Is your small business struggling to compete with larger, more established storefronts? One of our most successful merchants shares his tactics for small businesses to sell big.
Online retailing allows small and medium sized businesses to reach audiences who were previously unreachable. However, small and medium businesses tend to lack the same name recognition and advertising budget needed to compete with larger businesses. The key question a business in this position must ask is, "How do we, as business owners, differentiate ourselves from larger businesses?" The answer is that we need to optimize our strengths in order to market our goods and conquer part of the market share. In this article I will share some pointers garnered from our own experience as a small to medium size jewellery seller and how we at CaratsDirect2U were able to compete successfully in the modern marketplace.
Visual appeal: Always try to use actual photos of your items. The advantage that the customer experiences by shopping in a brick and mortar store is that he or she can actually see, touch and try on the item. As online sellers, we found that the best way to showcase our items is by using actual high quality photos of our items as well as an actual video of our diamond jewellery. Our experience has shown us that our customers are more likely to purchase an item after they are shown an actual photo as well as a video of the item.
With today's modern technology it is easy to take professional photos of any piece of jewellery or diamond that we have. All that is needed is the standard diamond tweezers and a high quality smartphone. We use our iPhone 4 and rotate the tweezers with the inserted diamond and in just a few minutes we can provide our customer with a great video of the actual diamond.
One recent experience we had exemplifies how a video can make a sale. We were approached by one of our online customers who was interested in purchasing a treated 2.00 CT SI1 Blue Diamond. The customer originally shopped for this particular item at the website of one of the big online retailers. However, the customer wasn't able to see an actual picture of the item. Since the customer had the funds and was interested in purchasing the diamond and asked if he could actually see the diamond, we took a video of the diamond from several angles with an iPhone, we emailed the video to him, and within twenty four hours he purchased the diamond and thanked us for our service. We had other customers that were debating about other items, so we uploaded a video of the diamond to the product page. The customer response to these videos is very positive.
Specializing: Small businesses often are familiar with all their items. It is crucial to develop an expertise regarding the products you are marketing. Customers like the sellers to show expertise and knowledge regarding the items they are selling. That is the advantage that small sellers have over their larger competitors. In smaller businesses the owner of the company as well as in the case of our own company, expert jewellers, are always available to speak to the customers. The customers like the easy accessibility of the experts and like talking to someone, especially when a large purchase is involved. No one can do this better as a small to medium business owner. Since our company started out as diamond manufacturers and our expertise is diamond cutting, we know each diamond very well and are able to give our customers knowledgeable information, information not always available at the store at the big online retailers. Some of our customers see our listings of fancy cut diamonds that are not always available in local retail stores, so our jewellers can explain the particulars of this cut. For example, our company specializes in fancy diamond shapes such as Cushion Cuts and our expert jewellers can take the time to explain to the unaware customer the unique beauty of this cut and explain how this special cut enhances the color and brightness of the diamond.
- Owning your own inventory: Owning your own inventory is always a great advantage, as opposed to outsourcing inventory. The inventory is always on hand and ready to be shipped quickly. The inventory is also available for additional photos upon customer request.
- Sub categorizing: Sub categorizing makes it easier for customers to find exactly what they want. Customers do not like to spend a lot of time going over lists, they need an efficient method which will lead them directly to the products they are looking for. We found that once we categorized our diamond jewellery into budget, gold type, setting, clarity, color, shape and carat size, it became easier for our customers to spend more time on our website and purchase exactly what they were looking for. We wrote about our strength as a small to medium sized business. However, our main concern is still how to effectively market our inventory.
There is a very large market and we do not have the budget of our big competitors; we do, however, have a few tactics that we can use to spread our inventory for very little costs. Here are some examples:
Comparison Shopping Engines (CSE): CSE's are shopping engines such as Google Shopping, Nextag, Shopzilla, Shopping.com and more. These shopping engines are used to compare pricing among a broad range of categories and include hundreds to thousands of stores. The consumer enters these engines and can compare prices from many retailers at once, allowing him to find the best place to purchase his item at the best price. Most of these comparison shopping engines have a CPC (cost per click) program, the advertiser only pays if a customer actually clicks on an ad. The advantage of comparison shopping engine advertising is that the customer usually clicks on the ad once he is at the end of the purchasing funnel and after narrowing down his choice to a specific product; therefore he is closer to the purchasing decision, allowing us as retailers to expose our products once the customer almost made up his mind. For example, let’s say that customer A is looking in the CSE for a 14 karat white gold, pear shape 2.00 Carat D SI2 engagement ring. He is far advanced in search for this ring than the customer who has just begun to search for an engagement ring and is not quite sure what his budget is and what kind of ring he is really looking for. As far as retailers are concerned, A is a much valued customer because he already knows what he is looking for, as well as being closer to purchasing the product. A comparison shopping engine allows us to easily target the customer.
As a small to medium-sized business we continually ask ourselves how we can compete with the big retail stores. One of our ways is to make sure to advertise actual pictures of diamonds that are listed as opposed to stock photos. Another advantage that we have is that because of our lower overhead, we can be more competitive and flexible in pricing. We also try to cater to niche markets and feature diamond jewellery not often found in big retail stores such as irradiated diamond and loose pairs of stones.
It is always important to build that unique and creative title for the comparison shopping engines that will bring customers to your products. For example, on one of our sites we featured a lower quality 5 carat diamond whose imperfections are visible to the naked eye, making it a very difficult item to sell. However, we posted the actual photo of the diamond and in order to market it we came up with the title, “the only 5 carat diamond under $10,000.” That unusual title brought us a lot of traffic and item was sold to a customer from Venezuela.
Marketplaces: If you cannot beat them join them. In order to compete with the online marketplaces such as eBay, Amazon and Rakuten, one needn't give up. The bigger sites will let you list your items on their marketplaces and to take advantage of the vast numbers of customers that are their base. While listing on these marketplaces, the seller name should be the same as on your direct website. Often customers will Google your direct website after seeing your item on Amazon or the other sites. Often customers that visit and buy from your direct website, even if they indirectly reached it, they can become return customers, thus leading to the growth of your direct online store.
More than a third of our direct website customers found an item on the better known marketplaces and then Google our brand and reach our direct website where we can have higher margins.
Our strategy is to maintain the same brand appearance on marketplace and direct website using the same graphics and homepage on the marketplaces that are displayed on the other sites, that’s how our customers realize that they are buying the same trust worthy brand. Recently, we had a customer who was interested in purchasing a 1.25 yellow radiant loose diamond, they found us on direct traffic but were hesitant to buy such an expensive online item, so we referred them to our Amazon and EBay sites where they could view the feedback written by real buyers. That puts the customer at ease by realizing that we have a reputation to upkeep and are marketing a very strong brand.
When we ship out an item we include the diamond documentation and branding materials with our logo, email and 1-800 number in the packaging, this helps those customers who reached us on the marketplaces become our repeat customers.
Our customers that remember their pleasant experience and good service have the potential of becoming repeat buyers. We have one customer that bought an item from us three years ago for approximately $1000. He was so pleased with the shopping experience that consequently the following year he called us and requested to buy stud earrings for his wife from our direct website therefore maximizing our margins. He also recommended our brand to his cousin who was interested in buying a 2.00 14K white gold eternity band for $2000, and now a few months later we are currently negotiating a $10,000 14K 3 Carat diamond studs purchases with the same customer. Because of one customers good experience from our site we were able to generate more than $15,000 in sales.
Email campaigns: It is wise to keep a list of customers that have purchased from you or even inquired about your products you in the past and then to continue the relationship by emailing them promotions, coupons and the addition of new inventory. This is an important tool that I have used throughout the years. At the beginning of each year, we try to build a campaign strategy and to project which dates are likely to be most appealing to the customer. In turn, we send our customers emails regarding promotional events. For example, we realized that we generate a lot of sales around Valentine’s Day, Memorial Day and the Holiday Season which begins the end of November and the beginning of December. We then tried to think about which items and what promotional method would work was the email campaign. For example, on Valentine’s Day we offered discounts on any item related to heart shape diamonds. We discounted all our heart shaped diamonds set in 14 karat white gold as well as yellow gold engagement rings as well as pendants. We also found that free shipping works for the customers for Cyber Monday. It is very fruitful to send our customers emails before these events and is also a good way to get repeat customers.
Shopping cart: Make sure that you have the right shopping cart. It’s not enough to have the right products, you need to be able make your products easily visible to the customers and offer them promotions and coupons. Find a shopping cart that allows you to easily manage a large amount of inventory as well as to easily spread the inventory using CSE, marketplaces and email campaigns.
Analytics tools: It is very important to monitor your products and understand what tactics and what categories are working and what are not. There are great tools out there that can help you to do this.
There is always more to learn, so I recommend to constantly try to learn and develop new strategies. If you have any comments or questions, please feel free to post a reply to the bottom of this blog post.
Eli Lew is the eCommerce manager for CaratsDirect2U, an online diamond jewellery retailer which specializes in natural as well as clarity enhanced and color-treated diamonds, as well as one-of-a-kind engagement rings.