The specialist shop is dead on the web- discuss

[Rupert]

Just interested in your guys opinion on this. I am watching the web go the natural way of the world, where the big get bigger, and there is less room for the little man.

i am not saying give up now, but I do think that the opportunities of the early days are diminishing, and the big guys have more and more sewn up.

In the retail space, everyone is trying to supply everything now.  Ebay, Amazon, Play to name just three internet only players.  Then there are the big dept stores, and the Tescos etc online offering everything from clothing to food to white goods.

They are lets face it, getting quickly better at reaching the people and so the smaller one trick player is bound to get squeezed out, if only because they do not and will never have the marketing dollar, or the customer base to cross sell.

[nffc]

I sort of agree, certainly in comparison to years past the big players do seem to be doing a much better job. Having said that I think people will still continue to recognise and seek out the "specialists" and that these big niches will be with us for many years to come. The product knowledge of the smaller guy will win, maybe less than before but the market is now so much bigger.

I think the other big change is that now in many cases the big guys are trying to make out they are not, that doesn't make much sense but think of brands like http://innocentdrinks.co.uk/ . That's what the big players really want to be (perceived) like whilst at the same time (and rather bizarrely I might add) the little guys are trying to pretend they are like the big guys.

Celebrate smallness!

[keano]

I suppose there is an argument which says that the small, specialist retailer has the detailed knowledge of the niche that can be passed onto the customer in terms of detailed product recommendations and finely tuned customer service in general.

Although larger players can scale operations and often offer lower prices, it is the unique service that they can't replicate. I suppose it just depends on the niche that a person is in and whether it is particularly price sensitive or not.

That said, if the larger players are hoovering up all the rankings in the serps, regardless of price, service, etc it is debatable whether the smaller operations will even have the visibility for a customer to make an informed choice.

[I, Brian]

I think it's all about finding your niche still.

Electronics isn't a niche - CB systems is. Computer games isn't a niche - Amiga games are.

I'm just developing an ecommerce site for some very niche products the big guys do not sell, nor do I think they will.

There is still opportunity I think to be a big fish in a little pond - there are some ponds too small even for corporate sized fish.

[dogboy]

I don't think there is a competitive advantage being small, unless you are also unique. IMO great customer service online isn't really what people want.  They want, whatever they want, cheap.  In fact they are willing to forgo 'service' for 'cheapness'.

People wondering around in the real world are not educated buyers.  They are lazy buyers. Proximity to purchase is critical, and a bird in the hand is usually worth two in a strip mall, 5 miles a way.  That isn't because the the product price is cheaper, it's because there is time/effort/gas parking to also consider. Online, people don't invest in going anywhere. That's why Black Friday doesn't work online... in real life if you stand in line all night long to get in a store, you are going to buy SOMETHING, even if they sold out of the thing (the 'loss leader') you came for.  Online, if they don't have what you want online, you are gone in the click of a mouse to go find it.

That brings up the whole idea of substituting. Online, people are 'educated' buyers, relatively speaking.  They surf as many sites as they need to get educated, then they surf more sites to find the right price.  Then once they are assured they have the best price, they look around for some basic consumer confidence signals, then drop the hammer on the purchase.  In real life, you are faced more often with substitutes, and you probably take them more than you would online, again because there is a real cost of effort involved, and if you don't get it 'now', you aren't going to get it.  Online if you can't find what you want, you will look harder to find exactly what you want before you accept an alternative, because the act of looking online is easier online, because it doesn't involve travel and parking, just surfing.

So what does all this mean? Nothing good for the little guy.  Walmart is taking over the world offline, Amazon online.  If you sell the same stuff as they do online, you are screwed because they work off of no margin.  If you add customer service, it only prices you higher, and your customers will use you for education, then once they are ready to purchase, they will leave and purchase where it's cheapest.

[Rupert]

Well, a farmer down the road sold his chicken processing plant to Moem, (I think thats what they are called).  They are big Chicken processors, and do 10,000 per hour from the factory now.   He put it this way:

There are plenty of bread crumbs to be picked up off the corporate table.  They are messy eaters

I am not sure the web is the same though.  That thread about the serps disappearing behind a fog of ads worries me. I can always try to rank for "red spotted plastic widget" instead of "red widget"  but as the big guys get bigger, they will find it easier to rank for the crumbs as well.  When it is a matter of matching the algorythm, and  they have the authority, then hey, it gets more difficult again for us.

Eventually, I can see it getting easier for me to get business offline, than it is online again.

argument which says that the small, specialist retailer has the detailed knowledge of the niche that can be passed onto the customer in terms of detailed product recommendations and finely tuned customer service in general.

I think it will always be true. Same with your comment NFFC.  But if we cannot get the traffic....

I see loads more shopping on Amazon this year.  They seem to have a trust with the customer, and it is so easy to search.  Hell, I do more shopping with Amazon than I do with any other shops.  Small shops can be a pain.  

Code Select Expand

They want, whatever they want, cheap.  In fact they are willing to forgo 'service' for 'cheapness'.   My one hope is that that is not always true.  That some people still appreciate a person on the end of the phone, someone who will pick up the pieces when things go wrong with delivery if they can.

[dogboy]

Let's not forget the obvious here... the big guys are big because they are successful.  Little guys are small because they are not as successful.  And if they happen to become successful, then eventually they will grow to be big.

[Brad]

On a retail level:

1. You need to sell something truly unique that people will go out of their way to get. If it got unloaded from ten thousand containers from China it ain't unique.

2. Don't try to compete on price with Walmart or Amazon. Try to go for snob appeal (think Orvis or Willaims and Sonoma) where people will pay a premium for buying through you.

3. High margin items are good.

4. Be prepared to change as the public demand shifts: (ie: in 2004 it was far easier to create a used niche bookstore online than it was in the Dirt World, by 2011 ebooks have made their mark. It is still possible to make a used online book store because so many books from 1925 - 1999 are out of print and will probably never get digitized, but demand has sagged and profits are thin.  Build a Plan B while Plan A is thriving.

[Gurtie]

There are places the small guys can get a foot up from which aren't available to larger retailers - places like notonthehighstreet and etsy are increasingly well known and I think a lot of people who find companies there then become loyal customers of those companies seperately. Unfortunately though it costs and its not always easy to sell via someone like that.

Thats just one opportunity though - look at the sites adverising in the back of Country Homes and other mags like that - and how often they're sold out of the featured prodicts - I still believe the small guys can make a living - It's just harder to get in front of people in the first place now as search is increasingly biased.

[dogboy]

>It's just harder to get in front of people in the first place

yeah, I think that's it, really.  Being number one now isn't really what it was, adjusted for 'inflation'.

[ergophobe]

I am coming up on the one-year anniversary of launching a retail site for a friend. He will go from zero to $200K in revenue this year. He is very niche and, more importantly, he has a flagship product that he controls (i.e. he owns the patents). That brings people in and they buy other stuff.

Not sure where he'll go next year, but compared to selling through bigger sites that want goods at wholesale prices, this has been huge for him. It's opened my eyes to the power of one really good and unique product in your product line, the thing people just can't get anywhere else. You bring them in with that and they pick up all sorts of other stuff while they're there.

[dougs]

We arguably control some decent amounts of traffic in the UK (250,000 visitors per day) and sadly we now really only deal with the big guys. Simply because it is much easier to have 50 relationships than 1000.

In 24 months if you are small and compete with the big guys you are stuffed. The big guys are getter better at seo and ppc, utilising people on this forum to do it. They have big budgets and hoover up all the traffic. If you are clever with seo you will have competition from the big boys but also google will put its own spam in front of you.

So what to do?

Build loyal customers...loyalty schemes
Build email data,
Build facebook friends
Build facebook apps
Build toolbars
Build mobile apps
Do mass useability testing

Continue to get new visitors via ppc,seo but convert them to one of the above.

Doug

[jetboy]

There were obvious niches when Amazon was just Amazon, but introducing Amazon Marketplace changed them from being a huge department store into a huge city centre. Having said that, there are niche sites like Figleaves and Firebox that have done well, and I'm sure a big part of that is that they can offer a better shopping experience than Amazon just because they're not trying to be all things to all men. Yes, it's got a lot harder over the years, but that's life in a maturing marketplace. Similarly, SEO's got more difficult (and competitive) than it was when we were bothered about Infoseek and AltaVista. Those who've adapted can still make a living out of it (while pining for 'the good old days' ).

[dougs]

There are more opportunities appearing everyday, once your mind stops thinking about google all day.

DiscountVouchers.co.uk pulls most of its revenue from none google traffic

Doug

[Rupert]

But where did the sign ups come from in the first place dougs? Someone had to know you were there.