Narrow Focus, Big Success — the hidden power of the niche

In today’s media landscape, consumer behaviours and trends evolve at an accelerated pace. In the past, distinct groups were easily identifiable — think of the clear divide between punks and preppies. Now there is a blend of once-disctinct groups into a dynamic web of interconnected subcultures. Styles, codes, and trends now transcend traditional boundaries, influenced by the constant exchange of ideas across digital platforms and global networks, creating a fluid and ever-shifting cultural tapestry. “If you try to appeal to everyone, you end up reaching no one” rings truer than ever. To ensure lasting success, brands must adopt new approaches, focusing on building emotional connections and establishing an affective bond with their audience. This means creating a concrete point of differentiation that resonates with people’s needs, boosting brand recognition and fostering familiarity. In doing so, brands can offer value beyond a purely functional relationship with their audience.
The fashion giant H&M appears to have embraced this strategy. After a period of declining sales, brand erosion, and leadership changes, H&M opted for a brand refresh — or as they call it, a “re-ignition” — centred on music and culture outside the mainstream. Following a relaunch of their Instagram channel, H&M shifted its campaign focus to emphasise cultural relevance over the fame or reach of its ambassadors. For instance, the campaign featured Sage Elsesser, a skateboarder, model, and musician known as a member of Supreme’s Skate Team — a streetwear brand which is a trailblazer in niche marketing and achieved cult status through collaborations with underground artists and brands. Other talents in the H&M campaign included Sega Bodega, Charli XCX, and Arca, all artists with near-cult followings for breaking mainstream conventions with their progressive, avant-garde sounds. This selection arguably aimed to refresh H&M’s somewhat diluted brand identity in 2024. As H&M’s new CEO, Daniel Ervér, states in an interview with Vogue Business: “You cannot do everything and be credible. That alone is a shift.”
H&M is not alone in recognising and acting on this transformation. More brands are acknowledging the potential of targeting smaller, more specific audiences through niche marketing. A 2023 Highsnobiety report found that 63% of early adopters in the fashion category (so-called cultural pioneers) say their aesthetic preferences have become increasingly specified, and 71% appreciate branded content or entertainment that includes subtle, niche cultural references. Successfully engaging this consumer group can create a spillover effect, as 81% of early adopters say they influence others through recommendations.
A striking example is the before-mentioned Supreme. By focusing on a seemingly small target audience of skateboarders, Supreme grew from a once subcultural niche into a global brand generating $538 million in annual revenue. What can other brands learn from this? What makes niche marketing more than just another LinkedIn buzzword? Several factors are critical.
Psychological vs. Demographic
One crucial aspect lies in shifting focus from demographic factors (age, occupation, location) to psychological needs (values, aspirations, sense of belonging). This deeper connection enables brands to craft marketing strategies that align with the mindset and lifestyle of their niche, fostering stronger loyalty. For example, challenger smartphone brand Nothing has built a lifestyle universe within a performance-driven tech landscape. They launched a fashion line, hosted creative product events centred on music and art, and even introduced a “Glyph Composer” app, allowing users to create beats on their phones, and, hence enabling self-expression through the product. These efforts have boosted the brand‘s cultural relevance, positioning it beyond a tech company. As a result, in the first half of 2024, Nothing became the fastest-growing smartphone brand, with a 567% year-over-year sales increase.
Authenticity vs. Opportunism
Credibility is a cornerstone of niche marketing. A brand’s initiatives must feel authentic and aligned with its core positioning while resonating with the chosen subculture — the sweet spot between the inside and outside. Inauthentic efforts are quickly exposed by the community. IKEA exemplifies this balance with its collaborations, such as partnering with ASUS’s Republic of Gamers sub-brand to enter the gaming space. The partnership stayed true to IKEA’s mission of making everyday life better by democratising the gaming experience through affordable furniture designed for gaming setups. This approach created a win-win for both IKEA and the gaming community.
Relationships vs. Transactions
Successful niche marketing contrasts with overtly sales-driven messages, prioritising authentic relationships with the target audience. The key is to provide meaningful value to the community without expecting immediate returns. For example, New Balance’s partnership with streetwear community The Basement extended beyond a single collaboration sneaker. After their initial 2021 release, New Balance and The Basement organised annual soccer tournaments, music events featuring relevant acts, and other brand activations, such as offering free sneakers with magazine purchases. These initiatives foster a connection that can potentially transcend beyond the niche, as early adopters within subcultures often act as trendsetters, spreading their preferences and values into the mainstream.
Niche Marketing as a key to long-term success
The principles of niche marketing — focusing on psychological aspirations, authenticity and building long-term relationships — are by no means revolutionary for branding but are especially critical in niche markets. Consumers in these smaller, specific audiences tend to be more discerning and sensitive to messaging, requiring precision and consistency in execution. Brands prioritising these factors not only successfully engage their niche but also benefit from the trendsetting potential of these communities.
From one perspective, by fostering the growth of niche segments, brands enhance their authenticity and credibility as the values of these subcultures shape their image. From another perspective, this strategy facilitates the flow of creative and innovative ideas from the niche to the mainstream, sparking new trends and positioning brands as catalysts of cultural change.
While this strategy demands effort — thorough audience research, agile planning, and continuous adaptation to evolving subcultural values — it is well worth it. Brands that embrace niche marketing unlock sustainable growth and the opportunity to lead cultural movements.