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How small retailers can succeed against big brands

29th Nov 2016
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Small Business Retail
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A recent report from news.com.au stated that American giant, Amazon is planning to start operations in Australia by September 2017. That has given some smaller retail outlets a reason to be nervous.

According to some estimates, Amazon's net worth is greater than the entire gross domestic product of Hong Kong. Their online sales account for $0.50 in every USD spent in online purchases in the United States.

The giant e-commerce brand is bigger than the next 12 largest online retailers combined.

In July 2016, known as, "Prime Day", Amazon's turnover represented 74% of all US e-commerce for that day.

If you are a small online retailer this can appear a little intimidating, to say the least. How can small business and family owned retailers compete with such large multinational brands?

The good news is that small business has always flourished, right alongside these heavy weights.

From niche board game stores to fashion boutiques, the Australian online marketplace has a lot of room for small startups and niche retail stores.

Nevertheless, Australia's retail margins are a weakness and big brands are in a position to take advantage of that weakness.

But, rather than panic, Australian online retailers can be taking a leaf out of Amazon's book and applying a similar marketing strategy. They can begin by asking the question:

How can a smaller online brand take advantage of the weakness inherent in a big brand?

"Australian online retailers need to get busy building brand loyalty and securing their existing customer base", says Kym Butler of Butlers Business and Law.

One of the ways we can be doing that is by examining the weakness in the big brand armour.

What marketing strategies can be put into place now, to ensure a loyal and growing customer base into the future?

Big brands suffer from a number of weaknesses that are worth examining. They include:

  • The lack of personal service
  • The generic nature of their products
  • The one-size-fits-all mentality
  • Conversely, some of the strengths of small retailer are:
  • Niche appeal
  • Authenticity
  • Hyper-local
  • Patriotism
  • Customer Service

Get personal

Amazon, as with many big brands, emphasises convenience but makes very little room for genuine customer support and human contact.

Smaller brands can take advantage of this by ensuring they are accessible and available to their customers and clients.

Smaller brands can also narrow down their niche and appeal to a smaller and often more dedicated and loyal customer base. Small business should be thinking through the unique features and benefits of their products.

Consider some of the areas your own business can stand out:

  • Where is it made?
  • Is it designed for local weather and conditions?
  • How easy is it to make returns and get refunds?

Now is a good time for small online retailers in Australia to get savvy. To stop trying to compete with big brands and start trying to outsmart them with a more flexible and robust customer service strategy.

Go local

Google has been a friend to small business here. More and more people are seeing tailored search results based on their location.

This has enabled stores, whether online or bricks and mortar, to step back into the retail picture and offer a number of benefits including:

  • Speed
  • Customisation
  • Personal contact

Being able to customise your product for a local market - even an individual client or customer - is something that a lot of big brands simply cannot do.

We also live in a culture that is reviving its romance in authenticity. We want real wool, real chicken and real quality. We are re-learning the value of handmade, home crafted, organic and natural.

All of which play into the hands of small business.

Ritesh Patel, Chief Information Officer at Australian owned Office National suggests,

“It will be interesting when Amazon launches it’s Australia deal with a country which has a population of Southern California and the land mass of the US."

Clearly they will disrupt the local market in the last mile model for delivery and customer service. Innovations such as the Amazon Dash and Drone delivery in the local market, will force local organisations to step up their digital marketing initiatives”.

Patel is a realist. Big brands have always presented these kinds of challenges. But small business has always responded with innovation and initiative.

Small retailers need to sit down and revisit their marketing strategies. They need to look at ways they can provide superior quality and excellent customer service.

Images. Pexels CC0 License, 2016

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