In June 2020, months into the Covid-19 pandemic, the Mall of America was unable to pay its expensive mortgage payments – north of $1 billion – for two consecutive months. Lockdowns, financial difficulties, and changing consumer buying behaviors have caused a shift in how we shop in America and continue to shop today.
The impacts of the Covid-19 pandemic on online shopping have influenced consumer behavior for the foreseeable future. As retail chains face unique challenges, the stakes have never been higher for local small business owners struggling to earn a living. Hope has been hard to find.
Today, however, a number of technologies have converged in ways that could help SMBs increase their online visibility where it really matters. Instead of blindly seeking interested consumers, SMEs have an increased opportunity to team up for mutual benefit. Instead of an e-commerce world dictated by a few players already dominating the online shopping industry, collectives of niche business owners can position themselves to put consumers back in control of their shopping experience and their decisions.
Enter the “Digital Mall”, a networked e-commerce marketplace of independent retailers looking to compete with the giants and revolutionize the way we shop.
Can digital malls level the e-commerce playing field?
Founder of the hyper-local digital marketplace city shop, Ash Cintas believes digital malls are the future of retail for consumers and small businesses. City Shoppe offers consumers the ability to browse by product, location, and other criteria to help form a goal-oriented marketplace.
In exchange for supporting local retailers, customers receive incentives, which can include health and wellness products, home decor, and apparel.
“To succeed in today’s retail climate, businesses need to be accessible and priced competitively,” says Cintas. “Increasingly, that means having a strong online presence that celebrates individuality and understands consumer wants and needs.”
There is simply no way around it. Potential customers search for what your business has to offer using their smartphones. This percentage will only increase, so SMBs without a high profile, niche-specific online presence risk losing sales to more visible competitors.
The dawn of a new era of retail
Digital malls have the power to put shoppers back in control of how they spend their money. They bring greater diversity of stores to consumers’ fingertips and represent a chance for small and medium-sized businesses to compete in the fun, convenient, and fast-paced e-commerce marketplace.
As the market evolves, business owners need to avoid a black and white mindset when revamping their business model. Digital malls could help SMBs reap the same benefits of shared resources as their physical counterparts. Just make sure you don’t leave any of your traditional customers behind.
Spend your marketing dollars smarter, not faster
Online retail giants held a decisive advantage over shopper convenience long before the Covid-19 pandemic wreaked havoc on small businesses around the world and left the international supply chain to burn out in its wake.
The e-commerce industry is currently worth $56 billion. About 50% of that pie goes to just one company, Amazon. The retail giant raked in more than $200 billion in revenue in 2021, according to an April 2022 report by The Economist. SMBs spend millions of dollars and thousands of hours trying to improve their online profile, but often get little or no return on investment.
E-commerce is expected to account for 95% of purchases by 2040. Without innovative solutions such as digital shopping malls, our SME community could quickly disappear. Meanwhile, retail giants continue their lucrative reign over e-commerce, vastly outpacing small and medium-sized businesses. While Amazon Marketplace offers third-party sellers the ability to reach millions of consumers every day, with the improved access comes the steep price tag of 19% of sales.
From then on, business owners must respond by demanding increased accountability and empirical results for every online marketing dollar they spend. If your marketing team is still taking an approach that boils down to putting content out on the web and hoping for the best, it’s time to reorganize. The wishful thinking and vague statistics that don’t translate into sales are out.
SMBs need to uproot and eliminate barriers in the customer journey
Unfortunately, things in the brick-and-mortar world are equally bleak for retailers. More than 12,200 retailers closed in 2020. Department stores and mall retailers were the hardest hit. Businesses deemed “non-essential” have been given the brute force of shutdown restrictions. Many shoppers looking for local options have found themselves empty-handed.
Although “Buy Local” has long been the mantra of the U.S. Small Business Administration (SBA), shoppers generally struggle to understand How? ‘Or’ What to support businesses that show a local touch when global health concerns limit travel and increase costs.
Competitive e-commerce giants can crush small and medium-sized businesses’ chances of growth with advertising and search engine optimization (SEO) budgets alone. With the big five tech giants claiming the lion’s share of the market and brick-and-mortar stores facing unprecedented rent spikes, where does that leave small and medium-sized businesses looking to sell targeted and selected products without the risk of being repossessed?
Team up with like-minded SMEs for greater reach and results
Digital malls can provide more undersized retailers with safety and security in collaboration. By creating a community of businesses sharing acquisition, cost, and audience to get real returns, buyers receive search results that boast locality, diversity, and character.
The potential benefits go far beyond the personal preferences and feel-good vibes we get from supporting local entrepreneurs. Local shopping, even online, has a tangible geographic impact. For example, the SBA estimates that two-thirds of new jobs are created by small businesses. This dynamic fosters a culture of innovation and healthy competition.
While creating jobs and encouraging a healthy workforce, these businesses also generate local taxes through trade and corporate income taxes that benefit education, welfare programs, and more. health and civic projects.
Ultimately, of course, the decision will always be with the consumer. However, if you’re shopping for that “just right” gift or curated item for your friend, chances are you need to head to the digital mall of the future. The good news is that at least you have a choice.