By Matthew Robertson, Co-CEO, NetDespatch.
“Britain is a nation of shopkeepers,” is the famous phrase coined by economist Adam Smith to explain the desire of a commercial nation to secure ever-expanding markets for its wares. And, despite disruption on the British High Street, among SMEs enthusiasm among retail shopkeepers remains strong, though its digital storefront may be doing better than its bricks-and-mortar counterparts. In 2018 retail, including online shops, accounted for 16% of the UK’s SME sector and was the third largest segment overall.
Certainly, barriers to entry have dropped significantly for budding retailers. It’s no longer necessary to have a physical store at all, if you can get your online presence right. Micro-businesses don’t even need their own website when a Facebook presence can get them in front of highly targeted audiences with just a few clicks. Added to which, simple ecommerce platforms have made it easier to set up and sell than ever before.
Nevertheless, retail is a challenging sector in which to build a business, especially given a fragmented market and intense competition. I believe there are a few tactics – from user experience to delivery – that can give smaller retailers an edge.
Small is beautiful – and personal
There’s an undeniable consumer trend to move away from the mass-market. We’re seeing it in the high street, as artisan coffee houses thrive on the same street as Starbucks, and the same can be true of retailers. Consumers are railing against mass-market dominance and looking for the bespoke products and genuine experience that a small retailer can deliver. The personal touch is paramount as consumers seek to build a relationship with brands they trust and that reflect their values. Individual service is what makes the difference and can help small retailers build and sustain a loyal tribe of customers.
Just because you’re small doesn’t mean you can’t innovate to offer a personal touch, either. Take eco-fashion company Rapanui. In the early days, every item shipped was accompanied with a hand-written thank you note. It became the company’s signature move – quite literally – but success brought with it the risk of repetitive strain injury for the company’s workers. Recognising the value in personalisation, the founders designed a font that looked exactly like handwriting in order to automate note production without losing the sense of personal service.
Making it mobile
Speaking of personal, mobile devices are the new panacea for retail. Estimates suggest that there’ll be around £25bn in sales via this channel in 2019, but I recently read that small retailers are struggling to adapt to basic m-commerce demands, such as ensuring their websites are responsive for display on mobiles. I think this underlines one of the challenges frequently facing small businesses: every one I’ve ever worked with has been desperate for more time to devote to staying up-to-date with market trends and demands, but has been caught up in the day-to-day operational side of things and has been forced to let more strategic activities slide. This can definitely be the case when it comes to delivery.
Delivery – dream or drama?
Whatever its size, any business that sells physical product must eventually come up against the challenges of despatch and delivery. This is where customers can’t help but make comparisons with bigger retailers. Like it or not, our expectations of delivery are shaped by what the big players offer and although we are prepared to compromise if we’re really engaged with a brand, small retailers need to be sharp when it comes to a strategy for getting their product to customers.
Also, in today’s “era of free delivery”, small retailers need to think carefully about the options they offer customers if they are to retain profit margins - the cost must be borne somewhere.
The good news for smaller companies is that consumers are not quite as hung-up on speed as you might believe. Research that we conducted found that 88% of respondents were generally happy to pay a little more for same day or one to two-day delivery and are prepared to wait longer for purchases they deem less urgent to arrive. Small retailers need to research their customer base, find out what their delivery preferences are and tailor their options accordingly – it’s a ruinous waste to offer same day delivery if your customers are more than happy to wait for next day or even longer.
The key is transparency. Offer clear delivery options at checkout and fulfil them to the letter. As CollectPlus CEO Neil Ashworth recently commented “It’s not about fast, it’s about precise delivery.” For a small business bidding to build trust with its customers, that couldn’t be truer.
Of course, small businesses need to make sure that their picking, addressing and despatching processes are as accurate and resource-effective as possible. Most small businesses start out with a very manual process that relies on physical data entry, transfer and labelling, but this very quickly becomes inefficient as volumes increase. Fortunately, in the same way other barriers to entry have fallen, so it’s now straightforward to automate label generation by integrating your ecommerce system with your chosen carrier – it’s what we do here at NetDespatch - thus ensuring that parcels can fly out the door.
When retailers first adopt NetDespatch the impact on efficiency is dramatic, saving huge amounts of time for staff. This can be diverted towards high value strategic activities that they haven’t previously had time for, such as adapting to the demands of m-commerce, as mentioned earlier.
There’s no doubt that our nation of shopkeepers is hard at work in challenging times. I believe there is a huge opportunity for small retailers to trade on their ability to personalise and provide individual service, as long as they can also free up time to innovate and keep up with the m-commerce market. By looking at automation at the right point in the growth cycle, small retailers can boost their potential to grow and thrive in today’s retail market.