If you haven’t heard, or maybe you don’t want to hear, Amazon recently purchased Whole Foods for a hefty $13.7 billion. What does that mean for small businesses, or does it mean anything at all? Giant retailers have been moving in on small businesses for some time, but Amazon isn’t just a large retailer, they are a large online retailer. What originally began as another online bookstore swiftly moved into other ventures (think electronics, clothing, and much more).
Now that Amazon has entered the grocery industry, professional economists are expecting a hard hit to major grocery retailers and small business grocery or food manufacturing establishments alike. Amazon runs a smooth and efficient online business that allows customers to get the value, convenience, and easy comparison shopping all at their fingertips and in a matter of minutes. The days of stopping into a grocery store are becoming scarce.
So, what does this mean for small businesses? It could mean a number of things, but the main components to consider are Amazon’s reach and its data gathering abilities. With access to just about every neighborhood in the country as the largest e-commerce player in the world, Amazon could be where your customers decide to start buying their groceries online. Not only will your potential customers be able to start ordering groceries online, but Amazon also collects the data of customer buying habits so they can tailor the shopping experience for each customer. The customer doesn’t have to have a lengthy in-store discussion about their needs to have a personal shopping experience. All they have to do is continue searching the web or Amazon for what they need and Amazon will make recommendations based on previous search criteria and regular internet activity.
As a small business owner, what have you done to keep up with a world that’s going digital? Online shopping is leading the way, and access to an online storefront is becoming a necessity for most consumers (43% of consumers are more likely to shop online according to Inc.com). Although many retailers see great gains during the holidays, online retailers with functioning e-commerce platforms saw the most traffic and the highest revenue. Customers were able to buy quickly, compare products, and ship them right to their front door without grabbing their car keys (just like Amazon).
So what does Amazon’s acquisition of Whole Foods mean for your business? It means it’s time to step up in a big way. Most small business owners only spend between 2-5% on marketing which may seem like a good idea for now, but realistically it’s costing you more. Retailers like Amazon aren’t going to wait for small business owners to decide they are ready to change with the times, rather they will force you to. As long as they are pushing your bottom line, here are a few things to consider:
- No website means your customers are left searching the internet for someone, anyone else. You may get word of mouth referrals, but do they always know your phone number, business hours, services/products you offer, or what you charge? Also, does that word of mouth referral allow the customer to simply click the “Call Now” on their cell phone?
- Amazon will have ads following online consumers and driving traffic to their online storefront. Are you driving traffic to your website so your customers can visit your store? If not, why? If Amazon is picking on grocery stores it means anything is up for grabs. Who knows, they could start providing services next. Oh wait, they’ve already begun, TV show/movie streaming anyone? Or maybe you need auto part suggestions/tips/advice? No worries Amazon’s got it covered.
- Not only is Amazon buying up grocery stores, they are a major player on social media. They engage with their customers on everything from products/services to new specials and discounts, holidays, and cultural happenings (think National Donut Day and Guardian of the Galaxy 2 movie launch).
“They’re a giant retailer, we can’t match them.” No, you can’t, but you can provide an exemplary customer experience to keep you and your business top of mind with consumers. A website that’s easy to navigate and find in a search, targeted ads that drive traffic back to your website, and regular, engaging activity on social media will help you become a convenient place to shop for products/services. Amazon’s acquisition doesn’t have to be the end of the line for small businesses, just a call to action to give it their best. Amazon has opened the door. What’s your next move?