What’s the difference between Amazon.com and Walmart? As days pass, less and less. Amazon and other large online retailers are acting more and more like their equivalents in physical retail. This is bad news for small online businesses, in much the same way Walmart had demolished small business competition.
The holidays showed a 19% increase in holiday spending for big online retailers, while small retailers only went up 7%. So what’s a small business to do? Some of them block price comparisons. Others offer free deals and loyalty benefits. Still others exploit the mom and pop feeling, saying it’s morally superior to shop small.
Some small retailers online find themselves relying on almost emotional connections with their customers. Many Americans, it seems, tend to grow suspicious of big businesses and equate their size with a monopoly. They shop at small businesses to stick it to them, even when the prices are higher.
Amazon drew criticism this past holiday by offering, among other deals, a price-scanning app. It would compare a price of something physical with something in their stock, and offer 5% off if bought on Amazon.com. This was seen by many as an attack on physical retailers.
Other tactics to compete with Amazon include custom names for their products, exclusive loyalty deals, and refusing to carry anything that isn’t unique.
Read more at The New York Times.
