Niche marketers get big returns online: Internet Retailer Conference

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SAN JOSE, CA - When NBC's Saturday Night Live ran a sketch titled "The Scotch Boutique" about a specialty store that sold only scotch tape, it was just a joke. But e-commerce specialists at yesterday's Internet Retailer Conference and Exhibition may have had the last laugh.

In the session titled "The Scotch Boutique: The Web is Made for Niche Retailing," a panel asserted that it is niche markets that drive Web sales.

"The Internet has turned this skit on its head, " said Doug Nielsen, president/CEO of NetShops.com. "I think it's pretty amazing that a company online selling light bulbs can do $11.5 million in sales. What has the Internet done to make niche marketing buyable? The fact that you can be open 24 hours a day and open for everyone around the world changes everything."

NetShops.com owns and operates 150 stores online including dartboards.com, benches.com, jewelryboxes.com hammocks.com, barstools.com and porchswings.com. NetShops' stores include product reviews and feature specialty products that focus on very niche markets. The firm chooses what stores to run based on attributes of specific categories.

The most recent store, ironically, is tapeboutique.com, that specializes in scotch tape.

"We are retailers in the business of merchandising and aggregating the demand for the products," Mr. Nielsen said. "The Netshops model is to own and operate stores where we think we can add value, where we know the products. "

Ritz Interactive has developed its own user niche markets by capitalizing on the shift to digital imaging and the subsequent rising need for paper and digital printing services. The result according to Fred Lerner, CEO of Ritz Interactive, is a network of e-commerce Web sites.

This model has led Ritz Interactive to look at other niche markets based on its customer needs and the firm has gotten into camera related online stores like RitzCamera.com and WolfCamera.com and beyond with sites like Boatersworld.com and Fishingonly.com.

"We are constantly looking for niches," Mr. Lerner said. "Our plans are to find new niche products, brands and markets and to grow organically and to continue our growth through acquisitions."

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