It doesn't matter if you are a neighborhood grocery store, restaurant or a cafe, if you are a small local business, you are losing your customers to big brands. There was a time when customers didn't know better than the corner shop around their house. They would walk to the shop/cafe, greet the owner, shop for stuff/buy a cup of coffee, pay in cash at the billing counter and leave. Fast forward to today, the world is digital. Customers are turning to online platforms for every need – to order a meal, shop for clothes, or grocery and have it delivered to their doorstep.
With an estimated current market size of $38 billion, e-commerce in India is expected to grow to about $120 billion by 2020.
Big brands with deep pockets have leveraged on this digital wave and are even driving it, to increase their market share logarithmically But all that is at a large cost, to the smaller businesses. With the trend of consumers going mobile, small businesses are compelled to go digital. Many start with simple information websites, but still inadequate, increasingly turn to big brand e-commerce platforms. These platforms provide them with an instant online presence and an unprecedented exposure to an explosively big consumer base. That brings them a new stream of business of course.
A platform that helps me to grow my business That’s great! But am I losing my customers to them?
The answer is a yes. Especially if you are a small local neighbourhood merchant/service catering to a local consumer base. If you think about it, most consumers have certain habits and follow a set routine on a daily basis. The daily or weekly grocery stop, the takeaways or restaurants they call for home delivery, the dental clinic the family visits every few months etc are all pretty much fixed. If you are one of those neighborhood merchant/service in that scenario then it is you who are being relegated in their priority of things, when you go online. Or if you do not go online. Ironic, is it not? Let’s break it down and see. You do not go online – you lose customers to your competitor who is online. You go online by listing yourself on an aggregator platform – you lose your customers to the big brand. Customers will slowly but surely migrate their loyalty from you to these platforms. You list your brand, amongst your competitor brands in the same space, only to get a fraction of the business from the aggregator. While some business does bring in new customers during the short run, it does not help your business in the long run. Because aggregators are hardly a dormant yellow page, they are dynamic platforms using cutting edge algorithms to churn customer information. They use that immense insight to interact with the customers directly, presenting them with a wide variety of choice on a regular basis, tuned finely to each customer’s subliminal craving. You as a merchant is irrelevant in that scheme of things. The certain eventuality, of course, is that the customer loyalty shifts from you to the big brand. Your customers are stolen from right under your nose and you have no clue!
What can you do?
Well, the writing on the wall is clear – ‘stand on your own in the digital space’. Having your own website or mobile application is the straight forward answer. You are seen where your customers are. You are providing an opportunity to directly interact with you. You are creating a sense of personalization and building your customers loyalty. But then, what is stopping small businesses from having their own digital presence? The cost of development of a website (which is passe) or mobile application perhaps. It just doesn't end with building an app which is costly enough, but maintaining it, regular upgrades, bug fixing and more – all of which, a small company doesn't have the time and resources to dedicate for. Couple all of that with the fact that customers abhor downloading apps for every single need.
The Average App Loses More Than 75% Of Its Users After One Day
Digital Economy May 20th, 2016
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