Small Site Advantages Against eCom Powerhouses

[martinibuster]

Article in the NYTimes - Can a Small Retailer Compete Online With the Big Boys [boss.blogs.nytimes.com]?

One of the ways cited is with customer service. I have to agree. I am a loyal customer of several small online merchants, some of them literally a mom and a pop.

It’s very hard to compete with the bigger online companies on price, but we can compete by giving our customers personal attention.”
For example:

“If a customer wants to see a particular bag packed a certain way, we will make a video for them and post it.”

“We will spend time answering all your e-mails and sit on the phone with you until you feel comfortable ordering and all your questions have been answered.”

“We have customers that call us when they had a bad day and need to talk, but they still manage to pick our brains about that diaper bag they had their eye on.”

“We may have a store policy, but we always find a way to make a change to keep our customers happy.”

The battle is attaining those customers in order to give them that level of customer service. Speaking as a consumer, one of the ways some of the small shops have gained me as a customer was through eBay. eBay isn't just for selling items, it's also a way of building customer relationships for your ecommerce website.

What other ways are there to compete against the big sites?

[rocknbil]

One client's only reason for success is that she is passionate about the topic her products are for. They are items for an activity that is close to her heart and she hand picks items and discards others that are sold in droves by all her competitors. Her offerings are just under 1000 products, competing with sites that 1) have several thousand, and 2) just uses the manufacturer's descriptions and photos, watermarked with THEIR site name (steal it and copyright it lol . . .) All of my client's products are hand photographed and the descriptions and advantages are her own.

The addage "write what you know" for writers is as relevant on the net: "sell what you know" (and show you care about it.)

[Planet13]

Speaking as a consumer, one of the ways some of the small shops have gained me as a customer was through eBay.

I think that there are a large number of sites that are at least TRYING that strategy; i.e., using ebay or amazon shops to get the initial sale, and then try to get the buyer to become a long-term customer.

I believe that amazon and ebay are trying the hardest to prevent those stores from being successful in that strategy though (such as limiting communication between the seller and the buyer).

Also, there could be some counter productive (from an SEO standpoint) results from this. Many sites will end up using the same description on THEIR web site as well as on the ebay / amazon store, diluting the uniqueness of the text on their own site.

Also, some of the social signals that google might rely on in ranking sites (such as star ratings and written reviews of the product) will end on the amazon or ebay site, instead of being published on the site of the actual business.

While I personally haven't had much success with this method, hopefully, some of those sites who have been more successful will chime in here.

I am sure that some have succeeded, I just haven't figured out how to do it.

[jecasc]

I have been succesfully competing for 10 years now. The key is to build a customer base and provide exceptional service so your customers don't even think about looking for the products you sell somewhere else. Currently between 65% and 70% of my business is repeat business, the conversion rate this christmas season has been a steady 9-11%. Actually until a few months back I thought that two digit conversion rates were fairy tales.

However while doing my own christmas shopping online in the past weeks, I have seen why many small businesses fail. No pictures, short or no product descriptions, bad designed call to action buttons, no trust signals like customer reviews - sometimes not even an address (especially US shops), to few payment options, product search that simply does not work and half of the products are not in stock.

Many complain that the big boys take away all the business because they can afford to sell cheap - but in reality many small business simply have not done their basic homework. Good customer service starts with your online shop. We are only a small shop with five people, yet I have made sure that we have all the features the big websites have. From 360° pictures to a search engine with fuzzy logic. Every product is in stock, average shipping time < 24 hours and every email that arrives within business hours is answered within the same day.

When you are small you have to be better and faster then the big guys and not use "being small" as an excuse for bad customer service.

Another thing many small shops miss out on is international business. Especially when you are located in the EU you have 27 countries with 502 Mio people, nevertheless many target only their small home market. 30% of my business is international, my competition does not even have an english website. One of my suppliers recently opened his own shop targeting the local market. He was getting very few sales. He asked me how I did it because I am by far the biggest seller. I did not tell him that I sold 80% of the products to Finland. His brand is "hip" in Finland and he does not even know it.

[edited by: jecasc at 5:55 pm (utc) on Dec 15, 2011]

[mattia]

U know the famous Location Loction Location......

When on the Internet, it is
customer service | customer service | customer service...
NO MATTER HOW BIG U Are!

Excellent custoemr service meaning that you master
- your relationship with your manufacturers
- the shipping
- the return of merchandise
- quick reply of questions

in order treat your customers like Kings....

then in their eyes you will appear as THE real BIG store!
and they will become repeat customers

Remember that especially on the Internet, business growth is not about new customer, its all about repeat customers

[Planet13]

Hmm...

What doesn't "scale" well?

The main advantage of big companies is that they can do everything to scale, thus lowering costs, and lowering prices (for the most part).

So, what doesn't scale well?

[viggen]

I got a christmas card from a small retailer i bought half a year ago and whom i must say forgot (as with so many other shops i buy on impulse or cheapest price).

It was a very personalized message and included a 5% discount code. It touched me and i bought again the same day in their shop...

Holding a personalized post card in your hand is soemthing i havent had in a long time, and never before did i get that from an purely ecommerce shop...

[henry0]

I don't sale manufactured products, my product is my time and my expertise in a certain field.
I have a very good ticket system and a 800 number that I make a point to personally answer.
All of that is following me when travelling abroad.

BTW I am probably the only one in my field offering support for a defined length of time and for a fee.

[rollinj]

@henry0, that's not the answer to the question that the article is asking. That's an alternative to competing with the big boys, it's not a solution.

@viggen, sending "christmas" cards to the wrong person could result in a severed relationship and lost customer. It is always best to separate religion and business whenever possible. There is nothing against sending a follow up "thanks for the business!" card with a discount coupon at any time of the year.

Perhaps knowing the customer so well that you know their religion and just how religious they are is the ultimate solution! Heh..

Sending Kwanza, Hanukkah, and Christmas cards to the appropriate individuals :P

[Panthro]

From my own personal experience as a consumer, I think a lot of the "mom & pop" places are their own worst enemies. But it's a difficult job to be the manager, accountant, and online marketer all at the same time - AND be successful at them all.

[martinibuster]

I have a very good ticket system and a 800 number that I make a point to personally answer.

There's nothing like being able to speak directly to someone who can make things happen. That's a way small can compete and best large companies because with few exceptions large can't replicate that level of service and response.

Netflix customer service has always been good but since their recent troubles they've noticeablely stepped up their game a couple notches. I've had negative experiences with several orders placed at a popular large ecommerce company, regarding unfulfilled orders, and at a popular airline regarding other issues. Their customer service people have no power to "make it right." The smaller companies I do business with are more flexible and eager to make things right. Which is why I go to them first when I can.

Re the merry xmas cards, there is probably a downside to just about anything. There's always the holiday card. My wife was just commenting about the holiday card our mortgage broker from seven years ago sent us and how she enjoys reading her mailers because they feature so much useful information. She also remarked how over the phone last week the mortgage broker asked about our child. That's one sharp lady. We wouldn't dream of sending our business to anyone else. I understand how she makes money but we comfortable with her because we feel she listens to us and makes us feel she cares and is on our side.

[Planet13]

One other thing to throw in the mix...

There is a certain amount of appeal in terms of exclusivity. Some people like things that they known that not everyone else will be wearing.

their are some major chains that try to mimic this to a certain extent. Take anthropologie for example; they are a major chain selling mass produced chinese-made clothing of mediocre quality, but charging EXCLUSIVE pricing for it. They gussy up their stores to try and create a boutique feel to them, but the displays are cookie cutter in reality.

[mmaniquis]

I agree as well. Speaking to a real person who cares makes people comfortable doing business with you. We're in the travel business and that's our advantage over online travel booking agencies.

[henry0]

mmaniquis, welcome to WebmasterWorld!

[piatkow]

She also remarked how over the phone last week the mortgage broker asked about our child. That's one sharp lady.

Recording this sort of personal background about clients was standard in pre computer days with Filofax or card index. Not done much these days over here as there are data protection issues involved if held on line.

[RhinoFish]

lean and hungry -vs- fat and full... i bet on the former.

[mmaniquis]

Thanks for the welcome, Henry. I'm trying to quote you but I can't figure out how. LOL.

[aleksl]

rocknbil: One client's only reason for success is that she is passionate about the topic her products are for. They are items for an activity that is close to her heart and she hand picks items and discards others that are sold in droves by all her competitors. Her offerings are just under 1000 products

I guess we need to define "Small Site" , and also I don't believe in hand-picking 1000 products AND running the day-to-day operations story, there's something else there.

The only time I saw "hand-picking" and 1000+ products is a person buying jewelry in bulk where "hand-picking" means picking a design and then just ordering 10 different colors.

martinibuster: My wife was just commenting about the holiday card our mortgage broker from seven years ago sent us.. She also remarked how over the phone last week the mortgage broker asked about our child. That's one sharp lady. We wouldn't dream of sending our business to anyone else. I understand how she makes money...

I wouldn't be so sure about it, if I were you.

Your 200,000 mortgage is packaged and sold of to the next bidder higher up, so the company you pay mortgage TO cannot , for instance foreclose , they have no interest in the loan. But that's not all. Once capitalized and sold, your mortgage is leveraged by a bank at 1:10 , creating $2 million dollar note, which is sold of profit. At 6% interest at 30 years that's a lot of money out of thin air for the bank, including hefty commissions to the sharp broker lady (which is at that point a pocket change comparing to what bank is making). If an average american really understood the racked that is mortgage industry, hopefully there would've been an instant revolution (doubt it though, too much TV, beer and internet).

[Yulia from DNP]

I think that you can find enough "BIG BOYS" who started from a small business like that, giving the costumers special attention, so in a way, they play on the same ground.
One day small retailer, next day BIG BOY, not all have potential of course but enough do, they just no quite have the knowledge and the tools to expend themselves to a bigger network.And that's all thanks to the giving and caring costumer service etc etc etc

[Planet13]

I think that you can find enough "BIG BOYS" who started from a small business like that, giving the costumers special attention, so in a way, they play on the same ground.

I am more pessimistic about that.

What I see are investment companies finding small businesses that have a competitive advantage but a poorly run business, buying those small businesses, leveraging the investment firm's capital, and then using economies of scale to muscle their way up the market, all the while keeping the facade of a small business.

Someone mentioned a particularly well known clothing chain where this happened.

Also, I think this is what happened to starbucks, no?

[Planet13]

I understand how she makes money...

I wouldn't be so sure about it, if I were you... Your 200,000 mortgage is packaged and sold of to the next bidder higher up...

What I believe martinibuster was mentioning was that he knows that she (the mortgage broker) gets paid on a commission and that he realizes that she just wants to keep her name in front of him and his wife should he ever need to re-finance, or if he ever knows someone who is buying a house, martinibuster would refer that person to the mortgage broker.

While the business of mortgage-backed securities is complex and could infuriate many people if they understood the details and ramifications for the nation's economy, I am quite certain that the average commission-based mortgage broker has little to no involvement with the higher levels of finance that trading of mortgage-backed securities entails.

But that is beside the larger point of this thread...

I think what martinibuster is saying is that as a small business, we need to make sure that our contact with our customers is distinctive and memorable.

Obviously, a big business would be able to "contact" people more easily since their newsletter and other contact methods would scale well with their large customer bases.

So with our smaller customer bases, it means that we will have to have more distinct (and therefore more time consuming / expensive) forms of contact with previous clients.

[Yulia from DNP]

Planet13,
I agree with you that investing in a small company is a common thing , but i wans't talking about every little company.
You can make pretty much anything work, with the right marketing approach, tools, strategy, etc etc.

[Marshall]

As I've mentioned in other threads, I manage an ecommerce site for one of my clients (nice break from web design). The best example I can give of an advantage small sites have is something a customer emailed me:

"Thanks again. You have renewed my belief in customer service!"

That was on Monday, and since then, the customer has referred 3 new customers to my client's site. So, in two words, Customer Service that large companies can't or won't take the time to offer.

Marshall

[Planet13]

One thing I thought of last night.

An ADVANTAGE of little companies is that information from the customer is usually transmitted to the main decision makers more quickly and easily.

For Example: Several years back a woman came into our stores looking for a particular type of shoe that we had never heard of. She described it to us and said, "If you guys carried that shoe in your store, you would sell a lot of them."

So we started carrying that shoe in our store and, more importantly, online, and for our online store, it was a pretty big seller.

So I guess you would say that an advantage might be the transparency of customer feedback to management / ownership.

In a big company, that kind of feedback might not make it to the decision makers.

I guess our job is to make sure that we can encourage customers (and potential customers) to actually provide suggestions to us.

[dpd1]

Here's a good article proving big isn't always better.

[reuters.com...]

Only six of the 25 largest U.S. retailers received top marks for online customer service, including website performance, between this year's November 25 Black Friday and the following Cyber Monday, according to STELLAService.

The result is a large number of disappointed online shoppers like Nenon.

"They don't understand the basics of customer service," Nenon said of Best Buy. "I understand that things can happen. What bothered me is when they made a mistake, then they made no concessions to their customers to try and make up for it."

[dickbaker]

"They don't understand the basics of customer service," Nenon said of Best Buy. "I understand that things can happen. What bothered me is when they made a mistake, then they made no concessions to their customers to try and make up for it."

Yep. That's one area where I try hard to make the customer happy, because if he's not, he'll spread the bad word.

I had a day where a bunch of backordered items came in. It was very hectic, and I missed shipping an order. I thought I'd shipped it. A week later, the customer emailed me, asking where it was. I checked, found out it hadn't shipped and, worse, I was out of stock on that item.

There was another item that was exactly the same, but with a couple of extra features that made its price a bit higher. I told him that I would send him the more expensive item, and would send it UPS overnight, all at no additional cost. I didn't make a profit on the sale, but when he emailed me back gushing with compliments, I knew I had a new future customer, plus some of his friends.

[Planet13]

I didn't make a profit on the sale, but when he emailed me back gushing with compliments, I knew I had a new future customer, plus some of his friends.

I had a similar thing happen for an item that was going to be a birthday present.

I called the customer on the phone, explained the problem, offered the more expensive version at the same cost (which was the one she REALLY wanted anyway but couldn't afford it, she told me), got it to her on time to give as a gift, included a discount card for next purchase, too...

Still waiting for that email with the compliments or a follow up order ;)