Are local retailers ready to flex their omnichannel muscles?

Discussion
Photo: @mylove4art via Twenty20
Jan 05, 2021
Tom Ryan

By many indications, scores of independent retailers have rushed to launch or expand e-commerce, introduce curbside pickup and local delivery and amplify their social media presence to survive the pandemic.

The moves should position independents to compete more effectively in a post-pandemic world. Evidence has been largely anecdotal, with numerous articles detailing the drastic shifts local shops have taken given pandemic-driven restrictions on their physical stores.

Among the few surveys, one released in June from the Running Industry Association, which supports independent running shops, found curbside pickup being embraced by 94 percent of running shops; home delivery adopted by 75 percent; vendor drop shipments, 87 percent; and virtual shopping (e.g., Facetime), 52 percent.

Another report from early August from Faire, the online wholesale marketplace for independents, found 70 percent of local retailers investing in new or existing online channels during the pandemic.

In a column for TotalRetail, Max Rhodes, CEO at Faire, said many independents are taking advantage of their proximity in email marketing. He wrote, “While large chains struggle with reaching beyond highly repetitive promotional content, smaller retailers are able to offer unique connections with customers on a more personal level.”

According to American Express, 56 percent of U.S. consumers shopping on Small Business Saturday shopped online with a small business, up from 43 percent for the day in 2019. More than 50 percent of those who reported shopping small on the day supported a local business through social media.

Larger chains have likewise significantly enhanced their omnichannel practices due to the pandemic, although many Americans have expressed a desire to support local businesses during the time.

A recent survey from Comcast Business found 46 percent of consumers were more likely to patronize local or small businesses this holiday season. The top reason for shopping small was to give back to their communities, cited by 53 percent. Asked which technology features would make them more likely to shop small businesses more often, the top answers were BOPIS, 44 percent; curbside pickup, 30 percent; and contactless payment methods, 21 percent. Three quarters agreed it’s important that retailers offer online shopping.

DISCUSSION QUESTIONS: Do many independents appear to be in better shape to compete online and omnichannel against bigger retailers coming out of the pandemic? What further investments may be required? Are independents necessarily at a disadvantage in the battle for omnichannel shoppers?

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Braintrust
"When they are ready, they will collaborate with trusted technology partners with proven industry results to bring the right solutions to their stores."
"Independent retailers have been agile enough to adapt to the changing times with online delivery, BOPIS, curbside pick up and more."
"Online commerce gives small businesses a chance to “punch above their weight” against the big stores."

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23 Comments on "Are local retailers ready to flex their omnichannel muscles?"


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David Naumann
BrainTrust

Implementing omnichannel technology and processes is a huge investment that many small local business can’t afford to tackle, especially with soft sales due to the pandemic. However it is essential that they find a way to deliver omnichannel shopping, especially during the pandemic. If they can weather the storm of the pandemic they may be able to survive with local in-store traffic, but almost all businesses need to find a way to offer online options.

Katie Hotze
Guest
3 months 17 days ago

Small businesses have the luxury of being nimble with rapid test-and-learn practices that simply can’t be executed smoothly or quickly at enterprise retailers.

Xavier Lederer
BrainTrust

Great point Katie, I totally agree with you. The question is: how will local retailers remain competitive in the long run? A small retailer’s main competitive advantage is often its location and physical visibility within the local community. When consumer behaviors shift online, small retailers lose part of their competitor edge – and now have to compete with much larger brands from across the country, with much larger marketing budgets. The shift to online will force many local retailers to refine who their core customer is, and which specific problem they solve for them.

Karen Wong
BrainTrust

Great points. Luckily a lot of proximity digital marketing is now accessible to small retailers. As long as they can digitize enough to move their businesses online, there are ways to localize visibility online.

Shep Hyken
BrainTrust

Smaller/independent retailers can make quicker decisions and put ideas into action much faster than larger retailers. That said, the success of the independents in the midst of the pandemic has been due to hard work and great flexibility. Customers don’t see it as omnichannel. They see it as convenience. Invest in being easy. Invest in systems that allow for good communication and personalized promotions. The costs have come way down on technologies. In some cases, the independent has an advantage. They get to know and cater to their customers better. They must seize that advantage.

Neil Saunders
BrainTrust

Omnichannel is critical for all retailers: big and small. Fortunately, there are many platforms and technologies that smaller retailers can deploy to quickly get online and start offering services. Many have done so and have benefitted as a result. There are some challenges in implementing the processes, but most retailers can easily adapt. The bigger challenge is often getting the word out to local people and getting them to use the online store in a habitual way.

Jeff Sward
BrainTrust

The “shop local” mindset has emerged with new top-of-mind awareness for consumers everywhere. The pandemic accelerated the decline of mall shopping so local merchants are better positioned than they were a year ago. So they absolutely have to be in a position to take the next steps of curbside pick up and local delivery in order to take advantage of this new mindset. It can only get stronger if local independent merchants take maximum advantage of the moment. Surviving malls are going to be fighting hard to win back shoppers.

Di Di Chan
BrainTrust

Independents have the advantage of upgrading much faster because most are not contemplating if they should reinvent the technology wheels and build their own in-house solutions or beta test on their own customers. When they are ready, they will collaborate with trusted technology partners with proven industry results to bring the right solutions to their stores.

Lee Peterson
BrainTrust

Depends on the mindset. OK, this anecdote is about restaurants but it translates to the rest of retail. One local restaurant shifted immediately when COVID-19 hit with a new app, upgraded website, safe BOPIS, improved social media, etc., and their business is rockin’ — I mean rockin’. Another waited for the bailout, complained to Washington but did nothing on the ground. They’re still recovering and closing some units.

To me, therein lies the story. If retailers move fast and invest no matter how much it hurts initially, they’re going to be in a great position not only in the moment, but for a long time to come. This unique period in retail history is not even about “fail fast” anymore. We all know what needs to be done. It’s about FAST. Period.

Michael Terpkosh
BrainTrust

Independent retailers who understand their communities and participate in their communities continue to be succesful against bigger retail chains. This has been amplified during the pandemic as more consumers have relied on these local retailers for goods and services. Providing online services to consumers has been key to the success of independent retailers during the pandemic. As the shop local trends show, more and more consumers understand the connection between supporting independent retailers and the health of their local communities.

Brandon Rael
BrainTrust

It has been impressive to see how quickly smaller indie retailers have pivoted to an omnichannel business model that enables their customers to leverage BOPIS and curbside pickup options. While indie retailers may not have the significant capital that a larger retailer does, the Shopify platform has enabled smaller companies to have a digital presence. This gives customers the option to pick up their online orders at the retail store, curbside, or any other location.

The Shopify platform and the good will of consumers show that community-based businesses are a winning combination that has helped revitalize the local main streets. Indie retailers have a clear advantage of being flexible, pivoting on the fly with minimal risks and investments by leveraging affordable digital platforms.

Gene Detroyer
BrainTrust

Everything online is all about critical mass. The more mass that is generated, the more resources are applied and the circle just continues. Small independent retailers are at a huge disadvantage to the likes of Amazon and Walmart.
There is no way they can possible match not only today’s offerings but the technologies that will surely accelerate. That doesn’t even address the mindset of the shopper that is already set with a default location if they want to buy.

Dave Bruno
BrainTrust

I’m not convinced that offering omnichannel flexibility gives independents a competitive advantage over national chains, but it certainly gives them a fighting chance to earn the business of people who care about shopping local. Their real competitive advantage lies in their proximity to their target customers, which gives them a chance to highly curate experiences, assortments, and omnichannel options to the desires and expectations of those local shoppers. Being smaller also gives them more agility to adapt as those local preferences inevitably shift.

Rodger Buyvoets
BrainTrust

The advantage for local retailers is just that: they can personalize on a local basis (a huge advantage being proximity to their target base), while their small scale usually means being flexible and open to change. Adopting an omnichannel strategy would be beneficial – there’s no doubt about that. But whether they can collect and leverage online data in the same way omnichannel champions are doing it (e.g., Amazon), I’m not so sure. To really prove they can battle it out, it’s imperative they find omnichannel solutions that take advantage of their proximity, flexibility, and hyper-personalization.

Dave Wendland
BrainTrust
Throughout our company’s 40-year history working with independents, we have found them to be nimble, resourceful, and resilient. In the face of the pandemic, we witnessed this in action. HRG recently conducted research into the independent pharmacy channel and discovered that shoppers rated delivery three times more favorably compared to a similar survey eight years prior. This is a strong indication that community-based pharmacies have responded well and redoubled their efforts in this area. The survey also revealed that pharmacy’s commitment to expanding e-commerce presence and product coverage is a key priority. There is much work to be done by independents across all retail segments to fully deploy an omnichannel strategy. They must remember that it need not be be perfect out of the gates but it must be launched — NOW. I’d encourage three investments: 1.) Inventory alignment – get the right product data onto the site as quickly as possible (data, images, content); 2.) Transaction ease – stumbling with this part of the equation can be disastrous; and 3.) Seamlessness – e-commerce is… Read more »
Georganne Bender
BrainTrust

Independent retailers embraced whatever it took to save their businesses in 2020 because if their stores closed they had way more to lose than just a job.

Indies sold online and via social media utilizing companies like Shopify and Comment Sold. They adopted BOPIS and curbside, personal shoppers, and every other convenience the big chains employed. Independent retailers may not have the same deep pockets as the big stores but they are creative. And ingenious.

Matthew Pavich
BrainTrust
Developing better online and omnichannel capabilities was merely a qualifier for local retailers in 2020 that was mandated by extreme circumstances. All retailers (large/small/local/national) needed to up their game and offer new channel experiences for their shoppers to stay relevant. By definition, omnichannel and online shopping forces small local retailers to compete against larger global players. The larger retailers will always have the advantage in scale, supply chain, advanced analytics and financial stability. As such, local retailers need to focus on their true advantage which is their deep knowledge of their local market and consumer. To go beyond “qualifying” and become a winner, local independents need to do all of the things that made them special in the first place – relevant products (especially locally made) and experiences that speak to their local demographic. During a particularly trying time for a lot of struggling people, local independents also have the unique opportunity to support their communities in a way that is harder to replicate at a national level. The best local retailers offer something special… Read more »
Rich Kizer
BrainTrust

No one can argue about the new innovations in shopping having widespread appeal to shoppers, especially during the pandemic era. And that widespread appeal has forced, to various degrees, the smaller retailer join in as best as possible. Are independents at a disadvantage with shoppers? Yes, perhaps in some areas. However we have seen independents thrive utilizing other available strategies. For example, the frequent use of Facebook videos that feature new products that just arrived, walking through the stores with staff members explaining and showing new product offerings, etc. Most of these type of efforts by homegrown staffers have had marvelous results. But all that “local” flavor and effort does not mean the local retailer is not on the high tech hunt. We have seen brilliant small retailers adopt high tech strategies to sell products. The difference between them and the larger retail players is, they didn’t have to invest boatloads of money to get into the game.

Ralph Jacobson
BrainTrust

I’ve always felt that online presence can be the great equalizer. Online commerce gives small businesses a chance to “punch above their weight” against the big stores.

Bottom line, make it painless for the shopper and the company leadership should personally “shop” their own websites and their competition at least weekly to improve its seamlessness.

Bindu Gupta
BrainTrust

Independent retailers have been agile enough to adapt to the changing times with online delivery, BOPIS, curbside pick up and more. However to stay afloat they will need to invest in technology that will help them reach their target audience at every interaction point. Luckily, the pandemic has also paved the way for technology providers to support small and independent retailers through cloud-based solutions which are easier to implement as well as affordable.

David Adelman
BrainTrust

The pandemic left many independents with no choice but to trim their operating budgets, including much-needed online upgrades. However those independents that had the foresight to stay in constant contact with their customers during the pandemic will come out much stronger!

David Mascitto
Guest

While going online is a necessity in a locked-down world, it will be important for these independent retailers to have a strong grasp of the e-commerce CX, which even major retailers need to regularly tweak/perfect, especially when it comes to inventory visibility and fulfillment.

James Tenser
BrainTrust

With few exceptions, I think local retailers and restaurants have little choice but to jump on the e-commerce bandwagon. The good news is, they have several platform options on which to build a presence. Amazon and Shopify are the most widely used marketplaces, but there are other ways worth considering too. In the grocery world, for example, there are probably a half-dozen specially designed solutions, with mobile apps included, that can be white-labeled.

Every retailer needs some form of curbside pickup, at least. Many need a process to accept and ship online orders. Restaurateurs need a system that lets them bypass third party delivery services which soak up all the margins. Even independent service companies, like hair salons and barbers, can benefit from digital scheduling and payment tools.

This requires some investment and a learning curve for a small business, but tools and help are not scarce. Local tech experts are plentiful these days too. Whether SMBs feel ready or not, it’s time.

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Braintrust
"When they are ready, they will collaborate with trusted technology partners with proven industry results to bring the right solutions to their stores."
"Independent retailers have been agile enough to adapt to the changing times with online delivery, BOPIS, curbside pick up and more."
"Online commerce gives small businesses a chance to “punch above their weight” against the big stores."

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