The Future of Online Retail for Small Independent Businesses
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Online retail was the small entrepreneur’s beacon of hope. It didn’t matter if you worked out of a 300 sq ft office in the outskirts of Mumbai. If you had a good product, you could connect with your customers online. “Just get on Flipkart! Just get on Amazon!,” people would tell. But Is it better than having your own website and spending thousands of rupees on Google Search? Yes! The process is fairly simple and giants like Amazon and Flipkart have a lot of processes in place that make your life simple. You can let them handle the delivery, you can opt for a consultant and you can even opt for a “sponsored” post.
Dependency on Big Tech
Customers don’t trust small retailers easily unless they’ve heard rave reviews from friends. So getting people to pay online and assuring them timely deliveries, is much easier when it’s on a large platform. You can ride on the trust and network they’ve built but it sure comes with a cost. Does it work for me? Yes. If you’re a small retailer, is registering on an e-com platform the first step to selling online? Yes. The only problem is that the small retailer maybe more dependent on these large platforms than he’d like to be. We already saw a large number of protests after Flipkart got taken over by Walmart. SMEs are afraid that they’ll get shortchanged, that Walmart will learn from them and launch its own brands. Their fears are not unfounded. Large online retailers have been known to pick up trends from the huge volume of data they see online and push brands out of business.
Advertisers of all sizes today are heavily dependent on Google, Facebook and Instagram. If you want to reach your millennial audience, where else are you going to go? And whether or not you sell anything, who makes money? That’s right, Google and Facebook. It’s the same with small businesses in India. The internet is dominated by big tech, and it’s just standard procedure to get on these big platforms to reach your audience. Organic growth online is tough and expensive to build unless you somehow by some stroke of luck go viral. But even for that, where will you upload your content? YouTube? Instagram? SnapChat?
Sure, online retail is tough for the small retailer. There’s no respite - you’re going to be consumed by one of these - search engine optimization, website traffic, Amazon search, Flipkart search, likes on Facebook, followers on Instagram and subscribers on YouTube. The trick is to choose one platform and build it instead of spreading yourself thin. The strategies to win in business remain the age-old ones, only the mediums have changed. There is hope for you only if you innovate.
Spend wisely on digital. Start small, see returns and then increase your advt spends. Simultaneously, showcase your brand at events where you will find your customer.
The Kirana Can Win
Online retail now is pretty much an imitation of offline retail. It’s the same old fight - multi-brand retail vs. the kirana. You can be a little independent kirana but then are dependent on people who know about you. In fact, the kirana might be slightly better off than its online avatar because it occupies physical real estate. In the online world, you can practically live in oblivion. Nobody needs to know about you just because you exist.
In the David vs Goliath story, don’t just focus on Goliath’s size. Notice, that Goliath’s eventual defeat is also because of his blindness. When you get big, you lose touch with what’s happening on the ground. You’re not nimble.
Last Mile Delivery
Just like kirana stores, volumes for small retailers can double if they are among the few who provide home delivery within a 5km radius. For further distances, they can tie up with 3rd party providers. Recently my Mother in law ordered sarees from Benaras. The carton was dispatched to Pune. Once it reached, it continued to lie in the warehouse of the courier company who did not deliver it. It had to be collected.
That's where a company like Amazon will win.
Partner with Complimentary Players in Metros or Towns
A small retailer has limited reach. It is difficult to provide fast delivery beyond a certain distance. To tackle this, identify one key destination that has a high concentration of your customer. Partner with a retailer there to take care of online order fulfilment for you.
You don't need tech, content production and other e-commerce services to be in-house. There are other small businesses who provide these facilities. Partner with them as if they are your own team and work closely to achieve your goal. Keep operations as lean as possible.
Sure, the internet is dominated by big tech but there are others who have skin in the game. Jio phones have access to millions of customers just because of the device. Indus OS an indian alternative to Google Play Store has access to a large number of users because it works for people who want to communicate in 23 regional languages of India. If you know your audience you can opt for an alternative platform to give you a traffic boost. Is this just trial and error? Maybe so. But then it’s so heartening to know that other options exist apart from what Silicon Valley has offered us.
Mumbai has more in common with New York than it has with Nashik. This is a comparison you’ve heard and believe is true. India isn’t one market and you have to choose your India. The 19-year-old Mumbaikar growing up on a steady diet of Netflix is drastically different from the 25-year old PhD in Assam who cares about politics. Sure, it’s a function of location but more than that it’s about money, upbringing, education and access to the internet. Understanding deeply how you consumer gets online, can save tremendous costs in outreach. If small retailers exploit this angle, they have a bright future.