Knowledge

Competing with online as a small business

Published on February 16, 2015 under Marketing, Business

Recently, it was all over my local news of a kids shoe store going out of business. In the interviews, the owners mainly blamed many moms who come in to look around, but then ran home to buy those products for less off online retailers such as Amazon. Comments went back and forth on how Amazon didn’t collect sales taxes and how online and big box stores kill local businesses, but I think a bit differently about all this.

Like it or not, big box stores and online retailers are here, and they’re not going away. Many try to drum up support for small businesses with “shop local” campaigns, but I honestly think for those places to really compete, they need to be smarter and do more than just open up. I don’t claim to be a perfect entrepreneur, but even from my viewpoint there are things many need to think about when opening a “mom-and-pop” operation.

Location is everything

We’ve all heard the term “Location, location, location…” when starting a business, and it still rings true today. However, many seem to think picking a location is solely about an area with loads of foot traffic, which is a big mistake.

I looked at the website of this shoe store, and my first thought was on how expensive their shoes were. Granted I’m not a parent, but I could not fathom spending $75 on shoes a kid would quickly outgrow or destroy. Their actual brick and mortar location was in an area mostly filled with middle-class families who obviously cannot easily plop $75 for shoes. An even bigger observation is the flush of childless 20somethings moving in, seeking affordable rental housing. Thus less people with kids that probably won't buy pricey shoes for children.

When you dream up your business, you need to not only seek those potential locations that see the foot traffic, but also think about the demographics and income level of the residents, as well as their lifestyles. Maybe their store would have done better in an upper-income neighborhood closer to downtown, or one of the affluent suburbs north of Chicago. Granted you might end up paying more in rent, but you'll likely gain actual buying customers, as opposed to showroomers.

Make the most out of the internet

This is a multi-faceted tip, because nowadays when it comes to retail commerce, you have many choices on how you want to handle both your online commerce and advertising.

First off, research and really examine if your own www.yourBusinessName.com website is ideal for you. Perhaps you would do better in an online marketplace. Sites like Amazon.com operate much like a shopping mall. Granted you can buy products and have Amazon pull and ship them to you, but many companies now have utilized Amazon’s Marketplace to sell their own products with less overhead and way more faces coming upon their offerings.

In many ways, this is like deciding to open a store on a street versus opening inside a mall where the mall itself helps bring you customers. It doesn’t have to be Amazon even. There’s Ebay, Etsy, and many more online marketplaces that you could sell in. It’s a piece of advice I hand to many looking to get into ecommerce, because the end goal is to sell and make money.

Now if do decide to have your own website, then you need to think beyond just selling items online.  Keep your mindset thinking in terms of content and engagement to bring more value to every visitor who comes through. Blogging is a big idea that does bring results. That kids shoe store could have easily set up a “mommy blog” of sorts, and would probably get some of those showroomers to pay more for their goods, mainly because a rapport would have been built.

Social media should also be a big part of your work in engaging current and potential customers. This is not just about setting up some accounts and posting sales, but also on talking to, sharing with, and engaging with customers. If someone complains, answer it publicly, showing you care. The shoe store could post links to funny and serious content pertaining to their clientele, and even help promote local “family friendly” events...all to build value for those following them.

Be more than a store

So you’ve found the right spot to open up, gotten your web and social media presences strong, but what about the actual physical store as well?

When it comes to businesses aimed at children, I’ve seen small things that do much, like free coffee for all the moms who come in. I’ve seen some go bigger, with holding storytime events in the store, or going to local festivals and setting up a booth to give out coupons and engage locally with potential customers.

The main point is a brick and mortar store now has to be part of the community and not just some place sitting there filling a storefront. You have to connect and engage the community both locally and online as well as offer added value (beyond sales) for all who choose to visit your store or come to your website.

Will this fully stop showrooming shoppers? Probably not, but it’s been shown the added effort will turn many to patronize your business over quickly seeking the lower price. What keeps many “mom and pop” shops open is in how much they’ve built a rapport with their community to be indispensable. So maybe someone will spend more on shoes simply because they do not want to see this place close.

How do you think small businesses can compete against big online retailers and big box stores?

Tags: business, online, Amazon, showrooming, marketing

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