It’s never been easier to open your own retail store online. All you need is to find a decent set of products, build your website and you’re good to go. The trouble is there is some pretty big competition out there in the digital arena and one huge influence in particular.
The Amazon Effect is a real thing and one that all other retail businesses need to think about, wherever they are located in the world. If your small business wants to compete on a relatively level playing field, however, there are a few things you can do.
Response Time and Extra Costs
You may think that cheaper prices are the main driving force behind the Amazon Effect but it’s actually convenience. We’re more focused on how quickly we get our parcel when we order it online than the price. With packages such as Amazon Prime, the big retail behemoth does delivery particularly well. It can often secure your purchase for delivery the next day and for no extra cost on the postage.
How does your small business cope with this? It can be a challenge without the prospect of making a big dent in your bottom line. There are some creative solutions, however. If you are able to offer buy now and pick up from your local brick and mortar store, that can certainly help.
The trick for all businesses is to try and narrow the time between the moment your customer orders and when the product is actually delivered. Building a strong relationship with a courier or delivery service can help.
Become an Amazon Partner
If you can’t beat them, join them. Many smaller brands have their products on Amazon and have partnered with the big retail giant. This can have cost implications when it comes to selling your products and there are plenty of rules to follow but there are benefits too. Many consumers nowadays learn about new or smaller brands through a large retail source like Amazon.
The next step once you start selling this way is to try and find ways to build up visitors to your own site from your Amazon offerings.
Using Amazon to Drive Business to Your Store
You don’t simply want to be a passive partner to Amazon and become a tiny subsidiary of it. You should use this opportunity to build brand awareness and attract loyal customers who are likely to do business with you direct.
How do you do this?
First, you need to have a clear idea of your business branding. What is your brand offering potential customers and how is it delivering for them? The truth is that consumers are quite happy to use alternative retail sources if the brand resonates with them.
Your business needs to do a lot of work building its online infrastructure to do this, including engaging with customers on social media and creating an attractive website. But it can help to set you apart as an inviting niche supplier that really knows how to deliver on your customers’ needs. Put in a great support or help service for queries and you may find that consumers come direct to you rather than through Amazon.
A great way to open the door to your website for new visitors is to include discount codes for use when buying directly from your website in the packaging when users purchase one of your products via Amazon. The next time that consumer needs the same product, or a similar one, this may encourage them to shop on your website rather than using Amazon as a middle man. Ensure you list some of the other products you offer too, so consumers are aware of the range of items they can source from your company.
Got a Physical Store? Raise Its Local Profile
Many retail businesses have at least one brick and mortar store and people still like to visit these, especially for certain product lines. The key here is that the one thing online retail can’t offer is the experience of picking up and handling the merchandise.
The important issue is to focus on your local audience and ensure you get the marketing out there that delivers for these consumers. There are numerous ways to raise your local profile including holding special events and offering click and collect services.
There’s no doubt that overcoming the Amazon Effect is a challenge for smaller retail businesses. There are, however, ways to leverage this, raise brand awareness, and improve sales. Yes, it takes a bit of work and business savvy but that doesn’t mean your small retail business can’t compete and be successful in the shadow of one of the world’s biggest businesses.
Here at Neil Smith Accountancy, our professional chartered accountants can provide year end company tax and self assessment services, as well as expert advice to help you run your small business smoothly and profitably, whether you run an established company or are considering a new start up. If you’d like to see what we can do for your organisation, get in touch to arrange a free consultation.