Two completely different animals, but both can be effective.
Large variety chains like a Walmart, Kmart and so on, all work because of variety. Very simple, the more products on shelves increases your chances of a sale. So while you have much more competition, your counting on numbers making the sales and that's no different to online sales vs bricks and mortar sales.
A niche product is a product that has remained undiscovered for the most part, so the competition is low to non-existent. This makes them hard to discover because you have to do the digging to try and find one, but can be rewarding when if you do because demand outstrips supply.
They are the essential philosophies between the two.
Of course if you could combine the two, listing a variety of niche products, then you may well have hit pay dirt BIG TIME. Unfortunately, finding golden Chicken teeth may be easier to do.