Why E-Commerce is a Growth Channel for SMBs, Part 2
In this two-part series, I'm offering insights into how startups or small businesses can close the gap between themselves and enterprise e-tailers or big-box stores through the use of software and technology, as well as digital branding and marketing channels. (Here is part one.)
Providers of SaaS platforms and MarTech experts seem to think the mismatch in capabilities is evaporating fast, as per my conversations with a few industry leaders.
While resources are a challenge for SMBs, there are clear ways they can compete with bigger brands. Here’s the remainder of my tips for smaller e-tailers to thrive in today’s cutthroat market by evolving quickly to meet the expectations of modern buyers.
Scaling Brand Experience and Diversifying Channels
One key advantage that SMBs have is the ability to focus on the finer details of customer experience. Loyalty is a direct byproduct of this kind of personalization.
SMBs can now achieve this kind of relationship with scalability. “The tech already exists — what’s changing is that it’s rapidly becoming more accessible, affordable and more user friendly,” notes Referral Candy and CandyBar CEO Dinesh Raju. “When everyone, large and small, has access to the same tools and opportunities, we should start seeing all sorts of unique, exciting new products and services breaking through barriers and serving their niches well.”
And yet, in the enterprise, attempts to personalize interactions for relationship-building purposes are rare. “Typically, smaller brands are hyperattentive to their customers,” notes Jimmy Duvall, chief product officer, BigCommerce. “They engage in a more personalized way, and excel at both customer service and providing a positive experience.”
That’s not to say that major players aren’t taking personalization into consideration. Amazon.com is the prime example of a retailer that's able to remain customer-centric despite its size, thanks in large part to its massive data practices.
E-commerce tech continues to put more power into the hands of smaller merchants. Social shopping through Pinterest and Instagram continues to boom. Storefront apps are likewise serving to put merchants’ products into the literal pockets of buyers to meet the needs of the mobile market.
And SMB merchants have suddenly become hot commodities themselves, with mainstream online marketplaces like Jet, eBay, Amazon, Alibaba and Walmart trying their best to woo them to sell on their platforms, which are go-to destinations for consumers.
Today, even a solo business owner can afford a remarkably robust and integrated CRM system, taking care of loyalty, customer feedback, analytics and core business functions.
“It used to be something only the big companies could afford, with expensive, enterprise-scale suites, costing tens of thousands of dollars,” Raju notes. “A solo entrepreneur can now compete with the big guys in ways he or she simply couldn’t before.”
With this evolution of marketing and technology giving smaller players the aura of an enterprise brand, there are still two distinct areas where SMBs differ tremendously.
SMBs Can Specialize in Agility
The more that SMBs invest in new technology and innovations, the more of a fire they light under bigger brands that are oftentimes set in their ways.
“Despite the fact that the majority of large, incumbent retailers have budgets that dwarf those of the small upstarts, they often choose not to invest it in nascent technologies,” Duvall says. “And as a result, they tend to lag behind in terms of e-commerce innovation.”
Large brands move slowly and tread lightly when it comes to taking risks. Duvall notes that this aversion to new technology represents a window of opportunity for those smaller brands to overtake established names. “Their ability to act nimbly and their willingness to continually test and learn enables SMBs to implement new technologies early, giving them a competitive advantage,” he says.
The key to success as a smaller brand is finding a niche that’s flying under the radar and dominating it.
“If a SMB tries to enter a market already conquered by big enterprises, it will be more difficult to be successful,” says e-commerce consultant Shane Barker. “Hence it's necessary that they choose an industry or product line which hasn't been explored much.”
Specific niches breed opportunities for SMBs to craft highly targeted content that speaks directly to their target audience. Spearmint Love’s success is a prime example of such content translating into results.
“Smaller brands — particularly those selling in niche categories — have a knack for combining content and commerce in a frictionless way,” Duvall notes. “Their passion and expertise in their specific category shine through their content, which in turn adds more credibility in building a lifestyle and community around their products."
Yeti Coolers serves as a stellar example of a brand that managed to position itself as an industry leader and oust legacy brands in the same niche. With content that focuses on personal relationships with customers, Yeti was able to establish connections with its customers that quickly snowballed into market demand.
The takeaway here? The ability to converse with customers on an emotional level represents one of the greatest strengths of smaller merchants.
SMB E-Commerce and the Bottom Line for All Merchants
Whether SMB or enterprise, all merchants have their own unique sets of challenges and opportunities staring them down in 2018. In the end, success boils down to finding and employing the right investments and technology as the market continues to shift.
As e-commerce platforms fine-tune their features and functionalities for both large and smaller merchants, brands of all shapes and sizes can reap the benefits.
Rohan Ayyar is a project manager at E2M, a digital marketing firm specializing in creative content strategy, web analytics and conversion rate optimization for startups.