With the holiday shopping season starting this week, small businesses more than ever need to position themselves as go-to purchase destinations over big retailers like Walmart and Amazon. Here is a primer on what SMBs should expect the first week of the holiday season.
According to Aprimo, showrooming, the practice of comparing online prices on smartphones while shopping, is here to stay — with 96% of consumers saying they are using or eventually planning on using this strategy. Black Friday is all about low prices, and the SMB’s problem with showrooming is that it may lead to a confrontational sale or a non-sale because a low online price can’t be met. To prepare for Black Friday and the rest of the holiday shopping season, SMBs need to research the lowest prices being displayed online for products they sell, and determine a pricing structure of “lowest online price + alpha” that will persuade a consumer to purchase from them. The alpha could be:
- Shipping cost plus a “take it with you now” premium. One main advantage of local retail is the instant gratification of the transaction.
- Freebies like warranties, extended return periods, bundled products or free gift wrapping.
- Deal offers redeemable either in-store or distributed earlier for Black Friday consumers
- Perks like free coffee or snacks, or free wifi for harried shoppers. Particularly when there are lines forming for store openings.
The big advantage of Black Friday is the store traffic of bona fide buyers. The key is to ensure the customer leaves, if not with the purchase, with the impression that the retailer will always be there for high-touch service. Building and maintaining the customer relationship is an asset that Walmart store clerks and UPS can’t touch.
Unfortunately, consumer focus on pricing sometimes can make SMBs seem like villains who won’t price-match. I’ve heard more than a few cringeworthy pricing arguments in stores between salespeople and consumers along these lines, and you probably have too. Countering this requires consumer education. SMBs need to make consumers aware of the higher purpose of the Shop Local movement, most elegantly scripted at the 3/50 Project.
For every $100 spent in local stores, $68 returns to the community through taxes, payroll and other expenditures… Spend it online, and nothing comes home.
There really is a financial as well as a community benefit to shopping local that most consumers simply can’t rationally quantify. Three years ago, American Express created the “Small Business Saturday” brand to support shopping small, and this year AmEx offers their cardholders a $25 credit for purchases made at designated small businesses who registered with its Shopsmall.com site. The most enduring result of Small Business Saturday has been in uniting small businesses to promote and celebrate each other, most conspicuously in the comment streams at its 3,000,000+ likes Facebook page.
The political climate also favors the celebration of small business, which both parties fell over themselves to espouse in the recent presidential election. I think consumers may see the Shop Local movement as a component to rebuilding the economy, and this change in attitude will differentiate SMBs more distinctly from the pricebusters they currently compete with.
#GivingTuesday, on November 27, is a new branded day to celebrate and support good causes. The brainchild of New York’s 92nd Street Y, #GivingTuesday seems destined to be institutionalized yearly by filling a humanitarian need not addressed by the more commercial days. Jessica Schneider of 92Y discusses how #GivingTuesday is evolving. “The response has been overwhelming, coming from all 50 states. We were pleased to put together a great team of influencer and partners from organizations as diverse as Unilever, the UN Foundation and Facebook. And all of us who are executing on this design are simply volunteers tied together for a couple of months to make this happen”.
Nonprofits should get involved with #GivingTuesday for the same reasons SMBs registered for Small Business Saturday; it gives local causes a day of unity that will evolve into a communal support system. SMBs can get involved simply by partnering with local causes and donate a portion of their sales. The spirit of many individuals from all walks of life putting together an ad hoc event is a testament to the idea that anything can be a startup.