How Small Players Can Win Big Online

Size matters a lot in the world of brick-and-mortar commerce, where the biggest retailers make the largest impact in marketing and pricing. But online commerce in many ways is a great equalizer, and experts say small players can stay in the game -- and score some niche victories -- by using the same tools and strategies available to entrenched combatants.

Experts told the E-Commerce Times that when it comes to establishing a Web presence, the key for small businesses is smarts, not riches. To start with, a merchant must be sure that the site is being noticed.

Gene Alvarez, senior program director for e-business strategies at Meta Group, said a small merchant's site must be tagged and registered properly, so that it shows up on premier search engines and other sites that could draw customers.

Preventing Search No-Shows

"You need some kind of IT capability to create a smart Web site," Alvarez told the E-Commerce Times. "The challenge is that you either need to learn how to do it yourself or find a boutique design shop that can do it for you."

Alvarez said that even the most impressively designed site will do no good if it does not show up prominently on the Web's top search engines.

"Being able to show up on the first page of search results is significantly important," he noted.

When it comes to infrastructure, Alvarez said owners should look into services offered by shipping providers like UPS and FedEx, as well as online portals offering commerce and Web hosting functions priced for small businesses.

Niche Nimbleness

Once the site is built, the small player still must stand out from the crowd. One way to accomplish this is by establishing uniqueness.

"A key factor for the small guys is to focus on a niche product area or a niche geography," said Andrew Bartels, e-business analyst at Giga Information Group.

For example, Bartels told the E-Commerce Times, the Web site of a Boston-based bookstore could emphasize same-day delivery of books to customers in the Boston area, or the fact that the store has a larger selection of books about Boston than do larger competitors like Amazon.

"Make sure you have a very focused market that you can serve better than the big guys," Bartels said.

Catering Pays

Forrester Research analyst Kate Delhagen said such a focused approach has brought quiet but solid online success for many small businesses. Just knowing a community well or effectively catering to a narrow interest group not served by major companies can pay dividends.

Delhagen pointed to sites like MadeInOregon.com, a regional business that sells nothing but products made in Oregon. There is also MotorcycleSidecars.com, which has exactly what its title indicates -- products and information on everything related to motorcycle sidecars.

Because sites like these cater to distinct niches, they benefit from word-of-mouth. They also are more likely to be found by search engines because they are so specialized.

"Our research shows that the more specific a product is, the more likely that someone will use a search engine to find it," Delhagen told the E-Commerce Times.

Marketing Off-Site

Marketing a site via offline channels is also crucial for small players. Bartels cited the experience of a Web site operator who sold ocarinas -- mouth-played musical instruments -- by taking out ads that included the site's URL in print publications geared toward amateur and professional musicians.

Experts noted that many high-tech tools for luring new business are just as cost-effective and efficient for little guys as they are for major players.

For example, GartnerG2 vice president Van Baker told the E-Commerce Times that opt-in e-mail programs have been found to be effective in helping small businesses bring targeted, interested customers to their sites.

Once those visitors have arrived, technology -- if used properly -- can offer personalized service, track orders, handle returns and perform other essential tasks. Like big companies, smaller ones live or die on their customer service.

"It really boils down to the total experience on your site," Baker said.

The Follow-Up Factor

Giga's Bartels said that mom-and-pop sites, if they do not try to spread themselves too thin, can leverage personalized service to their advantage. Follow-up is key -- making sure customers got what they wanted in a timely manner and resolving any issues that might prevent return visits to the site.

"Building a loyal customer base is a critical factor because a lot of your sales will be repeat sales," Bartels said.

Last but not least, Forrester's Delhagen said small players must know how to pick their online battles. In some cases, it is futile to try to stake a claim on products that are already being sold profitably and in large quantities by a major competitor.

"You don't want to take on Wal-Mart head-on," Delhagen said. "You need to do what you can to differentiate yourself and sell based on your uniqueness."