How to Compete (and Win) Against Online Retailers

Executing these six expert strategies can help your small business gain a competitive edge.
Credit card in hands on computer
Small businesses can compete with larger online retailers by emphasizing superior customer service. (Photo: everything possible/ Shutterstock)

It’s no secret that competing with online retailers is one of the biggest challenges facing small business owners.

“A small business owner can’t compete on price with these large retailers who buy in massive quantities and bring huge scale to fulfillment and delivery,”
Sabrina Parsons said.

Parsons is CEO of Palo Alto Software, creator of the business management software, LivePlan. She leads Palo Alto Software in the development of software and tools specifically targeted to entrepreneurs and small business owners.

When you factor in convenience and the lower prices offered by online retailers, it seems like an uphill battle for your business to compete with them. Fortunately,
Parsons offered these six strategies to help your small business stand out from online retailers.

1. Offer superior service

Focus on delivering superior service to customers and create a positive, personal shopping experience.

“You probably can’t compete on price with and, but you can provide better service to your customers,” Parsons said.

2. Emphasize being local

If you are a small retailer, make “local” the focus of your print and online marketing and advertising strategies.

“People like to support local business owners – but customers must be reminded that you are one,” Parsons said.

3. Stock local products

Beyond being locally owned, try to sell or use as many local products as you can, which associates your business reputation as “home-­grown.”

“People are drawn to supporting products they know were made in their own backyard,” Parsons said.

4. Manage inventory

Always be strategic and proactive about your inventory. Make sure you can deliver immediately to the customer when they buy something at your store.

“If your products are frequently out of stock, you risk ruining relationships,” Parsons said. “Strategize and invest in enough inventory so customers know that you always have what they need.”

5. Market your authority

Position yourself as the authority of your business niche. When customers in your neighborhood need advice about a product or service you offer, they’ll contact or visit you first, rather than researching and buying online.

“You want customers coming into your store, even if they aren’t entirely sure what they need,” Parsons said.

6. Celebrate your community

Team up with other local businesses to host special community events and sidewalk sales.

And don’t underestimate the power of a team sponsorship. Support a school’s athletic program (or similar extracurricular activity) or sponsor a youth-­league team and earn brand exposure for your business at the same time.

And sponsorships don’t have to end with sports – you can sponsor other things, too, particularly in charitable applications. For example, you might be able to adopt a highway in your company’s name or hold a picnic for a returning veteran.

“Work hard to be noticed locally,” Parsons said. “Partner with other local brick-and-­mortar shops and offer events that mean something to your local community. Support local causes that tie into your brick-­and-­mortar to raise awareness about your shop and build affinity and loyalty within your community.”

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