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How to Survive as a Local Business in the Age of Amazon

How to Survive as a Local Business in the Age of Amazon

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how-to-survive-as-a-local-business-in-the-age-of-amazonThe perception that brick and mortar retailers can't compete with online mega-retailers like Amazon has discouraged many local business owners from even trying to offer items online. However, there are many ways the average business can compete with a large entity like Amazon, even if the business only handles a small number of sales each year. For example, holding events and teaming with local businesses can help.

Surviving as a local business – whether you conduct business online or offline or both – is possible, even with Amazon's local services starting to make near-instantaneous deliveries to your customers.

The Threat of Amazon "Prime Now"

The internet is not new, and e-commerce isn't new, either. However, online giant Amazon has found a way to truly compete on a local level with small businesses with its "Prime Now" feature. Interestingly, Prime Now isn't Amazon's first foray into hyper-local sales. 

It first tried an app called "Amazon Local," but the company shut it down at the end of 2015. In 2016, they introduced Amazon Prime Now, which was a downloadable app that offered near instant delivery (one or two hours) for items like food and small gifts.

Business.com shares:

"As Amazon undercuts pricing schemes and has an endless aisle of merchandise comprising more than 200 million SKUs, it is a race to the bottom for omnichannel retailers as their profit margins reach unsustainable levels. Instead of trying to beat Amazon on price, where it has a home-field advantage, omnichannel retailers must be much smarter about discounts and product mix."

Local business owners that have relied upon local sales have been fighting against the considerable might of Amazon for years, but the advent of Prime Now has created urgency in the mind of the average small business owner. Is it possible for a small business to compete with a mega-company like Amazon?

1. Focus on customer service

One of the difficulties mega-sized companies experience is an inability to please every customer in every transaction. Selling an excellent product is just part of what a business can do to earn repeat business and build a positive reputation with the public. Customer service can become just as important to customers as a well-made product or service.

Companies like Amazon not only ship items directly from their warehouses, but they also allow sellers to ship products from other locations, too. While Amazon does make an effort to ensure sellers provide a certain level of communication and customer service, it's often quite easy for independent sellers to reflect badly on Amazon when they sell poorly-made items.

According to Inc.com, becoming a "customer focused" company can help a business stand out in a crowded industry. A customer-focused company must conduct research on customers and create a sales plan that increases the likelihood of obtaining new customers, as well as retaining current customers.

"The more you know about customers, the better you'll be able to help out. Research each customer thoroughly and when you meet, ask questions that deepen your understanding.  Such knowledge makes selling easier and increases the percentage of prospects that become customers."

When you conduct research on the type of customers who purchase your goods, you can create customer service strategies to match those demographics.

2. Create a rewards program

Customer rewards programs are an excellent tool for gaining information about your customers, and many customers will react positively to your rewards program when you offer simple benefits like coupons, free items, discounts, and loyalty rewards. Not only are today's rewards programs easy to set up with existing applications, but they're also affordable for small, local business owners.

Although creating a rewards program is fairly straightforward, the process should still begin with research into a program that benefits customers and the business. A helpful article from Intuit's Quickbooks site reveals:

"Seek a balance between making your rewards attainable for customers and creating a program that’s worthwhile for your business (such as requiring customers to spend a certain amount of money or make a certain number of visits)."

A rewards program that's complex might seem as though it would encourage participation from customers, but a complicated program could also cause some customers to avoid participating in the program. A simple rewards program that allows customers to obtain benefits from simple acts like making a certain number of purchases ensures the program benefits customers and gives the business valuable buying data.

Analyze the buying habits of customers by using a rewards program that feeds into a smartphone app or computerized system. Go beyond the traditional punch card that gives a customer a free item or service after five or ten purchases. Analyzing the buying habits, frequency, and retention rate of customers helps business owners take the right steps for expansion, change, and updates to the company's sales model.

3. Use creative packaging and wrapping

Distinctive packaging is a powerful and affordable way to spread the word about a business, and anyone who has ever seen the delivery of a package from Amazon knows how memorable the company's logo appears. Creating a unique and creative package for the company's products, as well as using boxes that feature a simple and noticeable logo, is using the same type of visual content as Amazon to increase brand recognition.

According to The Next Web, visual advertising is an essential part of the overall marketing plan a business must create.

"Communicating does no good if it's not retained by your audience. Today, it's easy for information to get lost or ignored if it's not in a digestible format. Integrating visual content can boost how much your audience absorbs and remembers."

Creating custom packaging often requires only minimal investment, even if a business must employ a graphic designer to renew, improve, or create a company logo. In some instances, the combination of a renewed logo and new packaging can help a business increase its reach without a huge sales push.

Here are a few of the ways new packaging can benefit a small, brick and mortar business even more or as much as Amazon:

  • Refreshed packaging on the shelf at the store will draw attention
  • New boxes used for delivery will be seen by passersby, which means free advertising
  • Customized boxes create excitement for the "un-boxing" of a company's products

Creating customized packaging need not use a significant portion of a company's budget, and a better logo can help improve the public's perception of the company as a savvy and modern organization.

4. Don't try to compete on price

One of the biggest barriers small business owners have in competing against Amazon is an inability to reduce prices on goods to match what the mega-retailer can offer on items. When combined with free shipping, it can become difficult for a small business to figure out how best to compete with Amazon on price.

The prevailing wisdom on pricing items to compete with Amazon is not to compete directly with Amazon on everything the business sells, but rather to concentrate on offering low prices on a small selection of items or less frequently sold items.

According to Internet Retailer:

"As Amazon undercuts pricing schemes and has an endless aisle of merchandise comprising more than 200 million SKUs, it is a race to the bottom for omnichannel retailers as their profit margins reach unsustainable levels. Instead of trying to beat Amazon on price, where it has a home-field advantage, omnichannel retailers must be much smarter about discounts and product mix."

A small business owner then has more than one option for luring customers with discounts. Decisions made on which items should see discounts and how much those items should be reduced will depend on the expected profit margin on the item, whether the item will increase the popularity of the overall business, and how many items the business owner might expect to sell of that discounted item.

Let Howard Packaging Help You Grow Your Small Business

Custom printed packaging and bags can help your business compete against mega-retailers like Amazon, as well as huge brick & mortar stores with an internet presence, such as Wal-Mart, Best Buy, and other "big box" stores. Are you looking for a sustainable and affordable option for your business's packaging and bags? Let Howard Packaging show you how easy it is to create a sustainable business with unique custom bags, wrapping, and boxes. Contact us today to request a Free Catalog and Sample Kit!
 

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