How to compete with big e-commerce brands as a small online retailer

April 5, 2018 • 11 minutes

Kate Palanchuk
Kate Palanchuk
Content Marketer at Poster POS. Kate digs deep into the layers of new technologies and trends in the restaurant business to provide the best content for the blog readers.

Many small shops can’t take the competition from large e-commerce brands, and give up after a few years in existence. Of course, it’s difficult to coexist with giants but if you build your business astutely it’s definitely possible. When retailers try to compete with huge online stores, they often concentrate on low prices, forgetting the most important thing—good service. The path to success basically means succeeding at every level, but especially focusing on the quality of customer service. To run a profitable gift shop, deli, grocery or any other small local shop, you should do everything to ensure that the customer has a positive experience. Large retailers offer low prices and a huge range of products, but small retailers have other advantages which should be emphasized so customers will keep coming back to you.

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Don’t be afraid to be small

The difference between small and large online retailers is the same as between a small bakery with catchy name and McDonalds. The bakery means personal acquaintance and a special attitude, while a supermarket has a homogenized, standardized approach. It is very important to understand your competitive edge because just opening an online store doesn’t mean anything to a huge online community unless you offer something special. Why should people visit your online store? You must answer this question for yourself. Is it a unique product, a unique price or a unique service? Everything must be done to be more convenient and clearer for your customers so you will differ advantageously from the major players.

  • Create your «About us» page. Put in a short brand story, introduce the team and tell customers about your concept and philosophy (if you have one). Prove your genuine, personal interest in the store theme. For example, if you sell fishing tackle show customers your passion and involvement as an avid angler.

  • Pay attention to feedback. Ask each customer to rate your store’s service and leave a comment. Over 70% of customers read other shopper’s reviews before making online purchases. Keep them on the Reviews tab or use a widget on the website’s main page, so everyone can see the experience other shoppers have had. User reviews have a positive effect on conversion rates and are a vital component of any online store.

  • Provide maximum information about products. Emphasize the fact that each item of the range was selected after careful analysis and that you only sell high-quality products.

  • Try to approach each client individually. People appreciate you putting gratitude postcards or something similar into the package as a nice gesture. Offer personal bonuses to customers, communicate with them personally, offer additional products/services based on their previous orders. In other words, personalize their experience on your website.

Build a strong e-commerce SEO strategy

SEO (search engine optimization) of an online store is basically a set of actions aimed at ensuring that products pages are displayed in the top 10 on a search engine so customers will find it faster. SEO methods that work for small online stores do not necessarily work for big e-commerce projects. If your online store offers the same products as large e-commerce giants, then perhaps SEO will not achieve the result you expected. But where your products are unique and you only have a couple of main competitors on the market, then it makes sense to spend time and effort optimizing your online store. There are two options: consult an SEO specialist or do it yourself. When you start an online store SEO promotion, first you need to determine viable keywords that potential customers might use when searching. So you need a tool that generates ideas for keywords and analyzes their effectiveness, for example, Ahrefs, SEMRush, Moz, etc.

When you have taken your first steps, you need to optimize the product categories and product pages, and use internal linking to transfer the page load you have collected. The right internal linking can help product and category pages to rise in the search engine. An online store itself is rarely able to generate plenty of backlinks organically. You can try to get links from popular trusted sites, manually post press releases, paid and free articles in the media, appear on a partner list on supplier websites or on the developer’s portfolio, etc.

Because of high competition in the market for goods and services, it is rather difficult for a small business to choose the right marketing or advertising channels. If you are the owner of a local business, it is especially important to use a local SEO, which helps to achieve higher profits within your state.

Create a convenient customer service

Every entrepreneur deserves a reliable POS system that takes into account specific needs of their business, say, a gift shop POS system, or a candy store POS system. Offering customers a convenient service, you shouldn’t try to immediately implement complicated big store solutions. It is more rational to improve your business step by step.

Don’t forget that online and offline customers belong to different consumer categories. Even when we are talking about items that can be bought anywhere, an online store is more for those who want to save time. Convenience means fast, reliable shipping, the ability to see and try on an item and return it if it doesn’t fit. While the store continues to gain momentum, these services require a large reserve of financial strength.

Another great advantage is the option to pay for purchases online. This is very convenient for customers but brings additional costs (Internet acquisition provider charge). In most cases, this addition can be included in the product price. However, in some retail sectors with low margins and stiff price competition (computers, electronics, etc.) you need to be careful with pricing. Even a small price rise can lead you to losing buyers.

Use technology to control your business

Today in the 21st century it is already self-evident that entrepreneurs are introducing more technologies to make business management more coherent. For example, there are many cloud POS systems that include CRM, inventory and financial management, sales statistics, etc. all in one place. The range of programs varies from the cloud and heavier, more complex solutions for large players. As the business grows, you can change and add certain features and decline others. Choose a solution that’s perfect for you and take maximum advantage of it.

Add expert opinion

Some consumers prefer to buy in small shops, where they will also be given a number of useful tips. But how prove your qualifications online when there are no consultants beside the buyers? Here are some steps you can follow to announce your status as an expert on the Internet:

  • Blog. In addition to the obvious advantages of SEO, a blog is a place where you can share useful, informative and attention-grabbing content. Include in your content plan the latest trends in the retail business, «How to…» and «TOP best…» kind of articles. They work pretty well for SEO optimization, too. Expert opinions may also attract a new audience to your website.

  • FAQ. If the specifics of the products you are selling suggests a number of typical questions for beginners, create a section of frequently asked questions. This combines SEO, attracting an audience, and demonstrating your expert knowledge.

  • Video. Sometimes just a photo of the product may not be enough and customers will want to see what it looks like and how it works in real life. If the products are appropriate, then make a demonstration video to show more of their functions and advantages.

Support your local charity

Raising money for the needs of orphanages, perhaps, and individuals who need help is very important for a socially responsible business. Show that you work not just for the money and people will appreciate this. Let’s see what you can do:

  • Targeted Assistance. Find a local charitable foundation to support and donate a certain percentage of the store’s profits, or provide targeted assistance to specific people who need it.

  • Inform your customers. Create a separate page on the store’s website and publish relevant information: progress, events, news, reports, statistics, etc.

Big e-commerce brands engage in charity and have far greater opportunities. Therefore, try to work at a more local level and show that you care about real problems. Set up a promotion on a certain group of products and let people know that a percentage of sales will be donated to the good cause. The main thing is to show that you are giving real help to real people and real foundations.

Control your expenses

Every online store should think about profitability and how it will cover its costs. This can be achieved through a clear assessment of all expenses as well as measuring separately the costs of a single operation. You need to understand how much you spend on attracting a single customer, serving the customer, how many visitors you convert into buyers, how many orders you receive, the total cost of a single transaction, how much you earn, etc. And always keep everything under control:

  • Suppliers. From time to time review your contracts with them, raise the issue of reducing supplier prices, and search for more profitable options for your business.

  • Domestic expenses. Make a list of your expenses each month and see what could be eliminated next month, where you can cut back. But none of your decisions must affect quality, you must be reasonable and practical.

  • Product margins. Mark-ups for products must depend on all the attendant factors (popularity, cost of procurement, complexity in terms of delivery, ability to encourage further purchases).

Use social media

If you are an online retailer, you cannot afford to be inactive on social networks. 75% of people admit they buy something simply because they saw it on social media, and 90% of people say they will turn to social media if they need help to decide on a purchase. Social networks bring about 9% of the income of a business and by 2022 this indicator is expected to reach 22%.

Which social media platforms to choose and how to use them always depends on the business type. Fortunately, social networks give unlimited opportunities for creating an individual campaign to reach the desired audience. People have become more impatient than ever and today’s market is aimed at customer convenience. This is not surprising because now we have literally the whole world in our pockets. Notifications pop up immediately right on the gadget screen, the package can be delivered in a few hours, the food can be delivered directly to the apartment. So why get het up if the Internet makes things faster and easier?

As you can see, while competing with major players is difficult, nothing is impossible. Speed, flexibility, personal approach and smaller appetites are definitely on the side of small online retailers. Use your advantages to the fullest and you will be able to win your customers’ loyalty.

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