How Smaller Brands Can Compete With Temu and Amazon This Holiday Season

This holiday shopping season promises to be another marathon for e-commerce brands, filled with the expected twists and turns that a three-month shopping period brings. Although, while an extended shopping period might sound like good news for e-commerce brands wanting to capitalize on the season, one already prominent thorn in the side threatens to dampen the mood: inexpensive online marketplaces.

While small and midsize businesses (SMBs) competing with marketplaces like Amazon.com isn’t new, the rapid rise of Chinese marketplaces like Temu will likely disrupt holiday sales for e-commerce brands this year. More than half of U.S. online consumers have shopped at Temu in the past year, and with Amazon launching a Temu-like discount store on its app, the appeal for less expensive products may be too much for consumers to pass up, especially early in the season.

For brands to successfully compete with deep-discount marketplaces this holiday season, they’ll need to be thoughtful about their marketing approach and lean into what they have that large marketplaces don’t. Here are three things brands should do now to successfully compete with marketplaces this holiday season:

1. Lean into delivery times.

Shoppers purchasing from Temu typically receive their orders anywhere from six days to 20 days, depending on whether they're shipped from the United States or China. This is a challenge for customers. Nearly one-third of Temu shoppers cite long delivery times as the reason why they dislike the retailer.

Brands can take advantage of their competitors’ slower shipping speeds by reinforcing messaging around their own quicker delivery times. As we move deeper into the holiday season, longer delivery windows will be less appealing to shoppers. Making this messaging more visible and blunt may be enough to convince shoppers to buy directly from an e-commerce brand. Starting the messaging early can help establish the importance of shipping speed to consumers.

2. Exploit your brand’s competitive differentiators.

Believe it or not, many smaller brands have several competitive differentiators vs. the giants of the world. I’ve already mentioned shipping speed as a potential differentiator for some. Another such differentiator is product quality. More than a quarter of Temu shoppers are dissatisfied with the quality of the products purchased on the site. 

This presents an opportunity for brands to highlight their product quality across all channels, especially in email and on social media, by showcasing things like star ratings and product testimonials. This content can affect sales during the holidays. After all, who wants to gift something of poor quality?

Promoting your brand as a domestic business is also a differentiator. When competing against Chinese marketplaces, some people will feel more comfortable purchasing from either a U.S.-based company or one with a U.S.-based customer service team. Going one step further, brands can profile their U.S.-based employees by highlighting things like staff-picked favorite products in their messages.

Finally, if you have a customer-friendly return policy, promote it everywhere. While it may be true that marketplaces offer free returns, you don’t need to beat them. If you offer the same or something remotely comparable, the other differentiators may be enough to make shoppers feel more comfortable purchasing from your store instead of a foreign marketplace.

Regardless of the channel, e-commerce stores should promote their competitive differentiators at every customer touchpoint.

3. Use email and SMS to build customer relationships.

Competing with Temu on shipping times may win some sales, but it’s not a strategy that will beat Amazon. However, SMBs can do one thing Amazon and other marketplaces have trouble doing: building customer relationships.

Brands can use first-party and high-ROI marketing channels like email and SMS to create campaigns that use conversational language, highlight top-rated products and customer testimonials. Furthermore, they can run exclusive email- and SMS-only promotions, especially around key dates such as Black Friday and Cyber Monday. Communicating directly with consumers can provide a more personal feel to the shopping experience and establish and build brand trust.

Automated messaging plays a crucial role in enhancing consumers' shopping experiences and increasing overall sales. Automated emails account for 41 percent of all email orders while comprising only 2 percent of email sends. The most impactful automated messages for driving sales are welcome, browse abandonment, and cart abandonment email and SMS messages. Collectively, these messages account for over 80 percent of all automated email orders.

It’s evident that targeting shoppers at high-intent stages of their holiday shopping journeys is essential. Combining the suggestions above with the automated messages themselves is a double-whammy. E-commerce brands should leverage these messages to their advantage and incorporate them into their overall holiday email and SMS marketing strategies.

Conclusion

The increase in competition from low-priced marketplaces combined with election- and economy-related worries presents challenges for e-commerce retailers this holiday season. But it doesn’t mean they can’t thrive. By communicating directly with customers through first-party marketing channels and differentiating their brand and products, brands can build stronger customer relationships that translate to increased holiday (and post-holiday) sales.

Greg Zakowicz is a veteran marketer and the senior e-commerce expert at Omnisend, the all-in-one e-commerce marketing automation platform.