As a small or medium ecommerce business, competing against ecommerce giants is no easy task. They have more resources, more capital, more public recognition. Most importantly, they don’t have to optimize for profits unlike the small guys. The latter is a huge advantage for giant ecommerce stores because it means they can overspend in areas like online marketing, just to gain market share.
So, while the small ecommerce stores are counting every penny invested in different marketing strategies, like AdWords, the giants can just raise the bid to an unprofitable amount just to gain market share. This doesn’t mean that they are careless; they just have different goals. Take Amazon, for example. For many years the company was not profitable just for the sake of growing exponentially, and now those efforts are yielding results.
But don’t get discouraged. You can still compete against giants; you just have to be strategic. By doing things like exploiting an unused niche sector or being more personable with your followers, you can gain the edge needed to stand out from the competition.
Who Are the Main Ecommerce Giants?
Before we go into details about how to beat them, let’s really understand how big they are. According to the 180 companies tracked by eMarketer, the total annual retail ecommerce sales are $201 billion. The top 25 retailers account for about 80%, which is $159 billion—that helps put things into perspective, right?
As you can imagine, Amazon, Wal-Mart, and Apple take the top 3 spots. Their revenue is partly related to their advertising budget. For instance, Wal-Mart had a $2.5 billion worldwide advertising spend in 2016.
Find an Unexploited Niche Opportunity
Niche marketing entails focusing on a targeted, well-defined segment of the market. For example, if you’re selling t-shirts for men, instead of selling to all the men population in the U.S., you would sell t-shirts for firefighters. Niche segments are many times untapped or underserved, which makes them great focus opportunities. By focusing on such sectors, you’ll reduce or eliminate all competition, allowing your business to become the go-to store in that space.
When considering niche opportunities, think of it as a “creative” process rather than a “finding” one. While there may be good niche markets that are underserved, finding new untapped opportunities provide more potential to succeed. Being the only one in the space means zero competition and faster adoption rate from new customers.
To find new opportunities, start by analyzing the market to discover all the players in different sectors and doing research to find new opportunities. Going back to the t-shirt business example, you would do research to find all the t-shirt companies that already exist. Then, you would analyze the market to discover if there are any untapped opportunities.
Once you find good potential opportunities, assess the size of the market. It will be significantly smaller than a generic one, but it should be big enough to be worthwhile. Consider that while an offering in a new sector may have a fast adoption rate, it may take a great deal upfront efforts to get brand awareness. People have to be slowly introduced to a new concept and products.
Provide Different Benefits than your Competitors
While there are certain benefits you should have in common with your competitors, such as free shipping, offering unique benefits can help you stand out. These kinds of benefits can serve as your unique selling proposition. They can help answer key questions like what makes your business different or stand out from the competition. Answering these questions effectively can persuade buyers to choose your store when evaluating purchasing options.
For example, as a small player, you may be able to offer your customers a higher level of personalization and customer service than your competitors. Giants like Amazon can’t offer a one-on-one customer service experience like you can. Offering this kind of personal interaction lets the customer know that you care about building customer trust and customer loyalty. This can help you increase sales, on average, loyal customers are worth up to 10 times as much as their first purchase.
Another way to stand out from other ecommerce giant competitors is to offer a more customized shopping experience. For instance, you can offer products that are made to order following customer’s measurements. Crisp clothing is doing this by offering 3D shirts that are guaranteed to fit perfectly. Customers simply enter a set of different measurements online, and they then get a premium-quality shirt delivered to them.
When brainstorming about potential unique benefit offers, take into consideration what your competitors are offering and what’s not working for their customers. This information can be collected by reading online reviews in multiple sources to get an idea of constant negative feedback.
Maybe their quality is off, or customers feel like the product is missing a feature. Taking all of this feedback into account will help you develop an enhanced offering. Once you have a good idea of what to offer, test it and make changes as necessary according to the feedback you receive.
Be More Personable
Social media marketing has changed the marketing game, demanding brands to become more human-like with their followers. People want to engage with brands at a deeper, more meaningful level. They want to learn their stories, see behind the scenes pictures, and know how they feel about a current issue. Those kinds of interactions make a brand interesting to follow.
Nobody wants to get social media updates where brands are just trying to sell something for the sake of selling without attempting to make a deeper connection. Also, social media helps to define a brand’s personality and build customer loyalty.
Having those kinds of human-like interactions may be tough for ecommerce giants. They have hundreds of people on their staff, with different opinions, which can make it difficult to agree on a single choice. Moreover, it can make it tough to react in a “real” way to a situation in fear of not being politically correct.
On the other hand, as a small ecommerce business, you can capitalize on your small size. You can create more personal videos or other types of content to promote your brand. This will give you an edge on social media that your competitors might not have due to their size.
Try to “put a face” behind your brand by constantly showcasing yourself or anyone in your team, as the image behind your store. What better way to make your brand human than showing actual relatable humans behind your posts?
Last, think of your social presence as story-telling. Studies show that, regardless of the content of an ad, the structure of that content predicted its success. As a researcher at John Hopkins, Quesenberry, stated: “People are attracted to stories because we’re social creatures and we relate to other people.”
If You Can’t Beat Them, Join Them
Many sellers think that they have to choose between selling on Amazon or selling on their own estore. The truth is that both online presences can coexist. So, if you can’t beat them, take advantage of them and use them as a platform to get additional exposure for your brand.
Many of your competitors may be already listing their products on platforms like Amazon, eBay, or Etsy, so, if you don’t, you’ll also be losing market share to your competitors in those spaces.
Just keep in mind that while these platforms may be useful to gain exposure, they can also cut down your profits. For example, when selling on Amazon, you may have to lower your prices to be competitive with other product listings. If you’re doing FBA, your profits can become even slimmer.
When selling on other websites, make sure to insert branding materials in your packages. For example, you can insert branded stickers or small thank you notes with your website address. When buyers get your products, they’ll get a chance to get acquainted with your brand. They may even visit your ecommerce store to check out your complete catalog!
Competing against ecommerce giants may be scary, but it’s not impossible. With determination and the right ecommerce strategy, you can stand out from big competitors and create a unique brand.
Consider focusing on a niche market to be in a less competitive field. Also, think how you can differentiate from competitors with unique offers and benefits. They will help you stand out from your competition.
Last, don’t forget to capitalize on your small size! Create a more one-on-one premium customer experience. Finally, contemplate increasing your brand’s exposure by having a presence on the main ecommerce platforms.