Jeff Bezos, founder of Amazon, just became the third richest person in the world, nudging out investor Warren Buffet. On his way to amazing riches, Bezos and his online behemoth store knocked out untold numbers of independent small businesses. Indeed, if you ask small retailers who their biggest competitor is, they’ll likely say “Amazon.” That is, if they’re still in business.
Let’s give Bezos his due: he’s an incredible entrepreneur. He had a vision of creating the biggest store on earth in the mid-1990’s, and with unwavering intensity, he made his vision a reality. Amazon has helped create many other new small businesses by providing them an easy way to sell online, and some bricks-and-mortar retailers have built income streams through online Amazon sales.
But, let’s face it, Bezos had a lot of help. It’s not been an even playing field for the small bricks-and-mortar retailers. Amazon has benefitted from many sweetheart deals: no sales tax for customers (finally, some states collect sales tax), tax breaks from states for building warehouses, apparent discounts from shipping companies, and, perhaps most importantly, investors (the stock market) that didn’t care if he lost money year after year.
By far, the most aggravating thing Bezos did in the eyes of bricks-and-mortar independent small retailers who have to survive against him was encouraging shoppers to engage in what has become known as “showrooming.”
Showrooming is the practice of turning a hard-working small business owner’s retail store into a “showroom” for online purchases. A customer goes into a store, tries on or tries out products, asks for insight and assistance from employees, and then goes online and buys from Amazon. In December 2011, Amazon even offered an additional 5% discount if a customer was found to be checking prices while physically still in a local store. It’s infuriating.
So what’s an independent retailer to do?
Frankly, it’s tough. Fifty-two percent of Amazon’s customers belong to Amazon’s Prime program, offering free services and subsidized shipping, and Amazon has a history of being willing to lose money to gain or keep market share.
Surprisingly — and fortunately— many independent retailers have shown to have been resilient and smart. Customers, too, have shown not to be as fickle as expected. In 2015, Small Business Saturday sales beat out Black Friday and Cyber Monday. The “Shop Local, Shop Small” movement is going strong. Millennials, especially, have shown a preference for in-person, local shopping.
As an independent retailer, you can out-Amazon Amazon. Here’s how:
Tell your story
There’s real power in making a human connection. Customers — especially millennials — want to do business with people and companies they relate to. Share your history. Why did you go into business? What obstacles did you overcome? What makes you love what you do? Share this in words and video on your website and in person. Be sure to share your values. Do you care about your community? Animals? The environment? After all, does anyone know if Amazon (the company) actually does anything for the Amazon (the river)?
Show you’re price competitive
People wrongly believe independent retailers are always more expensive than big box stores or online competition. They’re not. I buy my dog food from a wonderful independent pet store whose prices are often less than the big box pet stores, but when I recommend the store to others, they’ll say, “It’s too expensive.” If your prices are competitive, announce that in signs and/or on your website.
Shopping is a social activity for many. Plan in-store events or parties. One local independent running store has weekly runs followed by a monthly beer bash afterwards (sponsored and paid for by a vendor, in fact). Plan activities for kids (parents always need something to do with their kids). Encourage customers to take pictures and share on social media while in your store.
Develop loyal fans
Concentrate on ways to increase engagement with customers: loyalty reward programs, an active social media presence, create store “memberships” with benefits. And, most importantly, hire and train excellent staff who make a real connection with customers.
Team up with others
Recognize that the independent store across town is no longer your big competitor — they’re in this with you. Spread the “shop local, shop small” message whenever you can.
Copyright, Rhonda Abrams, 2016
This article originally ran in USA Today on August 3, 2016