Digital competition: Tips for small shop owners to compete with online businesses
Today I want to speak about a topic that I know is very difficult to navigate for small shop owners: online business and digital competition. Indeed, the growth of e-commerce websites and large online retailers has wrecked havoc to the retail industry in the last couple of years. In Canada, only during the holiday period of 2012, an estimated $2.8 billion were spent online, and that number keeps growing every year. Whereas online shopping is sometimes seen as a youthful phenomenon, statistics indicate quite the opposite: 74% of Canadians over 55 have shopped online at one point or another! In addition to online purchases, digital technology has also changed how people shop in physical stores. More and more, people tend to use their mobile devices in stores to compare prices or goods with competitors.
So, what does this all mean for your business? Small and large shops alike are feeling the consequences of this growing trend. As a small shop, you might be concerned that your limited resources may not be able to compete with the large online stores who offer discounted prices and bulk items. To make optimal use of your time and resources, here are tips for small shop owners to compete with online businesses!
1) Fight fire with fire
Since people are more and more active on the web, make sure that your products or services can be found online. Even if you don’t want to or don’t have the capacities to create an online e-commerce store, that doesn’t mean you can’t have a small website with current offers or services listed. Not all clients will look online, but for those that do, don’t be invisible! You can’t compete online if you’re not present at all. This doesn’t mean that you have to invest a ton of money to create a website. Try website builders like WordPress, which are easy to use and allow you to build a basic website free of charge. If you are thinking about listing products for sale online, then invest your money wisely. Start small by selling through platforms like the super-popular Etsy, or others like Ebay. Unless you know for a fact that you have the financial and technological resources, don’t go spending thousands of dollars on an ecommerce website that you won’t maintain or that you don’t know how to maintain.
2) Distinguish yourself
Yes, some online retailers do offer amazing deals that are hard to match. After all, most of these retailers don’t have store rents to pay and have minimal staff to ensure that orders are shipped out. This greatly reduces their cost, and these savings are often passed down to consumers. While you may not be able to offer such low prices, to stay relevant in this hyper-competitive environment you need to determine what you can offer that these online retailers can’t. This can normally be broken down into two categories that are key to boosting your sales and staying on top: service and experience.
First, distinguish yourself by offering unique services. You can create activities, courses, or demonstrations in stores and offer these for free with purchase or for a low fee. Make sure you tap into your staff’s areas of expertise and utilize everyone’s skills to a maximum. Create a sense of community, a place where people can come in and learn from and with each other.
Another way to distinguish yourself is through customer service. Although this may sound like a very basic sales skill, this is one of the most popular reasons why people return to your store. This starts by making sure that all your staff is properly trained for their role and can answer inquiries effectively. Make sure that your staff is regularly informed about trends and techniques so that they may recommend them. This way, your clients won’t have to go online looking for tutorials, where they inevitably will find other products or discounts. If your customers have special requests, or questions that even you don’t know how to answer, then go the extra mile to help them out! Take down their coordinates and call them back later during the day, or place a special order for them. These kinds of gestures are very appreciated by customers and will help build loyalty and trust.
3) Offer a personalized experience
A great way to offer a better shopping experience than online retailers is to create a personalized approach to sales. Listen and learn from your clients; find out what’s motivating them this season and what projects they are working on. Based on this information, suggest products that will complement their needs or inform them of the trends and popular items. You can also ask clients what they are looking for and make a point of getting it for them yourself. Another easy way to create this personalized feeling is to ask clients their names and address them directly. It’s incredible how friendlier and more open become when they are “Brenda” instead of “just another customer”.
PRO TIP: Create and distribute project checklists in store to ensure that your clients have all the necessary items for their projects. You can have different checklists for different size quilts or patterns.
4) Growing your business
Don’t sit and stew about how difficult online retailers make it for small shops! Be proactive and encourage growth even if this means stepping out of your comfort zone. To grow your business, use a two-pronged approach by targeting both repeat customers and new customers.
First, it’s important that you classify your customers well: don’t include “dormant” customers (people that visit your store but rarely purchase), into the repeat customers category. You should treat these customers as you would a new one. For those that do come in and purchase frequently, keep them loyal by being attentive to their needs and style. Indeed, repeat customers tend to yield an average growth of up to 20% a year, which is not negligible. Up-sale items but don’t push products on customers since if they feel like they were forced into a purchase, they are less likely to come back. Another way to make sure customers come back to your store is to offer stress-free returns or exchanges on items you can. If you’ve ever purchased online, you’ll understand how crucial this is. When you purchase a product online, it’s always a hassle to return it even with pre-paid return labels or other. Really, who wants to wait six weeks to get a refund? If it ever happens, deal with complaints quickly and professionally by acknowledging your error and fixing it. Even better, be on the lookout for potential problems and solve them before they arise. Finally, keep your product selection updated. This way, when customers do return, they can find different products and spend more time in your store. Make a point to add a few new products every two weeks, or shuffle things around.
If you’re looking for faster growth, or if you need to counter balance the loss of many customers, you need to focus on finding ways to attract new customers. Some traditional marketing methods can be used, like referral systems, building strategic partnerships, affiliate marketing programs and direct marketing techniques (mail, email, telephone, and so on). Another expert way of attracting new clients is to do what marketers call, “next niche over” promotion. To do this, clearly define what your precise niche is (is your expertise quilting?) and see how you can expand in the next niche over (if so, then it the next niche over might be home décor). However, don’t abandon your tried and tested niche! To the contrary, you can also expand your offering within your niche and create different levels of pricing. Offer both higher-end and lower-end items, or package them differently to appeal to different purchasing habits. Finally, a very good way to attract new customers is to ensure that your branding communicates your store’s and your store employees’ personality and uniqueness.
I hope you’ve enjoyed these tips for small shop owners to compete with online businesses. Share your business success stories with us in the comments below!
I will leave you on the wise words of Robert Collier: “If you don’t make things happen, then things will happen to you.”