How Small E-Tailers Can Thrive in the Age of Retail Consolidation

Do small and new online retailers have a chance to succeed anymore? Industry analysts say that 2017's parade of acquisitions by major retailers — Whole Foods by Amazon.com, Kate Spade by Coach, HSN by QVC, among others — are making it harder for smaller retailers to survive. How can SMB sellers compete with these players’ same-day delivery, vast selection, rock-bottom prices, and free shipping? The secrets to surviving and thriving now include careful selection of niche products and markets plus a commitment to excellent, personalized customer experiences.

Choose the Right Products, Customers and Markets

Due to their economies of scale, Amazon, Wal-Mart and other enterprise retailers are largely unbeatable on price. Smaller retailers can stand out by offering unique products that these mega-retailers don't have access to, whether that's handcrafted goods, high-end luxury items or something else, and marketing to customers who have the disposable income to buy them.

Markets matter, too — especially if you're selling niche products. In order to build a customer base large enough to grow and sustain an independent online store, it may be necessary to sell across borders, either from the outset or by expanding into new markets as time and resources allow. The worldwide e-commerce retail market is growing four times faster than traditional brick-and-mortar retail, and Forrester Research projects cross-border e-commerce to continue to grow rapidlyover the next decade while domestic e-commerce growth in the U.S. and EU will slow.

Many small e-commerce players hesitate to enter international markets because of the hurdles of language and logistics, as well as the perception that cross-border transactions present a disproportionate risk of fraud. There's no doubt that there's a learning curve involved in selling into new markets, and there's the expense involved in localizing the store for different languages and providing local-language customer service. With careful research and wise partner choices — including shippers and fraud control resources — expansion into new markets offers growth opportunities that may not be available domestically. 

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