June 9, 2015

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Going Local

How Utah Businesses Compete Against E-Commerce Giants

By Heather Beers

June 9, 2015

Think about the last time you bought a gift. Where was it from? Was it Amazon, zulily or Overstock, or was it a local boutique?  Is it convenience that drives your purchasing decisions or do you look for local expertise? Brand awareness or one-of-a-kind appeal?

With e-commerce giants like Amazon, which woos enough consumers to capture 23 percent of the online retail market share, millions of shoppers clearly choose convenience. So what does that mean for local Utah businesses? How can smaller companies square off against their Goliath in the battle for your dollars? Turns out they have quite a few stones to drop in that sling.

Building Relationships

You’ve seen those emails—the ones you get not long after a purchase on one of the big e-commerce retailers—that recommend, “If you liked that, you’ll also like this.” Armed with sophisticated algorithms, those suggestions are usually pretty spot on. But Anne Holman, co-owner of The King’s English Bookshop in the 15th and 15th neighborhood of Salt Lake City, says customers are drawn to the human perspective as well. She says customers will walk in and “ask for Margaret, saying ‘She’s my Google.’” Holman adds, “There’s no substituting people. If you’ve been a customer for a long time, we know what you like, what your kids like. It’s not really an algorithm, you just know them.”

That individual relationship with customers can be one of the most powerful keys to success, according to Kristen Lavelett, executive director of Local First Utah. “It’s all about customer service, customer service, customer service. There are times the convenience of buying things online may win. But there are certain items, certain times where you need somebody who has the passion and expertise of the locally owned business. They care about the product they’re making or selling, what they’re providing you with,” she says.

Rod Works, a décor retailer based in South Jordan with stores throughout Utah, Arizona and California, also emphasizes the value of one-on-one relationships with customers. “We try to make it a fun atmosphere,” says Aaron Brackett, operations director. “We’re not there just to warehouse and sell things as fast we can; our objective is to build relationships with customers and maintain those as long as we can.”

Spinning the World Wide Web

Online sales aren’t just for the big guys. Local Utah companies—from brick-and-mortar shops to locally based online retailers—continue to grow more sophisticated with their online retail space, and it’s paying off.

The King’s English Bookshop, for example, has fared well with its online bookstore for years, and it’s expanding services all the time. Holman says, “We’ve added e-book sales via Kobo, a competitor of Amazon’s. That’s been a great way for us to make in-roads into that market. I think it’s happening with indies [independent bookstores] all over. We’re also figuring out ways to buy and sell textbooks, and we’ll be able to sell audio books soon. We’re getting better and better at online sales.”

While Rod Works’ customers tend to come in for the in-store experience, its online market continues to grow. “We’ve got tons of customers who have been with us for years who have moved away. They still want our products, so they love being able to shop online,” says Brackett.

Utah-based online shopping sites are expanding online reach and convenience for smaller boutiques, artisans and retailers, as well. Jane.com, based in Lehi, is a daily deals boutique marketplace that represents both online and brick-and-mortar boutiques, primarily offering women and children’s clothing and accessories and home décor. JD Stice, COO of Jane.com, explains, “Every night at midnight we launch new deals that last 72 hours. We’re currently launching around 170 to 180 deals a day. So with a 72-hour life span, there are 500-plus deals at any given time. The model creates urgency, scarcity.”

The model is clearly working. The company was founded in 2011 and has doubled year over year ever since. Stice says Jane.com’s customers love the unique products (many are handmade items or limited lines) and daily deals.

Stice says Jane.com succeeds because they consider themselves a technology company first and foremost. “In competing, it’s all about technology,” he says. “This year we’re doubling our technology development team. We design mobile first because almost 70 percent of our traffic is mobile web and native mobile apps. Everyone lives and shops on their phones, in contrast to two years ago, when we would design desktop first.”

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