Some See Big as Bad in Online Retail
Mom & pops often find some of their best customers are those who purposely avoid shopping major retailers, like Walmart. In the same manner, some smaller online stores are tapping into those looking to avoid filling the coffers of the bigger online players, like Amazon.
An article in The New York Times quotes Harold Pollack, a professor in Chicago, who used to spend $1,000 a year at Amazon but now only shops at smaller websites. Mr. Pollack said of the bigger e-commerce players, "I don’t feel they behave in a way that I want to support with my consumer dollars."
Any increased favor of ‘small’ over ‘big’ in the digital world comes as the larger e-commerce players — flaunting unbeatable pricing, free shipping and easy-to-use apps — are taking an ever-increasing share of the e-commerce action.
According to comScore, the 25 biggest online retailers, including Amazon.com, Target.com and Walmart.com, received 70 percent of e-commerce dollars spent this past November and December, an increase of three percentage points over last year. The biggest online stores also saw a 19 percent jump in revenue over the 2011 holidays versus 2010, while smaller online retailers saw a seven percent gain.
The biggest potential target in a backlash would be the biggest online retailer, Amazon. The company is gaining more publicity for what many see as their "bullying" tactics against the publishing industry, its tax breaks and other ways it gains advantageous pricing. Its controversial in-store pricing app this past holiday season was seen by many large and small retailers as an unfair price-comparison tool.
According to the Times article, smaller online stores — many of which are run by brick & mortar independents — are trying to capitalize on their few advantages. These include being able to extend more personalized deals such as gift-with-purchase that the bigger e-commerce sites can’t manage. If possible, many avoid carrying the same items as the bigger sellers that draw direct price comparisons on web searches.
Unable to match their massive inventories and deep discounting, however, smaller online players seem okay with playing up their smallness as a selling point.
Lacy Simons, owner of Hello Hello Books in Rockland, Maine, a small store with an e-commerce site, told the Times, "We know there’s only so much that we can do to compete against them, so you end up relying on what hopefully becomes an emotional or personal connection with the retailer online."
Michael Walden, a professor who studies regional economics at North Carolina State University, said "local" fervor can translate on a wider scale. He said, "A large number of Americans have a general suspicion of bigness in the economic world — they equate bigness with power, monopoly."
- Online Shoppers Are Rooting for the Little Guy – The New York Times
- The biggest online retailers make the big gains in market share – Internet Retailer
- Is Amazon.com an online bully? – Techflash
- Furor surrounds Amazon’s price-comparison app – Los Angeles Times
Discussion Questions: Do you see a consumer backlash coming against larger online retailers? If you were advising a smaller site competing against big online players, what would you tell them to focus on?