It’s hard to know how to compete with the big eCommerce giants. Here’s some strategies on where to start.
By Dan Maycock, Analytics Product Manager, GE Digital@DanMaycock
Amazon is no doubt taking over more and more of the direct to consumer space, causing retailers and other direct-to-consumer businesses to struggle. However, the bigger the company is, the harder it can be to stay nimble and respond to customers as well as a small business. The key is to break down the real advantages Amazon has, and consider where small businesses can maintain a competitive advantage vs. attempting to take Amazon head on and compete just on price.
1. Do Something with Your Data
Amazon is nothing if not a data-driven company. From their website, to their delivery services, everything that can be measured is measured. The thing is that if you were to peak under the hood at the tools and technologies they use, there is a good deal of proprietary metrics and algorithms. But there’s also tools and technologies small businesses can take advantage of.
One example is website analytics. Amazon measures everything on their website, from the items clicked on to the reviews left on their page. For them, it’s about the quantity of data allowing for very advanced models using tools such as machine learning & statistical modeling. Every business though, can plug their website into Google Analytics and get a ton of useful data for free. More importantly, there are classes and information on how to get the most out of Google Analytics so you can understand your audience and activity from several different angles.
This in turn helps you fine tune your eCommerce platform, and understand your audience better. Other examples would include setting up a customer loyalty program, so you can get better analytics around your customer’s habits, and using a Point of sale system such as Square that can give you better analysis around transactions. At my company, Equinauts, we help companies of all sizes understand their businesses better by analyzing transaction data then building analytics around products, customers, campaigns, and channels using data with customers of all sizes.
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2. Tailor Your Offerings
Personalization and flexibility are two key things large companies struggle to justify the cost for, as it can’t account for all the specific niches that exist. However, finding ways to tailor what you do to the audience you’re focused on can help boost your bottom line and create a more loyal customer base. If you are a small business, with a steady stream of regulars, you can tailor what you do much more than a large competitor which means making your services or products stickier.
If you’re a clothing retailer selling online, you need to see who is buying your clothing and what you can learn about their interests. If you have a cluster of regulars around a high school, do an informal survey to see if they’d buy clothing branded with a mascot or in the school’s colors and see if demand would justify the cost. Perhaps maybe do a “pop-up” store around the stadium, and a promo for customers already purchasing your products. If you sell pottery and glassware, consider the materials you use and incorporate a story catering to your customers tastes and interests vs using materials that just look nice.
There’s a good deal of flexibility in what you offer and sell as a small business, but making it something that is tailored is going to have a stickier appeal than buying a generic version of the same thing online. Just make sure to also consider customer’s price sensitivity if it means a large price leap.
3. Foster a Connection Between You, Your Company, and Your Customers
Every business owner has a story, and a reason why they do what they do. We see this in how popular Shark Tank has become, which tells the story of the individuals along with the products themselves. This isn’t a coincidence though. I grew up in a small town, and saw the impact that knowing the owner had to making buying decisions. Are you out in the community in which you’re selling your goods? Do you get out from behind the counter and get to know the folks walking around your store? If you’re just selling online, do you have information about yourself and perhaps a blog or other source of information telling the story of who you are, and why you do what you do?
Building a personal connection with your customers, as a small business can be invaluable because it creates the kind of intimacy a large company can’t compete with. If it comes down to just the price, of which the Walmarts and Amazons of the world build their businesses around, then it’s going to be difficult to compete. However, a product someone is willing to pay for because they have a connection with the business and/or owner is going to be the real competitive force..