The opinions expressed by Entrepreneur authors are their own.
For online retailers, the surge in sales during the pandemic is officially history.
Direct-to-consumer (DTC) brands include: filing for bankruptcy. These are luxury retailers that have raced online, corresponding to Louis Vuitton and Chanel licking their wounds. Globally, digital retail’s share of total sales has flattened at around 20%. If you are a big brand, the outlook can look pretty bleak unless you begin pondering small. Online brands that survive and thrive are increasingly breaking away from the playbook of much smaller retailers – especially when it comes to technology.
As the founding father of an agency helping brands with their e-commerce strategy, I’ve seen smaller players driven by the need to move quickly and do more with less. This means adopting latest and cost-effective technologies before larger competitors. Resourceful and creative small and medium-sized retail businesses (SMBs) also work closely with their customers online. And unlike large corporations, they do not have internal silos blocking their digital progress.
All of those strengths offer worthwhile lessons for large and growing retailers. Here’s what they can learn from smaller brands when it comes to leveraging retail technology.
When it comes to your e-commerce platform, think about speed and convenience
Because they need to move quickly, small retailers typically select an e-commerce platform that is robust, agile, and easy to adapt. The faster they can get the site up and running and the less technical knowledge needed to maintain it, the higher.
Legacy enterprise platforms—costly, clunky, and difficult to adapt—have long been the alternative of big brands. In the past, these were the only tools that would reliably handle a large retailer’s sales volume and SKU numbers. But this example has modified.
When clothing retailer Banana Republic launched its furniture and home décor division late last 12 months, went with the e-commerce platform originally known for serving small creators and entrepreneurs, Shopify.
Why? At this point, every current platform has a lot of bells and whistles. What really matters is not individual features, but usability and flexibility. Does the platform have low barriers to launching a retail store? Does it have a robust application ecosystem integrated with services? (The vendor on this front is Shopify, which has a marketplace of around 3,000 apps). When it comes time to customize your site, are there loads of agencies and technology partners on the platform that can enable you to with the task?
Think about selecting a platform like buying a automotive. You want something reliable, secure and easy to service – even if you do not know exactly how every little thing works under the hood.
Outsource technology setup and customization
Unlike many other large retailers, Banana Republic also knew higher than to build its own online platform. Large brands often fall into this trap, employing huge teams of engineers to keep e-commerce running in-house.
News flash: Retailers are not technology corporations. They wouldn’t rely on their in-house legal counsel for sensitive legal matters. So what is the difference between retail technology, i.e. the point of direct contact with customers?
Small and medium-sized retail corporations are big fans of completely latest technologies, including: two-thirds say they are open to it. But startups know that the biggest value comes from time spent on strategy, not delving into its implementation. Therefore, it is often higher to outsource the technical configuration to an e-commerce agency.
Since such corporations typically deal in many different businesses, they have no shortage of suggestions and tricks to offer customers. They can also select the right platform, find the smart people the brand needs to compete online, and play a key role in customizing the site.
Invest in direct contact with customers
Smaller online retailers also understand the power of using technology to connect directly with customers. After all, that was the original promise of DTC commerce. Instead of sending customers to a big box store or other intermediary, you can cultivate a direct, personal relationship, providing higher service and building lifelong loyalty in the process.
To take full advantage of this chance, small retailers have long used tools that facilitate conversational commerce, i.e. digital one-on-one conversations with consumers. Back in 2016, online clothing retailer Spring created its own live news and personal shopping service.
Today this trend continues. Because video, generative artificial intelligence and other newer technologies to connect with shoppers are inexpensive and available, smaller retailers have also been early adopters. For example, energy drink startup EBoost uses customer data to create “digital twins” of customers, then uses generative AI to talk to them and gain insights into future buyer behavior.
Small brands also excel at personalizing the customer experience and leveraging technology to take it to the next level. This can take the type of anything virtual meetings with in-store salespeople for full customization product recommendations based on customer history and preferences.
In addition to reducing customer acquisition costs by as much as 50%Personalization can increase revenue by 5-15% and marketing ROI by 10-30%. Seven out of 10 consumers expect corporations to offer personalized interactions, and three quarters feel frustrated when they fail to do so.
Large brands are increasingly using this manual. By Nike by your sidefor example, buyers can create custom shoes by using the 3D model to select colours and materials, in addition to their own ID.
Tear down the partitions that hinder your sales strategy
In addition to knowing their customers, small retailers have a clear, detailed picture of their e-commerce business itself – one other strength that larger players should strive to emulate.
This is because their IT, customer support, merchandising and other departments are necessarily in constant contact. So it’s easier to see that the higher cost of driving traffic to your website is hurting your sales margins, for example, or that long shipping times are driving customers away. Smaller retailers can jump into these problems and fix them.
Big brands? Not so much. All of those business functions are typically siled, creating roadblocks that hinder growth. Just in a recent study by customer relationship management company Zendesk about one in five business leaders said their teams were good at sharing data.
Choosing the right tools can even be helpful here. Look for an e-commerce platform that collects all the most significant metrics – sales, conversion rate, guest sessions – in one place. It must also enable retailers to easily view and visualize this data and then easily share it across the company.
For retail brands, technology is ultimately a means to an end: connecting with and serving customers. In a difficult market, making smart technology selections can go a good distance in closing this gap.