Holiday Season Showdown: Amazon vs Small Business

Holiday Season Showdown: Amazon vs Small Business

Holiday Season Showdown: Amazon vs Small Business

The holiday shopping season is usually a happy time for the retail sector. A few good days in November and December can make a fledgling business profitable for the whole year. However, many smaller businesses are quaking in fear at the prospect that Amazon could derail their seasonal plans.

It’s getting tougher every year for small and midsize businesses (SMBs) to compete with them. Even though Amazon’s recent numbers aren’t as strong as they were in the past, they’re approaching the $1 trillion mark. Amazon CEO Jeff Bezos’ plans involve charging into new markets and waiting for competitors to fall.

This leaves many retailers wondering whether this year’s festivities will spell their doom. However, smart business leaders have developed new ways of fighting back.

Selling with the Enemy

Smaller retailers are terrified at what pundits call the Amazon Effect. The online giant will occasionally move into a new sector. It then slashes prices until existing firms leave the sector. Some have accused Amazon of then raising prices again after they’ve hurt other companies.

Numerous small retailers have decided to join the third-party Amazon Marketplace instead of waiting for this to happen to them. This isn’t really an option for most SMBs. If you sell products that are already on Amazon, then there’s too much competition already.

Independent manufacturers and exclusive distributors of private label products are singing a different song. They’ve seen huge sales figures in the last fiscal year. Other brands now outsell Amazon’s own line of women’s apparel. This is in spite of the fact that women’s clothing labels constitute more than 51 percent of Amazon’s total brand investment.

Testing Other Online Marketplaces

Sites like eBay and eBid have evolved into full-fledged marketplaces. They’ve tried to shed their image as auction sites. Small retailers aren’t missing the opportunity to sell on eBay all over again.

While it might have been popular in the past, eBay lost traction for some time. It’s various clones suffered as well. However, eBay now has a record number of shoppers browsing it on a daily basis. There’s no reason that small business owners can’t sell here as well as through other portals.

Some companies have gone so far as to abandon their standalone sites. There isn’t much overhead when selling through online portals. This can help cost-conscious companies slash how much they’re spending.

Exclusive distributors may experience the most success when going this route. Those who sell certain types of consumer-grade products also stand to benefit. For instance, consumers are worried about getting burned when buying tech items online. This is helping to give legitimate dealers an edge when they leave the Amazon Marketplace.

There’s no reason small businesses couldn’t sell on Amazon and many other portals either.

Sales Go Social All Over Again

Employing social media influencers to generate sales leads isn’t a new tactic. The holiday shopping season has always been an excellent time to tell funny anecdotes on Twitter or Facebook. These can translate into sales. What’s new is hard data that proves these techniques work.

Several studies seem to indicate that well over half of all shoppers have been influenced in some way by social media posts. Amazon continues to promote celebrity influencers and other personalities. However, these studies also suggest that people respond best to those they can identify with. SMBs who use family-oriented avatars that shoppers can relate to might be able to edge out Amazon in this respect.

Improving the Overall Customer Experience

Even though it’s 2018, some smaller businesses are only just now leveraging mobile technology. It wasn’t affordable to get customized apps until fairly recently. Countless retailers have released freely downloadable mobile portals in the last year. They hope to improve the user experience for mobile consumers who might be dissatisfied with Amazon’s offerings.

Some consumers dislike Amazon’s focus on their Prime service. These users have been lured away by promises of genuine free shipping and a greatly simplified user interface. They’ve also been able to attract customers who don’t shop with their phones.

Even though polishing mobile apps is important, shoppers who user desktop and laptop computers shouldn’t feel left out. SMBs that have fixed problems with their traditional shopping carts have been able to grab these users. Many of them prefer to see product images in full HD on larger screens. Fixing shopping cart issues and increasing image resolutions has helped take this market segment back from Amazon.

Doubling Down on Alternative Currencies

Eliminating bugs should be the number one chore on the holiday to-do list of every smaller retailer. Nothing turns potential customers away quite as fast as the inability to complete a transaction. Savvy companies are going much further than simply fixing errant code, however. They’re adding new payment options to attract clients who can’t use their preferred transaction method on Amazon.

Bitcoin and several altcoins have matured enough that many shoppers carry them. Adding a cryptocurrency wallet can greatly increase the number of people who are willing to do business with an online retailer. Amazon has yet to really leverage these markets. This is a rare example of a sector that small retailers can conquer before Amazon feels comfortable doing so.

Perhaps even more important is that fact that more retailers are accepting PayPal than ever before. Amazon shoppers who want to use cryptocurrencies to complete transactions have to go through an onerous conversion process. However, the fact that workarounds involving debit cards are needed to use PayPal on Amazon is turning potential customers away in droves.

Small retailers who accept PayPal in addition to their other options can again get a leg up on Amazon.

Small Businesses Shouldn’t Throw in the Towel

Financial experts like to bring up studies that suggest Amazon controls over 40 percent of the market. If these are true, then it means just under 60 percent of sales aren’t from Amazon. SMBs shouldn’t feel like they have to give up. There’s a large slice of the holiday shopping market there for the taking.

Some of these figures are based on old data. Even if they’re accurate, it doesn’t mean Amazon’s victories are permanent. Small companies that sharpen their digital sword might be able to slay Amazon’s retail dragon this holiday season.

Philip Piletic
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My primary focus is a fusion of technology, small business, and marketing. I’m an editor, writer, marketing consultant and guest author at several authority websites. In love with startups, latest tech trends and helping others get their ideas off the ground. I’d like to thank Mofluid for their help with this article. You can reach me over LinkedIn.