With Black Friday almost upon us, things are getting tough for smaller retailers. Traditionally, the run-up to Christmas is a bonanza for sales, but ‘events’ like Black Friday, Singles’ Day and other ‘peaks’ are becoming something of a double-edged sword. On the one hand they do deliver more sales. On the other, they force massive and widespread discounting across the whole industry.
And often smaller retailers are hit hardest by this: large retailers and brands can, to some extent, absorb the discounting; the smaller players are effectively discounted out of the market at the most crucial time of year.
However, there are ways that smaller retailers can fight back. There are things that SMEs can do well that large retailers can’t – and these things are what these smaller Growth 2000 retailers need to focus on to grow.
One thing that smaller retailers are doing well is interacting with their customers. Research out this week from Uberall finds that smaller retailers and brands are very good at responding to reviews. In fact they do it way more often and way better than their bigger competitors.
Across six different industries – including food and beverage, retail, travel, and automotive – Uberall’s research reveals that SMBs have a higher average star rating than enterprises with more than 10 locations. And higher star ratings mean a higher conversion rate – with a star rating difference from 3.5 stars to 3.7 stars translating to a 120% difference in conversion growth from one year to the next.
This is why the UK’s ‘second tier’ of retailers are the ones to watch. These companies may face some difficult challenges – many the same as those facing the larger retailers too – but they are often more innovative, specialist and agile to come up with the tactics to off-set that.
This reinforces how the InternetRetailing Growth 2000 companies really are the challenger retailers that are at the vanguard of how ecommerce and omni-channel retail are reshaping the retail landscape.
In fact, the latest annual 2019 RetailX UK Growth 2000 report has been published this week and once again it showcases just how vibrant the UK ecommerce landscape is. According to Ian Jindal, editor-in-chief of InternetRetailing and RetailX, the arm of InternetRetailinbg that conducted the research: “The UK retail sector is characterised by the diversity of businesses. Some of these retailers, such as Balenciaga, Chanel and Timberland, represent the UK presence of leading international fashion and footwear brands.
Jindal continues: “Elsewhere in the Growth 2000 (G2K) there are specialist companies that bring a depth and expertise to what they do that often cannot be matched by larger retailers. The list also finds room for vibrant start-ups making the most of the digital revolution as well as those retailers that are growing out from regional bases.”
Jindal adds: “Some of these retailers will, in time, rank within the RXUK Top500. Those that, for example, sell to hobbyists may find their growth limited by the size of their markets. What unites both kinds of business is that, looking across the G2K, we find they offer examples of innovative practice that other retailers would do well to mimic.”
One example is the Vintage clothing industry. Rory Westbrook, founder and CEO of leading vintage clothing retailer True Vintage, sees an opportunity to push sales through the growing awareness of the environmental impact of fast fashion etail. He says: “Black Friday can provide some fantastic deals for consumers and it can be a great opportunity to save money but it can also encourage impulse buying of items which realistically, we could do without. Our advice would be if you do plan on buying this Black Friday, spend the same amount of time checking through what you already have and see if there are items that could benefit someone else either by donating them to charity or selling them on yourselves.
The vintage clothing sector can be a great place to do your Black Friday shopping as not only will there be some great deals available, but you’re also upcycling a better quality clothing item. So while you get a great piece at an even better price, you also reduce your environmental footprint in doing so.”
With Black Friday coming – and the IMRG warning that it may not deliver any growth at all to the UK ecommerce industry for the first year since it started – it will be interesting to see how UK retailers and etailers come out fighting to make Christmas the boom it needs to be.