MIS2101 Section 702 – Amy Lavin – Spring 2014

Shop Small or Shop Big?

 

 Online Shoppers are Rooting for the Little Guy

http://www.nytimes.com/2012/01/16/business/some-shoppers-rebel-against-giant-web-retailers.html?pagewanted=1&_r=1&ref=ecommerce&adxnnlx=1391803707-ErAWzPpO03O/bB7AJYZIPw

This article talks about the struggles small online shops have competing against big sites like amazon.com, the tactics they’ve adopted to compete against larger sites, and the consumers who are making a conscious effort to shop small even if it may cost them more money.

Online retailers such as Amazon and Zappos have developed a bully reputation among some because they push out the small “mom-and-pop” shops with their low prices, free and quick shipping and wide variety selections. These independent shops have had to get creative by offering exclusive brands or designs, and even some “freebies” included with purchase (positive incentives), and by preventing price comparisons (negative incentives). Amazon does offer small business the opportunity to sell on their website through their Marketplace program, thus giving businesses the opportunity to reach a larger customer base, but even so, independent businesses cannot compete price-wise.
1. Do you think websites such as Amazon.com or Zappos are bullies to small shops? Why or why not?
2. What would motivate you to shop from a small business (possibly paying a higher price) rather than a larger company online?
3. If you had an online business, what tactics or incentives would you use to compete with Amazon?

15 Responses to Shop Small or Shop Big?

  • I do think big website retailers use unfair tactics, but I don’t think they are purposefully trying to push out small businesses. It just so happens that their way of gaining a huge market share is by pushing everyone out. They end up being the bully because they have tons of financial abilities to market their company and products. If I have a good experience with a local shop I will shop there rather than a large online retailer. I love being able to shop at small family owned retailers, but it is often really hard to find all of the products you are looking for at small shops. It is extremely hard to not shop at huge online retailers, because they can market so much better while small businesses it is extremely had to find information about them. If I were to compete against a company such as Amazon I would make sure that I am providing products that are hard to find other places. And I would make sure that there is a special touch on each purchase to keep customers loyal.

  • I do not think that websites such as Amazon and Zappos are bullies to small shops; they are just successful, able to do business aggressively, and reach broader populations. They introduced ways to keep the consumer spending money with price cuts, promotions, product bundles, free overnight shipping and other attractive deals. It is unfortunate for small businesses, but business is business. Giant e-commerce has control over online retailing.

    A good motivator to shop from a small business with higher prices rather than a larger company online would have to be something that I need right away, possibly in 24 hours. It could be a book for class to a pair of shoes at the last minute for an event. It could also be a specialty item such as a diabetic shoe. An impression has to be made, and then they cut it out in order to get the proper fit. Big online retailers do not have that personal touch as small businesses.

    I really do not know if there is any tactic or incentive that I could use to compete with Amazon. I would just have to join Amazon’s marketplace program and take advantage of the opportunity to expand my customer base.

  • 1. Do you think websites such as Amazon.com or Zappos are bullies to small shops? Why or why not?
    I don’t necessarily think they are bullies. They started out as small companies themselves but they developed great business sense and ended up becoming these large corporations. If any small business made it big with a really good idea, I don’t think they’d be upset.
    2. What would motivate you to shop from a small business (possibly paying a higher price) rather than a larger company online?
    I would shop at a small business for specialty/uncommon items. For example, for christmas I bought a monogrammed bracelet from a small company on Ebay. It was the perfect personalized present that I didn’t see in any “super-store”. I do like things that are different and unique. I’m a big fan of mom & pop shops.
    3. If you had an online business, what tactics or incentives would you use to compete with Amazon?
    I would definitely have to get my name out there. Using social media seems to be key. I’ve seen many instances of a small store with a funny saying on their sign that grabs people’s attention and gets passed around on the internet.

  • 2. What would motivate you to shop from a small business (possibly paying a higher price) rather than a larger company online?

    I am willing to pay a higher price for good quality. I would recommend to the smaller Mom & Pop’s to advertise their high quality and show a picture of the item. I feel that there is a segment of the market that wants an item to last and to look good when displayed in your house. Mom & Pop should focus their marketing towards that target group and build brand equity as they grow their customer base.

  • 1. Do you think websites such as Amazon.com or Zappos are bullies to small shops? Why or why not?

    I don’t think they have intentions to bully or take away from small business but they strive to be the most utilized companies. They want to offer comparable products at low prices because in todays market a lot of consumer decisions are cost driven. Although I don’t believe it is intentional I do agree that these big businesses are pushing small business out of the market.

    2. What would motivate you to shop from a small business (possibly paying a higher price) rather than a larger company online?
    Unless it was a specialty product or a highly reviewed brand I honestly do not think I would choose the smaller business if I can get the same thing for cheaper. I am a young adult trying to save money for my future I tend to spend the least amount of money as possible unless I feel a product is very unique.

    
3. If you had an online business, what tactics or incentives would you use to compete with Amazon?
    I think it depends on the business and what you can afford. I thought the example in the article of the book store that includes candy or something small related to the book is a good idea. It is hard to give to many freebies if a company cant afford it. The only thing I would suggest is offering superior customer service. Some people value the one on one attention and time that goes into one on one interaction in a small business.

  • I believe that large companies are bullies to small companies and it is the main reason they are successful today. Companies like Amazon did not become one of the biggest retailers in the world by sharing customers and profits. They do not bully small companies out of the market jut because they can, they do it to get rid of any competition and gain market share.

    There are only two reasons I can think of that would make me consistently shop at a mom and pop shop. The first is they offer products that are hard to find anywhere else. The second is if I had a personal tie to a local shop. Other than these two aspects of business, major players like Amazon typically are much more efficient.

    If I had an online business I would have to specialize in a certain aspect of the market and advertise it through social media. The hardest part for up and coming businesses is breaking into the market. Specializing in only part of the market will differentiate my business from a company like Amazon and will allow my company to grow.

  • Nice article, Jenny. I think this should lead to an interesting discussion! Competition is fierce and it has to be very tricky for small stores to compete and get access to the market online – looking forward to hearing some of your ideas tonight!

    One other question – the article states: “I can’t tell you how often that happens in the store, where someone is asking my advice and then actually says out loud, ‘I wonder if I could find this on Amazon,’ ” she said. “I think that some people never really thought about the ethics.”

    Do you see any ethical issues in price comparison?

  • 1. Do you think websites such as Amazon.com or Zappos are bullies to small shops? Why or why not?

    How could you not think that these larger sites are like bullies? The article makes a good comparison to Wal-Mart coming in shutting down a little mom and pops shop. So I agree, but just to play a little devil’s advocate: What is stopping someone tech savvy from setting up a seemingly local e-commerce shop and playing the sympathy of those who support local business? I’m sure one can set up a little online store who gets orders from sympathetic customers, then goes on Amazon buys the item, then bumps up the price. This very thing happens every day on Stub Hub. Luke Bryan tickets for this Valentine’s Day were $35 when originally released. Now the cheapest seat is $72. That’s about a 210% profit margin. I’m positive many are just sitting on their couches making a living off of the mark-up. I’m sure the same can be done through Amazon.

    2. What would motivate you to shop from a small business (possibly paying a higher price) rather than a larger company online?

    Honestly, not much would motivate me, in my current situation, to pay a higher price other than having more money. Like most of the rest of us, I am just a broke college kid who tries to get goods at the reduced cost.

    3. If you had an online business, what tactics or incentives would you use to compete with Amazon?

    I would absolutely shoot for the sympathetic crowd. Other than that I would try and do as much free advertising as I can, like posters and business cards. Maybe even try to get certified by the big giants like Amazon.

  • 1. Do you think websites such as Amazon.com or Zappos are bullies to small shops? Why or why not?
    Yes, I think both Amazon.com and Zippos are bullies to small shops because, big online companies such as Amazon spend less money on handling and storing their products and they don’t have to open a retailer places and hire sales persons. As a result of that they can sale their product cheaply and still make a profit on the other hand small business have to open physical retailer place and pay expenses such as rentals and hire sales persons to take care of their products, so that in order to compensate the additional expense they have to sale their products for a higher price.
    2. What would motivate you to shop from a small business (possibly paying a higher price) rather than a larger company online?
    For me the main reasons for preferring shopping from small business are to avoid identity theft from buying online and being morally conscious to help the little guys.
    3. If you had an online business, what tactics or incentives would you use to compete with Amazon?
    I will probably use a specific and unique design packaging system to attract customers and add a little bit freebee or bonus to the specific product.

  • 1. Do you think websites such as Amazon.com or Zappos are bullies to small shops? Why or why not?

    I think Amazon and Zappos are bullies to small shops. The small businesses can’t compete with their pricing. It, ultimately, kills the small business. But, people choose to buy things from them rather than the small businesses. I think the quote in the article about the customer who asked if they could find the product on Amazon represented it perfectly. I don’t think anyone really cares about the small business anymore. People want the cheapest option they can get and they don’t really care about anything else. So, maybe it isn’t Amazon and Zappos but everyone who is buying what they have.

    2. What would motivate you to shop from a small business (possibly paying a higher price) rather than a larger company online?

    I work for a retail clerk union so what motivates me to buy from, not necessarily, small business but businesses that treat their employees right. They take care of them and do the right thing by them.

    3. If you had an online business, what tactics or incentives would you use to compete with Amazon?

    If I had an online business the tactics and incentives that I would use to compete with Amazon would be to offer little freebies with their purchases. I would also offer them EXCEPTIONAL customer service. Even though people are buying off the internet, if there is an issue, they want to talk to a person and I would offer that service. I think customer service would be the foundation of my business tactic against Amazon or Zappos.

  • 1. As a consumer I am going to shop where I can get the most for my money, not forsaking quality. Consequently, no I do not believe that click-only business or click & mortar businesses should be classified as bullies. However, there are many items that I would not buy from the Internet and only purchase from local stores. For instance, I do not purchase food on the Internet, or any produce or meat that has been imported from the market.

    2. I do support small business for specific items. I only purchase locally grown produce, e.g., Jersey tomatoes, and I purchase all my meat/poultry from the local butcher. The price is higher, but it is quality meat. Sure I could go to B.J.s to buy in bulk and pay less, but I don’t know if the meat in imported or the quality of the meat, which is two important factors for me when buying meat and produce.

    3. I would not try to compete with Amazon. They have virtually cornered the market as a click only business. If I were to have a business, my best business plan would be to establish a click & mortar business. This is the only way I visualize competing with Amazon.

  • Absolutely is the internet pushing small business America into the red. Small business in America can not compete with companies such as Amazon. It is almost ridiculous that we are now ordering toilet paper online. What ever happened to going to the local market and purchasing what you need for the week. Answer is that sometimes people or to dependent on ordering offline and not shopping their local market for the best deal.

    I don’t know if I would pay a higher price for everything that I buy online, but the essentials that I need at the moment I would definitely go to the store and buy. Who would want to wait to receive say diapers or toilet paper.

    My online business could not compete with Amazon…The company is in the likes of Microsoft…There is no competition.

  • 1. I don’t think that Amazon or Zappos are bullies. It’s a dog-eat-dog world. They are doing a better job developing their strategies. The smaller companies that use the click-only business strategy have to be more creative in becoming more successful.
    2. I think security would lead me to buy from a smaller e-store as long as the difference in price is not much different. Also those that offer perks like free shipping is a plus.
    3. I not sure I am prepared to compete with Amazon. The first thing I would do is hire the best marketing firm in the country. The Amazons and the like are monsters in the ecommerce industry and it would take a lot to measure up to their success.

  • 1. I don’t think it’s bully small business. It has a lot of reasons to attract the consumers
    2. The reason makes me to shop with small business is specialize or customize products
    3. If i has a small business, to compete with Amazon, i need to put my business name and product in the market. My product must be different and in needed. More, my product price must be more competitive.

  • 1. Do you think websites such as Amazon.com or Zappos are bullies to small shops? Why or why not?
    Assessing whether or not these large e-commerce companies are bullies is tough. Amazon and Zappos are acting like their “big box brethren” but there will always be a struggle between large retailers and small retailers because large retailers will generally always be able to offer lower prices. Deciding whether or not to pay the higher prices at small shops is a personal decision. It comes downs to what you value and also what you can afford.
    I do think it’s unfair though that a small shop could mistakenly branded as expensive because it does not offer prices below wholesale, like the owner of the baby store Giggle worried about.

    2. What would motivate you to shop from a small business (possibly paying a higher price) rather than a larger company online?
    My motivation to shop at a small business and possibly pay a higher price comes from the fact that if too many small businesses go out of business, the big companies will be able to raise their prices. I do not want to create a situation where small business owners lose their livelihood because of higher prices only to eventually pay those higher prices to the big companies.

    3. If you had an online business, what tactics or incentives would you use to compete with Amazon?

    If I had an online business I would carry products that Amazon does not. Just as there are consumers that appreciate the small business, I imagine there are producers that also appreciate the small business and want their products to be sold in that setting. I really like the idea that Powell’s bookstore uses in which it chooses a new book and extra item for customers. In other words, personalization is something that large e-commerce companies are unable to offer.

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