally useful options.

Though we’re as sceptical of management consultants as the next DTC marketer, this framework can also be applied when picking a niche for a new ecommerce store. Instead of trying to boil the ocean, focus on a specific area to fish. From there, when needed, introduce new product lines that are tangentially related to your core “box”. We’d wager that millions of entrepreneurs task themselves with “thinking outside of the box” every single day when in reality it’s a fruitless endeavour at any stage of a business. Spending the time upfront on choosing the right “box” (or “niche”) allows you to start and scale your business more thoughtfully.

Choosing your niche

Our minds and bodies are constantly processing thousands of pieces of information at any given moment, but it’s unrealistic for us to prioritise everything equally. Instead, our Reticular Activation System (RAS) is the function of the brain that chooses what information we’re conscious of, and what information we don’t call attention to. It’s why you never notice any red cars until you buy one yourself…and then you start seeing them around everywhere. They’ve suddenly become relevant information. To circle this tangent back to choosing your niche, like any art, it’s difficult to actually teach idea generation – but by putting in hours of practice, you can activate your Reticular Activation System and subconsciously be alert to new ideas. 

Think of finding your niche as a progressive set of smaller and smaller “boxes” of thinking until you strike gold. We’ll illustrate an example:

Box One: Apparel. I have experience in designing clothing, and so this is an easy place for me to start. Now I know that I can shut my “Reticular Activating System” off to all other potential business opportunities, like a skincare product or a supplement brand. I’ll only focus on apparel opportunities.

Box Two: Because of its relatively low barriers to entry, apparel is likely the most competitive ecommerce category that exists. So I need to niche down further. Since I know that “thinking outside of the box” to find a niche isn’t productive, I instead list my interests/hobbies to add some sort of structure to my brainstorming. The goal is to see if I can focus on a smaller, hyper-engaged market, instead of just selling clothing for everyone. I train in various martial arts, so I’ll start there.

Box Three: Martial arts for everyone is too broad. I need to niche down further – I’d choose Brazilian Jiu Jitsu, because I know the majority of people who practice it are hyper-invested in the sport.

Box Four: Brazilian Jiu Jitsu for everyone is too broad. Let’s focus on males for now.

Box Five: “All males” is too broad of a category. Everyone trains for different reasons – I need a particular group of men to build for. I have a few friends who train Brazilian Jiu Jitsu as an outlet for their anxiety, and so I’ll build a brand that specifically builds a community for these men. I’ll donate X% of profit to a relevant charity.

Ideas are everywhere – you just need to approach them with structured thinking. Once you have an idea, the next step is to test the market.

Vertical expansion

Once you’ve identified a niche market, you can dive deep and create products that provide value for them in targeted ways – even if it’s outside the original scope of your business. If we refer back to the “boxes” in the brainstorming above, we can take “box five” (my Brazilian jiu jitsu males who train to rid their anxiety) and match it with a new “box one” (currently “apparel”). A great example of this is Kinda Fit Kinda Fat, an apparel company for athletes who love to eat as much as they love to lift. After spending years designing apparel for their specific type of athlete, they realised that there was a gap in the market for their fans: supplements. They’re expanding vertically to offer new products to the same group of raving customers. 

Horizontal expansion

Let’s fast forward 10 years: let’s say that the above Brazilian Jiu Jitsu For Men With Anxiety brand has become an absolute mammoth of a business. It’s expanded into every possible geography, vertically in every possible way, and tapped the “box” dry. Like BIC and their writing utensils – where does it go from here? In order to expand horizontally, it would need to move from “Brazilian Jiu Jitsu” back a few boxes up back to “Martial Arts” – and begin the research once again from there. Perhaps “Boxing” is a sport that has a similar community of men with anxiety who’re also looking for an apparel brand that supports them. Every box is a new opportunity. 

Though this was originally written with new founders in mind, “thinking in new boxes” can be applied to any stage of a business. We’ve worked with hundreds of founders during our years in DTC ecommerce, and found that – as natural-born operators – we often get lost too deep in the weeds; I sell mattresses, and therefore every product iteration is just a different type of mattress. But when you see the world through the lens of “new boxes”, you quickly realise that by moving up one “box” of thinking, you’re actually not selling mattresses – you’re selling “peace of mind”. Now, your future product opportunities look quite different: weighted blankets, meditation retreats, sleep trackers…the list goes on. And just like that, you’ve opened up a new world of growth for your ecommerce business.

Conclusion

Whether you’re a new founder or the operator of a successfully scaled business, if you take some time to consider the boxes of thought that you’re currently sitting in, we’re confident that you’ll be able to find some interesting new opportunities to grow.