Most consumer shopping happens in physical stores, not online. But some exceptional brands can only exist online. These exceptions highlight a neglected strategy for ecom brands to succeed.

While I’ve made my career in ecommerce, I need to be honest about its shortcomings. In many ways, buying products in stores is better:

  1. For in-store purchases, there are no shipping costs; consumers are their own fulfillment and delivery. This should be passed on to consumers in the form of lower prices.

  2. You can get a product in 2 days on Amazon but you can often get the same product in 2 minutes at a Walmart.

  3. Physical stores allow you to examine or try on products in person.

Ecommerce has grown tremendously in the past 30 years but is still only ~15-20% of retail sales. While buying online has some benefits–it’s more convenient, easier to compare prices and read product reviews–most consumers still prefer buying products in stores.

How can ecom brands compete? I think an under-discussed path is to identify niches where in-store commerce is impossible.

Here’s an example: I’m 6'6’’ tall and fairly thin. For basically my whole life I’ve found it incredibly difficult to find clothes that fit my tall and lanky frame.

Last year, I found out about a DTC brand called American Tall which advertises itself as “tall clothes designed exclusively for tall people.” I bought a shirt as a test and, for the first time in my life, it actually fit. Since then, I’ve probably made 10 other purchases (I have no relationship with American Tall in any way).

From what I can tell online, American Tall has about 50 employees and has raised no external financing and so is likely profitable. Why does it work as an ecom business when so many others have struggled?

I think it’s because American Tall has identified a consumer niche neglected by physical stores. AT men’s clothes are for guys 6'4’’+ and only 1% of men are that tall. And tall men are pretty evenly distributed across the US, not concentrated in any one place.

It doesn’t make sense for stores to stock clothes that fit this population–there’s just not enough of us in any given area. “Big and Tall” stores are generally for guys who are big and (somewhat) tall–not skinny and tall like me.

The beauty of ecommerce, though, is it can be economically efficient to offer a selection of products that do not make sense for any physical store to carry. American Tall sells products to the entire US and even though their clothes fit only 1% of adults, that’s ~3 million potential customers. You can build a really nice business on that customer base.

I know from personal experience that American Tall has found a consumer niche that’s underserved by physical stores. If you can identify one of these niches and execute effectively, I think you have a great shot at building a mid-size but highly profitable ecom brand.