The needs of today’s businesses are different than what they were before. The market competition has increased to an unprecedented level. And online businesses have to adopt different strategies to lire their customers. One of the most effective ways to reach out to a customer is to personalize the experience. But, that can only happen when you know about the market and the king of customers in it. Vertical and horizontal markets are two popular kinds of markets with their own category of products.
When you know the market better, it is obvious that you will have a better understanding of the customer. And this ultimately reflects in your overall business. A customer centric business has an altogether different approach. They are obviously more sensitive to customer behaviour. In addition to this, they also carry out their business activities prioritizing the customer.
Identifying the Right Market
The point is that the more information you have about the customer, the better you can personalize your services. And this is what you garner when you know about vertical and horizontal markets in detail.
Whether you’re just starting an online business or running it for sometime now, the knowledge of vertical and horizontal markets is fundamental. But, in spite of this, you might not have heard about this. Moreover, when you already have plenty of things to worry about like your inventory, customers, suppliers, what does this new piece of information add to your business?
The idea is that the knowledge of the market has a significant effect on how you shape your business. It helps you dive down into questions like-
- What kind of products should I be selling?
- Which segments of customers am I targeting?
- How should my marketing campaign align with my market?
- Who is my ideal customer?
- What kind of inventory suits my business- seasonal or evergreen?
Knowing these can help you distinguish yourself from the crowd and establish a better reputation. Because today’s customers don’t want businesses to address their expectations on a personal level. For example, someone might be looking for a professional laptop online. And you might be selling good and cost effective laptops. But, none of this will matter until you align your message according to the customer’s needs. This means that you have to clearly say to them that you are selling professional laptops that fit their needs.
But, don’t worry if identifying the kind of market seems challenging to you. We’re here to help you along the way. Read on to find out everything you need to know about vertical and horizontal retail markets.
Horizontal Retail Market
The very idea of the horizontal retail market is to appeal to all. Think about a horizontal line. It spans consistently throughout the surface. Hence, the name of the market.
When you are a seller in the horizontal market, your products appeal to a wide range of customers. In other words, either you sell some of the popular best selling evergreen products. Or you sell many different kinds of ites on a single platform. If you are looking for an example, go no further than Amazon.
As you already know the logo of Amazon is more than enough to tell you that it sells A to Z of products in its store. This is basically true. Amazon has so many sellers on its marketplace, that it sells to millions of customers across the globe. Be it apparels, industry tools, furniture, beverages, food or groceries. It tops the ecommerce category in various segments.
A lot of online sellers who cater to the overall needs of the customer are selling in the horizontal market, even if they are not familiar with the term. They love to retain customers for all their needs. And offer a complete solution no matter what their demands might be.
Advantages of Selling in the Horizontal Market
Both vertical and horizontal retail markets have their own features. Here is how you benefit if you are selling in the horizontal market segment.
Wider Reach
You obviously get to reach out to more customers. When you are selling the A to Z of products that the customers need, your target customers are much more. You are looking at people, who do not want to go to 10 different stores to purchase 10 different products. Instead they are looking for one stop solution for all their needs. And in today’s world, almost every customer wants that. The only condition is that you must offer qualitative products and attractive prices.
Customer Satisfaction
When a customer can buy multiple products from a single platform, they enjoy the shopping experience. They don’t have to bother shopping at different platforms. And if you are able to establish a good reputation with customers, there is nothing like it. Today, a lot of people shop from Amazon rather than some other website even if the prices are lower at the other store. This is due to the customer satisfaction level and trust in the brand.
One-Stop Shopping Platform
Being a one-stop shopping platform has several perks. First, it helps you build your brand. You can proudly tell your customer that you have everything they need for their home. This in their ways also means providing value to the customer. So, you care for their needs so much, that you have different categories of products listed on your platform. And all this is solely for the purpose of your customer’s convenience.
Cost-Effective Products
Cost effective products is one of the reasons why customers shop online/ ecommerce websites claim to provide great discounts, something that is often hard to find in retail stores. Therefore, when you are selling a wide range of products, you can provide products cost effectively to your customers. Because you’re selling a variety of products, you can adjust your profit margins strategically. If there’s one product that your competitor is selling at a lower price, you can compete with them. The lowered profit margin can in the meantime be adjusted onto some different products.
Effective Offers
Both vertical and horizontal markets have the advantage of ecommerce offers. You get to create a plethora of offers throughout different categories. The added advantage in the horizontal market is that you get to combine different products together at an effective pricing. For example, you can offer 10% additional off when customers buy their entire monthly supplies from your store.
Vertical Retail Market
Next comes the vertical market. Vertical and horizontal markets differ in the product categories they target primarily. In vertical markets, you sell a niche product. Your only aim is to establish yourself as the industry leader. When you sell in the vertical markets, you basically appeal to the customers who are looking for a specific product.
In other words, if you want to be called the specialists in any niche, you should try selling in the vertical markets. One of the biggest examples of this is the Google Scholar search engine. If you are a researcher or likes to read academic papers, you’d open the portal. Therefore, it specifically caters to the needs of that particular market segment.
Advantages of Vertical Markets
Vertical and horizontal retail markets enjoy their own advantages. However, in some aspects, vertical markets are better than others.
Value to the Customer
If you truly want to provide exclusive value to the customer, the vertical market should be your go to area. Because this is where you establish yourself as distinct and unique. By providing the value to the customer you make them feel that you know what you’re doing. You are the experts in the category, therefore, you have more than enough knowledge of the product. As a result of which you can provide the best options for the customer needs.
Established Expertise
Obviously when you’re good at selling one niche product, you establish your expertise. Customers know that when it comes to your brand, you are the experts in a particular product. For example, when people talk about Maruti, they know that they are the car experts. The same goes in other fields.
Less Competitiveness
In niche areas, the market is less competitive. Because it takes a lot of efforts in mastering something, very few are able to do it. This eliminates the unnecessary competition. So, if the customer has to purchase automobiles, they will not go to Amazon. They will search for brands with areas of expertise in automobiles. And that’s where your business will come into the picture.
Conclusion
Vertical and horizontal retail markets have their own advantages and disadvantages. Most sellers find it easy to sell in the horizontal market. No doubt that the competition is tough, but it is always an evergreen area. On the other hand, if you are targeting a vertical market you need to put in efforts. And don’t worry, the returns will be totally worth it. Just make sure that you partner with a reliable logistics platform like dash101 that helps you ship effectively at the lowest costs starting Rs 23/500 gms.
