Establishing an e-commerce business: can your small businesses really compete with Amazon and the other online giants?
Amazon is the biggest online shopping platform in the world, but its mammoth reach shouldn’t stop smaller e-commerce brands from thriving
When most people think of online shopping, they think of Amazon. Buying habits have changed dramatically over the past two decades, with many citing the COVID-19 pandemic as the nail in the coffin of shopping on the high street. In 2023, more people than ever are doing their buying with a few quick taps of their smartphone.
With Amazon dominating so much of the online shopping industry, it’s understandable for smaller e-commerce businesses to feel overwhelmed at the thought of getting a foot in the door. However, there are still ways small businesses can stand out against the online behemoths, and we’re going to take a closer look at how this is possible.
David and Goliath: What makes Amazon so threatening?
According to Amazon itself, the selling giant has more than 300 million active customer accounts and almost 2 million selling partners worldwide. It accounts for nearly 40% of the e-commerce market in the US alone, and in the UK, more than 86% of people who shop online have shopped on Amazon.
With its record profits year on year, Amazon has the resources and budget to make online shopping as quick and convenient as possible, which only works to increase their customer base. Amazon Prime customers can find an item, buy it with a single click, and have it delivered to their door for free on the same day. Everything from clothing to homeware to medicine to DIY and more can be found on Amazon.
Even reading and streaming fall under the Amazon umbrella, thanks to Kindle and Amazon Prime, and the Amazon Alexa is a staple inclusion in many modern households. Now, with the somewhat recent introduction of Amazon Fresh – a collaboration between Amazon and leading supermarkets like Morrisons – customers can now even do their weekly food shopping via the Amazon app or website.
It’s a plain and simple (yet often hard to swallow) fact that small businesses cannot compete with this level of convenience. However, that doesn’t mean you can’t incentivise customers to choose your brand instead of relying on Amazon.
How can a small business compete with Amazon?
There are two main reasons for a customer to choose a small business over Amazon: to reward the business and to reward themselves. There is a strong moral case to be made for customers choosing small, local businesses over online shopping giants. Small businesses appreciate every sale they get, and shopping with them helps to stimulate the local economy. Various ‘Support Small Business’ movements highlight these benefits and encourage customers to shop small, so it’s always worth researching these causes and getting involved.
This is especially true when it comes to competing with Amazon, as the shopping giant is frequently the subject of scrutiny surrounding its ethics, from sustainability to the rights and welfare of its workers. Customers are encouraged to shop with small businesses when they feel like they’re choosing the more ethical option.
But shopping with small businesses isn’t just for the business’ benefit. There are plenty of ways customers can feel rewarded for shopping with a smaller brand.
Tailored customer service can make customers feel truly valued, so consider including free samples, handwritten notes or personalised emails with your orders. Similarly, consumers still genuinely appreciate buying advice – so, if your website provides detailed guidance, advice and reviews, this can be valuable to a customer who is intimidated by the endless choice but lack of clarity offered by an online giant.
We all know that big brands have protracted ticketing systems, automated responses, chat bots and convoluted processes. So, being able to provide a personal service, a human touch and a genuine empathy can go a long way.
Embrace your smaller size and ‘local’ status by highlighting the people behind your business. Unlike Amazon, you’re not just a brand, you’re an individual, a partnership or a family. This will help you develop a personal connection with your customers, which means they’ll be more willing to support you.
Speaking of connections: retaining customers is always preferable to a customer base that feels like a rotating door. Creating loyalty is key to small business success, which is why you should consider a loyalty program. Treating repeat customers to something extra when they come back again and again can help them feel valued, which is something Amazon cannot achieve. Consider offering discounts, freebies or prize draws for new and repeat spenders to encourage them to shop with you again.
Embracing your small and local status can help you stand out as a viable option against the likes of Amazon. If you’re trying to expand your horizons as a small business, we can help. TEDCO Business Support has helped thousands of start-ups get their feet off the ground in the region, helping them start, grow and achieve robust success in their field.