comScore reports that in the last year small business retailers online have lost 5.6% market share to their larger competitors. Does this spell the end of small business?
First, let’s discuss the reasons for the shift from small business to large business. Prices. Remember when we said that prices are the No. 1 reason consumers choose to do business with a company? Well, in a downward economy, what’s the first thing that happens? Prices fall.
Unfortunately, it’s the big retailers that win when prices fall. Small businesses tend to compete on price in good economies so when prices fall they don’t have as far to go. That means small businesses have to compete in other areas – like service.
Another way small businesses are able to compete online is with free advertising – i.e. social media. It doesn’t cost anything to use Facebook, Twitter and LinkedIn, and often a small business can see a greater return on investment because you don’t have to spend a lot of time on these sites to make a difference. A big business has to pay someone to manage accounts, but you can do it yourself in as little as fifteen minutes a day.
It’s not the end of small business. You just have to be a bit more creative in your approaches to marketing and compete on service, where you can always have the advantage.