Marketplaces 2010: Local Retailers and the New Marketplaces
Serving mom-and-pop small businesses is a challenge in digital marketplaces. They want to be online, but they don’t know where as there are no huge, recognizable brands. It’s a challenge for them to know whom to work with in the absence of a “Google-like” brand in the local space. ShopCity.com‘s president, Colin Pape, addressed these challenges by offering his prescription for success, which includes these elements:
- Flat-rate pricing works; small businesses want the certainty.
- “Reciprocal sales” — spend time and money with businesses, then sell to them.
- Show that you have an affinity for small businesses.
- Municipal governments are good partners.
- Chambers of commerce can be a friend sometimes, a competitor other times.
For more information and perspective on ShopCity.com see our earlier post featuring an interview with Pape.
One of the ways to tackle the issue of where local businesses can go online is to leverage relationships with trusted local brands such as media properties. David Vazdauskas, president of Local Thunder, likes to work with media properties as they complement his ability to provide integration and an online platform for local businesses. Media companies bring the big local brand, share a mandate to increase revenues, and already have existing advertiser relationships, feet on street, and promotional power. Newspapers in particular are happy to hear of Local Thunder’s video offerings as it is not their strength but adds clear value. Vazdauskas says his company works with WorldNow on an exclusive basis with television stations.
Ben Saren, CEO of CitySquares, says he’s never had a small business ask “how do I get more traffic to my site?” They’re more interested in making the cash register ring. Saren concluded, “they really don’t even care about ROI — they don’t know what it is. They just want to drive business.” That’s the kind of mentality small businesses have so it’s a bit strange trying to work with them with digital markets. Saren says they request a lot of hand-holding and that is a big constraint on the ability to scale.