Why E-Commerce is a Growth Channel for SMBs, Part 1

It just makes sense: Merchants with businesses that operate on different scales are going to have different needs and different expectations when it comes to the e-commerce platforms they use. However, in the age of democratized technology, are the differences stark enough for solution providers to reconsider what they offer their users?

To an increasing degree, e-commerce providers may be taking an “either/or” approach when it comes to size. Consider Volusion’s decision to sell its enterprise solution Mozu last year and focus on serving SMBs. According to Volusion CEO Kevin Sproles, the decision wasn’t about needing to service only “small” business. The choice was ultimately a numbers game, driven by the way Volusion defines “enterprise.”

“When we at Volusion think of enterprise, it’s just the very, very largest companies,” Sproles recently explained. “Amazon.com is the top of the list, as is Target, and so forth. That’s the part that we realize that it’s so different. Our target market now is SMBs, small and medium businesses, up to $50 million in revenue.”

Sproles noted that every one of Volusion’s top 100 sellers sees over $10 million in revenue per year, which means that they’re doing big business even if they’re still technically considered small from Volusion's perspective. This got me wondering about the extent to which size truly matters in terms of a seller’s platform requirements.

To get to the bottom of this question, I spoke with some industry leaders to get their takes on the trends that are converging and differentiating e-commerce for SMB and enterprise businesses.

What’s Still Reserved for the Top Guns

Remember the not-so-distant past, when features such as email automation, ad targeting and automated, synced listings on massive marketplaces like Amazon were out of reach for smaller merchants?

The rules have changed. Each piece of the e-commerce puzzle is now available to businesses of all shapes and sizes. Yet as the playing field seems a bit more even for SMBs, there are still some elements of e-commerce that are exclusive to the enterprise level.

For starters, enterprise merchants generally don’t need to concern themselves with growing their brands from the ground up. Struggles such as investment capital and resources in middle and upper management are an afterthought for the big players, as opposed to the SMBs that face resource struggles.

That’s not to say enterprises have got it easy. E-commerce expert Shane Barker notes that enterprise giants face a very specific uphill battle in the face of giants like Amazon and Flipkart, the sort of competition that SMBs don’t even think about. Specifically, Barker outlines what enterprise players need to survive in the modern market.

“They need to create a value proposition that sets them apart,” Barker says. “If they're able to provide incredibly fast delivery times, or something that no other company is providing, they're more likely to succeed.”

In short, they need a reason to encourage buyers to make a switch. On the flip side, the initial challenges facing SMBs are finding the resources and capital to make themselves a name in a low-competition niche.

SMBs Can Sell Like the Biggies (and Get Great Results)

Over a dozen retail giants filed for bankruptcy protection in 2017, including RadioShack and Toys"R"Us, leaving a gap in the marketplace, with customers looking for brands they can build relationships with.

“The waning influence of big-box retail has left a sizable opening for challenger brands to win the hearts and minds of customers,” says Jimmy Duvall, chief product officer of e-commerce platform BigCommerce.

Duvall sees this gap being filled by SMBs with unique products, using digital channels such as social media to truly engage their audiences on a highly personal level.

Where big brands may be out of touch when it comes to one-on-one marketing, these savvy small business owners can find the pulse of audiences. When those SMBs create killer content and tailor their shopping experiences to specific buyers, they have nowhere to go but up.

Duvall cites baby e-tailer Spearmint Love as a prime example. “Since the inception of the brand, Spearmint Love took the time to understand the preferences of its target audience of new and expecting mothers, and designed a shopping experience around that.”

Credit: Spearmint Love

Spearmint Love’s results are impressive, with revenue growing a staggering 991 percent and conversion rates rising 38 percent year-over-year. These results aren’t necessarily atypical, either, as more and more SMBs are sharing these kinds of success stories while legacy brands struggle to maintain relevant relationships with their customers.

Duvall explains that Spearmint Love leveraged social platforms like Facebook and Instagram to build sizable audiences, curating content that drove continued interest and streamlining shopping experiences to create a seamless connection between its off-site brand messaging and on-site commerce.

Watch This Space

In part two of this article, I’ll explore how small businesses can channel the personal relationships they’ve built with customers to scale up their sales. Their agility, of course, proves to be a great advantage in expanding their markets niche by niche. Meanwhile, I’d love to hear your thoughts on this divide in the comments section below.

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.