How small businesses are dealing with online giants
Small businesses in the UK face a number of immediate challenges, including a long slowdown in consumer spending.
But they also face a struggle with big online competitors such as Amazon.
On Small Business Saturday, we take a look at what some businesses are doing to up their e-commerce game.
“I do think there’s a great opportunity for small business,” says Northern Irish shop owner Jonathan McCann. “We are punching above our weight.”
He started his business, Jonzara, in 2008 with sister Sarah and mum Heather in Newtownards. They sell women’s clothing, and cater for the “older lady”, he says.
The family has worked hard to build up the business, but Mr McCann says that competition from online retailers is “a major concern”.
“People obviously want the cheapest price, and Amazon works on price,” he says. “It’s a concern for everybody.”
Earlier this year there was US press speculation that the giant could face anti-competition scrutiny under the Trump administration.
Amazon is trying to disrupt various markets, including fashion, but the world’s biggest e-commerce site doesn’t tick all of the boxes, says Mr McCann.
One of the main differences is their personalised customer service, he says.
His “small team of girls” on the shop floor makes big efforts to get to know their customers, and to offer them clothing that harmonises. “We’re offering a personal service. Amazon can’t do that.”
The online giant is “not as attractive” for his demographic, he adds. It has dresses aimed at 16-year-olds alongside other merchandise and “they don’t sit together”.
Jack be nimble
Mr McCann says that a quick turnaround of stock means they have clothing lines in small numbers ahead of many competitors, keeping the shop looking “fresh”.
Jonzara also runs customer events such as fashion nights and is building its own e-commerce business. “Online has really grown for us”, he says.
Its online success led to it opening a store in Lisburn, in part so it could manage stock more effectively.
Most of its online customers are from outside Northern Ireland – mainly English, but also from Germany and the Netherlands.
“We’re looking at how we can grow that quite aggressively,” he says.
Jonzara is part of the campaign group Small Business Saturday.
Helen Harris, who co-owns York shop Owl and Monkey with her husband Matt, says when it comes to Amazon: “You’ve got to offer something different – you can’t compete on price”.
Their shop sells products that they think are practical but beautiful.
For example, they sell a type of twine that has been made in the UK since the 1800s. They say it’s important for their customers that they know that some of the products are made by “a brilliant man called Ted” in Cumbria.
“Anything day-to-day that makes the day feel that much more special.”
They live on the same street as their shop, and says they try to give back to the community – hosting events for local artists.
“It’s an important space for other people in the community to come and display [art and products]”, she says.
They started online in 2009, but wanted “a storybook shop” – something that “feels like a lovely continental shop where everything is beautifully presented to you”.
“Online you are a very small voice in a very large pond, and it’s difficult to get heard.”
The shop uses social media to connect with customers, “first and foremost it’s service” says Mrs Harris.
The north east of England has the lowest concentration of small businesses in the UK, and some of the highest unemployment rates.
Mrs Harris thinks that independent shops have a big part to play in regenerating an area.
Katie Cullen and her partner Steven, who run the Block and Bottle in Gateshead, also think small businesses can boost the local economy.
Their shop is a mixture of a butchers and a craft beer store.
They try to source all of their meat products locally to try to support the area. They sell fresh meat, but also charcuterie, which is proving very popular.
“It’s tricky because it’s so popular. It takes four weeks to make and it’s gone in four hours.”
They have an online shop just for click and collect and also have a social media presence. They use Instagram and Twitter as an extension of their shop front, and Facebook to organise events.
“It’s great being able to put out what we want, when we want to – you couldn’t do that with paid ads in a magazine,” says Ms Cullen.
They open late and on a Sunday, which “isn’t so normal up North,” she says.
Small businesses can sell through Amazon, but Ms Cullen would rather support independent firms.
“Amazon is taking a lot of business off other people,” she says.
One business not involved in the promotional campaign, Wined Up Here in Norbiton, south west London, says that online is becoming an increasingly necessary part of the business.
Charlotte Dean, who sells high-end wine and cheese, says running a website is now an expensive necessity. “Price is an issue because everyone runs on such small margins,” she says.
Yet businessman Wilfred Emmanuel-Jones, who set up the “Black Farmer” food range, says that Amazon can be used by small firms as a way to take on big business.
“Producers can come back to there to sell their wares. Amazon is there to facilitate other producers.”
He says that in his line of work, “big retailers… big supermarkets, have a stranglehold on the food chain, and it’s not right.”
“Technology will strip that out and allow the smaller guys to compete,” he adds.
The head of Amazon Marketplace in the UK, Katie McQuaid, says that tens of thousands of UK small businesses use Amazon as a platform, helping to support 74,000 jobs.
“We are pleased to support SMEs in their efforts to export their products abroad on a European or global basis, opening themselves up to tens of millions of additional potential customers.”
More than 60% of the UK businesses on Amazon export abroad – with sales of more than £1.8bn in 2016.
Amazon Marketplace is also involved in Small Business Saturday.
With a slowing UK economy, small businesses are more important than ever.
And despite thinking Amazon is “fantastic”, Mr Emmanuel-Jones sounds this warning.
All big retailers need “rules and regulations place so you don’t have the power to beat people”.