As in-store retailers focus on consumer necessities, specialty goods can be found online

Riverbend Consulting cofounder Lesley Hensell provides a look at ecommerce opportunities in the current economic environment.

person using laptop computer

(Photo by Christin Hume on Unsplash)

During times of inflation and sluggish economies like we're experiencing today, large retailers and grocers typically narrow their product offerings and prioritize consumer bread-and-butter items over specialty products.

But unlike previous slowdowns, consumers today can turn to online marketplaces like Amazon to find niche products from third-party sellers.

Inventory famine to feast

During the latter half of 2021 leading up to the holiday shopping season, retailers were struggling with supply chain woes and shortages brought on by the COVID-19 pandemic, making it hard to guarantee stock of certain products throughout their busiest time of year.

In the first quarter of 2022, those supply chain bottlenecks began loosening, and many of the products that retailers ordered (up to nine months prior) came rushing into their warehouses. In an ironic twist, many retailers now have too much inventory on hand, including Target and Walmart, who cited excess inventory in recent reports.

In response, Target announced that it is offering customer discounts so it can "right-size” its inventory for the remainder of 2022. This signals that it still has unnecessary items in stock, possibly holiday-related goods, last year’s fashions and specialty items. The retailer has to burn through those products to help raise cash and clear warehouse space to purchase the consumer staples so greatly needed for the months ahead.

While that’s a significant problem on its own, record inflation this year has created a bigger mess. This, combined with other geopolitical and economic events, are driving the U.S. and global economies toward a slowdown as consumers are hit by drastically rising prices across the board.

As a result, Target and Walmart have each noted rapid changes in consumer behavior over the past two months. As they "right-size" their inventory, these big-box retailers will err on the side of having enough basic items in their grocery and home sections versus taking a chance on specialty products.

The opportunity for online sellers

That leaves a potentially big opportunity for online sellers to fill any gaps in consumer demand.

To its credit, Amazon has become a proven business incubator for third-party sellers and brands, so it's always a good time to test and launch niche products in that marketplace. It also helps that today’s consumers are already primed to go online if items aren’t available in their local stores.

In addition, if the economy continues to sour, it would be wise for online sellers to diversify their product offerings if they haven’t already done so – especially if the seller is heavily involved in luxury items. They need to ensure there are some consumer necessities in their product mix.

At Riverbend Consulting, we see several product categories that may be worth consideration in the near future, including:

  • Sports/outdoors equipment
  • Kids sports training equipment
  • Supplements
  • Affordable beauty supplies
  • Private-label brands of popular items at a cheaper price

With specialty goods, it’s always a solid strategy to go after product ideas that you know. For example, in kids’ sports, many products came from parents who realized a need for their kids and created a product to meet that need.

There are also tools available that can help sellers evaluate potential products, how many competitors are in a given category, and if there is any value in entering that category. Two tools that come to mind include Helium 10 and SmartScout.

Whenever they can, sellers should also try to source from local suppliers to avoid any supply chain issues from overseas. Mexico is really hot right now, and many Mexican companies are looking for manufacturing work from the U.S.

If you’re looking for U.S.-based manufacturers, there are several good manufacturing directories that can help. Even your local chamber of commerce can identify manufacturers in your community. Don't underestimate local companies and organizations.

Online brands can diversify by entering retail stores

Another diversification strategy may seem ironic given that many retailers are narrowing their in-store selections, but if you’re an established online brand with favorable data (this is key!), you may have a good shot at getting your products on store shelves.

As retailers experience downward pressures, they're not going to take a chance on specialty goods that don’t have a proven track record. But an Amazon seller inherently has a lot of data at their fingertips, and if you have an interesting and winning product, this could be an opportunity for you.

There are companies such as Project Retail that help online sellers and brands evaluate, build a case and make connections in the brick-and-mortar realm to see if the retail store could be a reality.

Lesley Hensell is an Amazon seller and co-founder of Riverbend Consulting, where she and her team help other sellers solve critical business problems and grow. Learn more at

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