Multichannel selling proves difficult for small merchants
Everyone knows that selling online can be a significant boon to potential business. However, multichannel selling has proven to be quite challenging for some small merchants, simply because the blueprint to success is often different when compared to some the bigger competitors out there.
For example, when people conduct Google searches for products, the first results generally tend to be the major retailers. To make matters more complicated, even small changes in Google’s search algorithms can results in big problems for less-popular sellers, as they often do not have the same resources as larger merchants to quickly reoptimize their websites to conform to the new algorithms. And the big guns such as Amazon and Wal-Mart have strong brand loyalty and seemingly bottomless budgets that allow them to constantly shift and come out on top.
That is not to say that smaller merchants can’t garner big sales online. In fact, Internet Retailer found that Second 500 sellers collectively managed to grow Web sales in 2014 to $6 billion, a 14.4 percent growth from 2013. That rate of growth is actually 4 times faster than the average 3.5 percent increase observed in the United States retail industry.
According to Sucharita Mulpuru, vice president and principal analyst at Forrester Research, one strategy small and midsize sellers could use is focusing on niche products and audiences. Do not try to beat Amazon at the company’s own game by selling everything – a brand should instead become an expert in a certain field and serve a specific audience more effectively than Amazon can.
“When you’re a small business, you’ve got to eat and figure out how to make a profit,” Mulpuru told Internet Retailer. “But that means they can’t sell the same product that everyone else does. You need to be hyper-focused on your niche, develop products to support that niche, own them uniquely and use traditional marketing to get the word to help drive those sales.”
Mulpuru pointed to Adore Me, a Web-only seller of women’s undergarments, as a prime example of a second 500 retailer that has found a niche and has quickly been able to acquire customers and grow its brand. In addition to driving sales, Adore Me has also gained a strong following in search and social media as well.
Preparing for growth
Serving a niche audience is one way to establish a foothold in an otherwise competitive retail market and drive profits. However, small retailers looking to maximize their profits will also need to keep a keen eye on their operations as well – many rely on manual processes and outdated tools that wind up eating into their margins as a result. These solutions may even hinder growth if they are not flexible and cannot scale as new business comes in.
Scalable and integrated solutions can help them improve various operations across the board, ranging from order fulfillment to inventory management. Not only can deploying modern eCommerce solutions bolster small and midsize sellers’ efficiency, it can also improve their ability to serve their customers adequately – a big key for retailers operating in niche markets.