How long until the retail big boys wake up and crush the little guys?
Friday, September 28, 2012/
How long do the niche online players in Australia have before the big boys wake up and crush them?
I’m thinking of launching an online retail site but it seems like there will only be a short time before the bigger players in my market move online.
Never in history has it been easier for David to smash Goliath in the face and walk all over him. The internet and technology has levelled the playing field and removed many barriers to entry so if you are afraid of the big boys, then perhaps business is not for you!
Instead of fearing the much-belated entry of the big retailers into the eCommerce arena, you should be grateful they are there. At Milan Direct we certainly welcome their arrival for quite a few reasons.
Firstly, as more and more of the larger Australian retailers set up online stores, this creates more awareness in the mass market of the great savings and convenience that can be had by shopping online and so grows the online marketplace.
The larger retailers such as Harvey Norman, Myer and David Jones have million dollar advertising budgets, which the niche online retailers can leverage off.
The second key reason why we welcome their arrival is that the ‘big boys’ will never be able to compete with the niche online retailers like Milan Direct head to head and on factors such as price, convenience and customer service.
The reason being is that the larger retailers are stuck with archaic business models and are all heavily invested in retail space and showrooms.
They have so many extra costs that will have to be absorbed into their pricing and guess who pays for that? Their customers!
By running a pure play online retail model like we do at Milan Direct, nobody can compete with us on price as we have eliminated all unnecessary costs in the supply chain and deliver the product direct from the factory floor to our customers.
Online shoppers today are smart, savvy and have learnt to shop around. Shopping comparison sites give the power back to the consumer who can quickly scan the market for the best price, product offering and online shopping experience.
Any educated consumer would never purchase from one of the ‘big boys’ when they can have far greater savings by shopping at a niche online store.
A lot of the larger retailers also simply do not get online either. It is not as simple as setting up an online store.
In today’s online world, customer service is of vital importance as every customer has the power to leave product reviews and their honest feedback if not given fantastic service.
So customer service speed and accuracy is vital and so far the larger retailers have yet proved to handle this part of their online operations well.
So in regards to sitting there “thinking” about launching an online retail store, I would encourage you to take heed of what the famous American pastor and author Robert H. Schuller once said, “I’d rather attempt to do something great and fail than to attempt to do nothing and succeed.”
From the frontlines
Alan Jones: How to raise investment for a startup with no customers and no revenue Alan Jones M8 Ventures partner
Canva's Melanie Perkins has 10 tips for startups with 'crazy-big dreams' Melanie Perkins Canva co-founder
Why Up's transgender controversy shows there can be no separation between founders and their companies Joan Westenberg StartupSmart columnist
Take a stand: Why being neutral hurts profitability and engagement Steven Maarbani VentureCrowd executive director
The power of passion: Naked Wines' co-founder reflects on what made the startup successful Peta Jecks Naked Wines co-founder
Hipsters, hustlers and hackers: Three instances of everyday bias in startupland Theresa Lim Play2Lead founder
Diversity and coaching will rid the banking sector of its toxic culture problem Hema Kangeson inSpur founder
Why you should find the right role for the right person — not the other way around Bruce Stronge Outfit founder