This website was archived on July 21, 2019. It is frozen in time on that date.

Sonya Mann's active website is Sonya, Supposedly.

Small Local Retailers Struggling To Compete With National Brands (As Usual)

Have you noticed #brands in your feed, invited or not? Of course you have. Social media and email marketing are powerful channels for anyone selling a product to reach potential customers. The goal is to usher people toward the gaping maw of a sales funnel. Granted, at the moment ecommerce accounts for less than ten percent of retail sales, but the numbers are higher when it comes to apparel. A tenth may not seem like much, but the market-share is steadily growing.

Amazon logistics center in Madrid, Spain. Photo by Álvaro Ibáñez.
Amazon logistics center in Madrid, Spain. Photo by Álvaro Ibáñez.

National or international brands have the resources and know-how to use digital sales channels with utmost savvy (notwithstanding marketers’ cringeworthy affinity for youth culture). Can smaller businesses keep up? It’s more difficult to coax a customer into your brick-and-mortar shop than it is to get them to click a link. Even when small businesses are based online, lacking economies of scale means that they can’t offer the tempting perks and discounts that big brands do. Keeping everything on sale, all the time, eats into your margins.

The proprietor of a now-closed outdoorsy retailer in Wisconsin, who prefers not to be identified by name or city, doesn’t see big brands “supporting the little guy”. In an email she explained, “Certain brands keep separate inventories for their retailers versus their online business […]. It is hard to explain to a customer that you can’t get an item, when they can go to the brand’s website and buy it direct. The brands generally offer free shipping and many times 15%-off coupon deals just for sharing their email.”

She observed, “Customers are being trained to only buy with a deal or incentive.” On the phone, this former store-owner described a man who went into a local sporting goods shop to examine the products, while as the same time searching for the best deals on his smartphone. “He had absolutely no qualms about that,” she told me. Instead of buying from the store whose inventory he was touching and evaluating, he bought from Amazon or a similar retail aggregator, in order to save a couple of dollars.

Instagram post by REI.
Instagram post by REI.

From the customer’s point of view, shopping online for the best possible deal makes complete sense. Most won’t even bother to take advantage of testing a local store’s physical goods. Why wouldn’t you purchase the same thing cheaper without even having to leave your home? Everyone knows Amazon is a cutthroat company willing to crush competitors of all sizes, but that doesn’t stop people from shopping there, and it never will. If you can pay less to buy a parka online, and have it delivered to your doorstep, the alternative must be very attractive to entice you to do otherwise.

In 2013, technology analyst Ben Thompson wrote, “With the loss of friction,” meaning hassles and barriers to action, “there is necessarily the loss of everything built on friction, including value, privacy, and livelihoods. […] The Internet is pulling out the foundations of nearly every institution and social more that our society is built upon.”

Thompson continued, “Count me with those who believe the Internet is on par with the industrial revolution, the full impact of which stretched over centuries. And it wasn’t all good. Like today, the industrial revolution included a period of time that saw many lose their jobs and a massive surge in inequality. It also lifted millions of others out of sustenance farming.” It’s not all good, but it’s not all bad either. However, when you’re a family business-owner who is being “disrupted”, it’s almost entirely bad.

Traffic on Pyrmont Bridge in Sydney, Australia. Photo via Powerhouse Museum.
Traffic on Pyrmont Bridge in Sydney, Australia. Photo via Powerhouse Museum.

The analogy doesn’t work in every respect, but mostly this is the current state of affairs: Traditional retailers are horse-drawn carriages compared to steam-powered trains, or traditional taxis compared to Uber. Because of the internet, anyone can easily set up the infrastructure to sell directly to end users. Adjust your value proposition and differentiate or die, because the market doesn’t care about your ability to put food on the table.

This is the hard truth retailers have to confront: If you can’t compete on price or convenience you have to compete on quality, but it’s impossible to compete on quality when you’re selling the exact same product that people can easily buy online for less money. All you’re left with is the experience, the feelings you can evoke and the values you extol, urging customers to “shop local” and, as the anonymous Wisconsin store-owner said, “support the little guy”. She suggested staging events and collaborating with other local businesses, all boosting the community together. Her store used to host yoga classes run by a local instructor. Then Lululemon moved in down the street and also hosted yoga classes — free ones.

Castle in the Air is a truly gorgeous shop in Berkeley, California.
Castle in the Air is a truly gorgeous shop in Berkeley, California. Photo via Yelp user Michele C.

This is all very grim. Does the internet revolution mean that retailers based in physical stores should give up hope entirely? Of course not. It means that you have to be intentional about your business strategy, and understand the ways in which you can and cannot compete. It means you have to double down when it comes to reaching the customers who you can actually serve, to whom you can offer a benefit that is meaningful to them.

Understand that shopping in person instead of defaulting to the cheapest, highest-rated item on Amazon is now a luxury. Craft a rewarding experience, whether rustic or glossy, for the customers who show up in person.

Written in early June, 2015. Languished in my Google Drive until now.

Self-Referencing To Build Meaning Instead Of SEO

points on a map, linked together
Photo by Cali4beach.

Ben Thompson’s tech analysis is recursive, which is one of the various reasons to appreciate what he does. Practically speaking, I mean that Thompson constantly references his past work, linking to previous pieces in every new one. He builds new arguments from old ones, or rather extends his past assertions, instead of constructing each article entirely from scratch. Smart approach, whether it’s conscious or not.

information linked together
Illustration by Elco van Staveren.

Thompson’s recursive writing provides a sense of timeline, grounding each new post in a fuller body of work. This gives the reader a sense of ever-mounting value, and provides an intellectual narrative as Thompson’s own positions evolve.

So much of the content on the internet feels random, contextless. Often, standalone pieces don’t actually manage to stand alone. Thompson defies this trend, and convinces drive-by readers to become dedicated subscribers, by tying everything he publishes to everything else he’s published.

Niche Websites Aren’t Trying Hard Enough To Make Money

Blinded by Journalism
Photo by Ahmad Hammoud.

How to fund online journalism? For the most part, the conversation has focused on advertising. Hampton Stephens, founder of the self-sustaining World Politics Review, finds this puzzling. He cautions websites backed by venture capital, like BuzzFeed and Vox:

“The lesson that most media startups seem to have taken from the evisceration of advertising-supported journalism over the past two decades is that more innovation is needed… in advertising. […] To ensure the kind of ‘accountability journalism’ that is critical for any democracy to flourish, well-funded new media players must experiment with models other than advertising.”

Apparently everyone wants to copy the free metropolitan weeklies stuffed with “medical” marijuana enthusiasts. (No offense meant, East Bay Express.) A few high-end legacy newspapers—and premium newcomers like Stephens’ World Politics Review—have made subscription systems work, but only up to a point. The signups are slowing down. So… that’s it. Alternatives are strangely infrequently discussed, despite the occasional hat tip to research divisions.

Here’s the problem: Advertising works reasonably well when a website is deluged by traffic, but what about smaller operations? Are niche editorial websites doomed, or are they thriving? The general trend can be difficult to track, but journalistic endeavors of all sizes are trying to guess how they will be funded in a mobile-first world populated by Millennials who balk at paying for information.

Continue reading “Niche Websites Aren’t Trying Hard Enough To Make Money”

Who Pays Writers? Apparently Not RSS Users

retro 1920s blogger
Mike Licht has made and posted a million of these for some reason.

Necessary context for the upcoming screenshot: Ben Thompson is a popular tech blogger who offers an exclusive email newsletter for $10 per month. Recently some kind of bug inserted a couple of subscriber-only posts into the blog’s public RSS feed. Here’s a brief Twitter exchange between subscriber Blaine Wilson and Thompson:

RSS readers don't pay for content
Wilson: “Hey Ben, I’m interested to know if the RSS leak lead to any sort of upside in update subscriptions as people got a taste.” Thompson: “I’ve learned that RSS users aren’t really the types to pay for content :)”

I don’t have any substantive commentary on Thompson’s observation, but I think it’s worth noting. (Obviously, considering that here I am noting it.)

classic art blogger photoshop
Also by Mike Licht. Thanks, dude.

Destroying Supply & Demand Barriers

Ben Thompson of Stratechery on the Facebook-as-publishing-platform furor:

“What Facebook is doing—and not just Facebook, but nearly every disruptive Internet-based service from Uber to Amazon—is destroying all of the barriers between supply and demand. Moreover, this destruction isn’t really the fault of the destructors; it’s the natural outcome of the Internet, where distribution is free and marginal costs are zero. It’s the most important story of our time.”

Quote from the Daily Update email, 3/24/2015. I highly suggest subscribing.

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