5 ways small businesses can compete against big retail giants online - Technical.ly

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5 ways small businesses can compete against big retail giants online

Ecommerce exploded last year. Here's how to help your business stand out against the Amazons of the digital world.
This is a guest post by Joshira Maduro, a research analyst with LendingTree.

Amazon has spent the first part of 2021 embroiled in controversy. Beyond a bitter unionization fight, the company — among the world’s largest retailers — has also faced increased antitrust scrutiny, with opponents claiming the company’s practices are unfair and anticompetitive.

In many cases, small business owners are leading the charge.

Last month, Small Business Rising, an advocacy group representing grocers, hardware stores, pharmacies and more, called for increased antitrust regulations against massive retailers like Amazon. Among other demands, the organization called for the separation of Amazon’s retail business from the marketplace where it hosts third-party sellers. One owner of several hardware stores in the Washington, D.C. area told Bloomberg News she knows suppliers who are being pressured into selling on Amazon, despite issues with counterfeit products and rising costs.

As Amazon faces further criticism, small business owners are learning to face the big retail chains head-on, thanks to new strategies and new innovations.

New entrepreneurs are looking to stay competitive. Despite the pandemic, 2020 was a landmark year for entrepreneurs. According to a recent analysis, there were more than 4.3 million new business applications filed in 2020 — more than in any other year on record.

However, these businesses will need to get creative if they want to survive. According to the most recent figures from the U.S. Small Businesses Administration, more than 20% of all ventures fail after a year. In a post-pandemic world, that survival could rely heavily on one thing: how quickly these companies can establish themselves online.

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Vicky Wu, a marketing and advertising expert who specializes in working with entrepreneurs, said the majority of her clients were forced to make a drastic shift toward digital-first strategies at the start of the pandemic. Most managed to succeed and now, Wu said, they plan to retain those learnings — even after things return to some version of “normal.”

“It opens up so much more capability,” Wu said. “You’re not limited as much geographically, or maybe by time. It’s opened up a whole new market for them.”

What does that look like in practice, though? With globe-spanning giants like Amazon looming, how can small businesses make their mark and stand out online?

Here are five practical ways entrepreneurs can combat the big retail chains and establish themselves in the digital marketplace.

Don’t spread yourself too thin.

There are a million ways to get your name out there — but Wu’s advice is to cast a deep net, not a wide one. New entrepreneurs think that to be seen, they need to be on every platform, she said.

“They think, ‘I need to do email and I need to do Facebook and Instagram and videos and I need to do TikTok,” she said. “And all that does is spread them too thin.”

Instead of trying to be everywhere, try focusing your attention on one or two social channels. Once you grow a big following in one place, then it gets easier to establish yourself on other platforms.

Focus on the “right” customer.

Time, money and resources are precious when marketing a small business, so it’s crucial to use them wisely. The key to that, as Wu puts it, is to focus on the “right” customer. While attracting those customers without a Fortune 500 marketing budget has its challenges, it’s not impossible.

If you’re just starting out, direct a portion of your financing toward a more targeted acquisition approach — as in, using data to find the best customers for your product. Tools like Google Analytics, Facebook Insights, Hootsuite and other widely available programs can help with this, or you could take an online course led by some of the big social media companies. That knowledge will help you make sure the “right” people know all about your brand.

Don’t be afraid to make it personal.

One of Wu’s biggest tips: Embrace your brand. Don’t be afraid to lean into whatever makes your small business unique, especially when it comes to digital advertising.

“Talk about what makes you different — because that differentiation is what will make you stand out when compared to all of your other competitors who are also now online,” she said.

As Wu points out, this doesn’t have to be a specific product that makes you stand out from everyone else. It could be an ethical cause, a local angle or even an aesthetic. Entrepreneurs each have their own background and perspective, both of which should be used like the valuable resources they are.

Use your size to your advantage.

If the last two years have shown anything, it’s that change can come faster than you expect. Thankfully, small businesses are in a unique position to change on the fly.

“Small businesses have that ability to look at data and make the changes,” Wu said. “If what they’re doing isn’t quite resonating enough, they have the ability to quickly change their strategy to reflect what’s going on in their community.”

Wu often advises her clients to embrace change. If something isn’t working, they can look at the data, adapt and move toward a new strategy — it’s one of the big advantages of being small.

“The big corporations can’t move that fast,” Wu added.

It’s a technique that’s proven highly effective in the past year. In a McKinsey analysis on small business recovery during the pandemic, analysts found that adaptability was one of the key reasons that independent retailers were able to thrive.

Zero in on the specifics.

Americans want to support their local businesses: More than half of the respondents to a 2020 survey by ZypMedia said they’d rather shop local during the pandemic.

Most consumers want to help their community — the trick is helping them do it. Use your knowledge to your advantage. Collaborate with local restaurants, use region-specific references on social media, and craft advertising around landmarks or local sports teams.

All of these tactics will show your customer base that you understand their world. It’s an advantage massive corporations like Amazon could never have at their scale.

Companies: Amazon
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