Small Businesses Aren’t Afraid of Amazon — And You Shouldn’t Be Either

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In a ploy to promote its subscription service, the eCommerce giant has dubbed today (July 15) “Amazon Prime Day” — and for 24 hours will offer “more deals than Black Friday” to Prime members. The event is sparking a media frenzy of sorts, as well as copycat events from the likes of Walmart.

As Amazon continues to build its loyalty program, reduce shipping times and add business units to sell, well, everything, the small business community certainly has reason to raise some eyebrows. And small businesses are giving Amazon a nod, but they are certainly not running for cover. According to a recent survey we conducted of 1,500+ independent retailers, nearly half said they’d be increasing their technology budget in the next year. When asked why, they cited consumer demand for technology in their stores as the number one reason; the need to compete with Amazon was ranked last.

Yes, Amazon is a giant. But as long as you continue to innovate and keep your hand on the pulse of independent business needs, it’s not going to kill your business. Here’s why.

Experience Matters
It’s no secret that online shopping is continuing to grow. But right now, more than 90 percent of merchandise is still bought in-store. That’s a huge amount of brick-and-mortar spending that’s not ending up in Amazon’s proverbial pocket. And while it may chip away at in-store spending as more goods are available online, our Main Streets will never entirely go the way of the Dodo.

Why? Because people want to support small business. They want to continue to be delighted by personalized and unique shopping experiences that don’t merely involve adding items to a virtual cart. They want personalized recommendations. Mechanical Turks, or workers paid miniscule cents on the dollar by Amazon and other online companies to provide shoppers with relevant shopping recommendations can get your preferences right — but they can’t create the type of emotional bond that is created when a shopper walks into a beautifully laid-out store, touches a sweater or presses the buttons on a new mixer, and speaks to a store representative that knows more than they do.

Small Businesses Don’t Want Amazon’s Tech
It’s clear that Amazon sees value in the small business market, making multiple ventures to capitalize on the space. But thus far their forays have not worked. For instance, last summer Amazon released Local Register, a point-of-sale system targeted toward mom-and-pop shops. Not taking Amazon’s product at face value, questions were raised about what would happen if the price-cutting online giant had access to data of the businesses it competes against — not to mention whether or not the company really understand the needs of an independent brick-and-mortar store. While sales data has not been released, media coverage — or lack thereof — around to product suggests it died on the vine.

And while Amazon is hyping Prime Day, it’s not making much fanfare about its business unit that shuttered this month: small/mid-size ecommerce platform Amazon Web Store. Amazon was outdone by competitors like Shopify and BigCommerce not only because those companies provided better technology, but because independent retailers are gravitating toward vendors that are in the business of keeping small business alive, not simultaneously competing with them.

Independent Retailers are Doubling Down on Your Tech
Small businesses are not investing in Amazon’s technology, but they are putting money toward advances. At the same time that Amazon Web Store closes, our survey found that the number of independent retailer online stores increased by nearly 25% in the last year and 22% have plans to open one by the end of 2016.  What does this mean? Retailers are looking for technology that will help them compete in an omnichannel world. With the threat of online giants luring customers with gimmicks like Prime Day, they are not running for the hills, but rather doubling down on their business. But, when looking for a partner to help them succeed, they are looking for one that understands the needs of an independent retailer.

And it’s not just ecommerce that retailers are betting on. They are investing in a whole host of new technologies, including data-driven tools that can help them make smarter buying decisions and create more personalized marketing. They are even taking a serious look at some surprising and futuristic technology — our survey found that 34% of retailers are interested in implementing in-store beacons, up 62% compared to last year.

With Amazon or not, retailers see a bright future ahead. That’s not to say that they can’t learn something from their biggest competitor — convenience, ease, and rewards for their loyalty will continue to be things their customers demand, and Amazon is doing those right. But as long as technology and service providers keep up with the needs of small businesses and innovate to help them compete, this community will continue to shine.

Dax-DasilvaDax Dasilva is founder and CEO of Lightspeed, and is the creative mind behind the company’s suite of retail and hospitality tools. Seeing the rise of iPhone and iPad and recognizing a void in the market for tools that cater to retailers using a Mac-based platform, he launched Lightspeed in 2005, and then transformed it transformed from a bespoke Mac application to a provider of industry-leading commerce tools for 24,000 retailers and restaurants worldwide, processing $10B in annual transactions.