How to Replicate the Superior SMB Retail Experience

Retailers of all sizes have had more than their fair share of struggles this past year. From supply chain issues to high inflation trends, most are just trying to stay afloat and have hardly thought about how to improve their customer experience at scale. However, one thing is for certain — many small and midsize businesses (SMBs) came out on top this year. How? By providing one-to-one customer experiences that their larger counterparts failed to adopt.

According to ActiveCampaign’s latest research study, 84 percent of consumers plan to shop small this holiday season. This makes sense, considering our previous research revealed 60 percent of consumers indicate negative sentiment toward retail giants, jumping to 69 percent of Gen Z and 51 percent of boomers. It’s clear that consumers are losing trust in major retail players because of their lack of product and price transparency. They're clearly out of touch with their customers. Smaller retailers have proven their savviness over the past few years, and even with fewer resources, have worked hard to maintain one-to-one communication and personalization, even when face-to-face interactions weren’t possible.

One of these retailers is Apple Rose Beauty, a beauty business which increased sales by 300 percent since implementing customer experience automation. By moving its store online and using email and sales automation to send personalized messages to all customers, Apple Rose Beauty turned a mainly in-person approach into a thriving e-commerce business overnight. This is a situation many retailers found themselves in. In fact, ActiveCampaign’s recent survey of businesses found nearly 70 percent of companies that grew over the past year changed their business model in some form — whether that meant moving services online, targeting different customers, or building a hybrid model with in-person and online services.

Many SMBs have told us that their scrappy roots kept them from panicking when they had to pivot how they were used to doing business and communicating with customers. This mindset allowed them to experiment and improve their marketing strategies, too. Instead of meeting a customer one time at an event, they used online events to obtain consumer emails. Then, businesses engaged those people with content that was relevant to their interests. Ultimately, this led to either purchases or implementing retargeting strategies to continue to nurture them as potential customers. Not only did this help businesses grow, but it also created a better experience for the end consumer by receiving relevant and personalized communications from the brands they support.

Because SMBs are often more focused on one-to-one communication with their customers, they're better equipped to handle challenges such as keeping customers informed about issues on inventory management, something large brands are currently struggling with. During the pandemic, major retailers noticed consumers piling up on household goods, exercise gear and sweatpants, among other things. They continued to plan for an increase in demand, but what they didn't plan for is the market swinging the other way and consumers prioritizing food and travel over homeware and clothing once pandemic restrictions loosened.

It's clear that metrics and wide consumer trends drove retailers' decisions, when they should have actually been talking to customers directly, asking them questions, collecting data, and then using that information to drive future decisions and improve the customer experience — and their bottom line. SMBs are actually primed to handle this situation better because they're regularly talking to customers and basing these decisions on feedback, rather than from sheer numbers alone.

It’s been suggested that many major retail holiday sales events have aimed to rid company warehouses of excess inventory, which made consumers skeptical of the rapid price fluctuation leading up to the events, during and after. With this recent distrust in retail giants, it makes sense that consumers plan to spend money with their favorite SMBs this holiday season. If large retailers want to win back market share, they need to start prioritizing one-to-one experiences and transparent communication to customers.

Dutta Satadip is the chief customer officer at ActiveCampaign, a customer experience automation (CXA) platform.