Día de Muertos Nichos are like shadow boxes, these usually come in all shapes and sizes, made of wood, metal, or anything else you can think of.
The only time I decorated some type of nicho was in an event using a ceramic template from Crafty Chica, it was fun and I still have it and use it in our altar every year. Since then I always loved looking at little nichos during Día de Muertos. I think of them as mini altars.