Opinion

What can online retail behemoths like Amazon learn from boutique counterparts?

7 min read

18 January 2016

The less-than-spectacular recent results of UK bastions such as Next and M&S highlights the fact that large-scale retailers cannot rest on their laurels. We take a look at how boutique retailers are riding a new wave as consumer preferences evolve and online retail develops further.

With the market for large-scale utility retail effectively sewn up by retailers such as Amazon, ASOS and Tesco, a new breed of boutique retailer is popping up offering a wealth of unique products. These range from jeans (Hiut Denim) and utensils (Hatchet and Bear) to technology (Native Union) and indoor plants (Ro Co).

As the likes of Amazon focuses on developing speedier fulfilment options such as drones and expanding its product offering, smaller retailers are emerging in its wake, catering to consumers that yearn for a richer and more meaningful ecommerce experience where the provenance, uniqueness of a product and values of a brand trumps convenience.

Websites laid out like Pinterest boards selling products that chime with the artisanal feel of Etsy’s offering, make shoppers feel as if they are buying something special and not just another assembly line commodity.

If Amazon is equivalent to shopping at Westfield, boutique retailers are equivalent to shopping at the local craft market.

Before the boom of social media, when ecommerce websites were expensive to create and maintain, craft retailers’ reach was limited to physical markets or vast online seller marketplaces. Now, these smaller retailers are fully exploiting owned ecommerce channels and using clever social marketing in order to reach an ever-burgeoning customer base.

These boutique retailers are riding a new wave as consumer preferences evolve and online retail develops further. Whilst small, their specialist approach can offer lessons to larger retailers trying to stay relevant in an ever-shifting retail landscape. Below are some of the key offerings of boutique retailers that point to lessons for larger multi-brand retailers to take on board as they compete for consumer purchase again and again.

Brand story

Artisanal retailers offer their customers more than just a product or service, they offer a rich brand story that imbues their offerings with a deeper meaning or purpose. This appeals to brand-jaded millennials looking for a product offering with a side of social conscience.

According to the Deloitte Millennial Survey 2015, most millennials believe that businesses should make a positive impact on their community and the world at large. We’ve seen larger retailers such as Morrisons and Tesco attempt to convey that “market” appeal in order to capture similar types of shoppers.

Large retailers may want to invest in aligning with causes that portray a deeper environmental and social consciousness.

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Unique products

With nearly every standard product in the world available from superstores at rock bottom prices, boutique retailers have recognised that competing on generic products is a dead end. Instead, they have created unique, bespoke products that can’t be bought elsewhere, giving them the ability to support premium pricing models that would be the envy of larger retailers.

A recent study by Worldpay on consumer shopping habits found that 73 per cent of us freely admit we’re in need of inspiration when shopping online. The unique product offerings from micro-retailers could offer customers inspiration for products beyond simply “deals” or low-cost items.

Immediacy

Whilst handmade jeans or carved spoons aren’t themselves quick to make, retailers like Hiut Denim and Hatchet and Bear give their customers instant gratification in other ways. For example, Hiut will release short production runs of jeans, providing their customers with the thrill of urgency, compelling them to buy the products before they sell out.

Home retailers Swoon and Made.com follow a similar approach. Larger scale retailers with the “quantity over quality” approach would do well to take note of this “limited edition” model, to encourage immediate sales and limit surplus stock.

Engagement

Boutique retailers differentiate themselves from the faceless leviathans of online mega-retail by enabling direct and deep engagement between themselves and their customers.

Whether this comes in the form of informative and engaging email communications, an active Twitter customer service or a popular Instagram feed, each touch point deepens the relationship the brand has with its customers.

Consumer engagement for the likes of Amazon is more tied up in customer service offerings, however, social media engagement with communities within their consumer demographic e.g. book enthusiasts and craft hobbyists, can be more powerful.

Appealing to people’s passions can help to increase the brand loyalty of those looking for more than just the lowest price.

According to Nielsen’s 2015 global retail analysis, 55 per cent of global online consumers across 60 countries say they are willing to pay more for products and services provided by companies that are committed to positive social and environmental impact.

With their emphasis on building communities, offering unique products and providing a meaningful shopping experience, boutique retailers promise a more vibrant and diverse customer journey. 

Consumers are willing to pay more and even wait longer for products that they feel are worth it. Boutique retailers have a unique opportunity to leverage their brand stories, and the effort involved in bringing unique products to market in order to create that consumer connection.

Larger, multi-brand retailers will always struggle to mimic the success of these boutique retailers. Whilst larger retailers compete over the same small patch of ground by trying to better each other on price and delivery options, boutique retailers are tempting consumers away by pulling on heartstrings, offering unique products and promoting social causes.

The less-than-spectacular recent results of UK bastions such as Next and M&S should further highlight the fact that large-scale retailers cannot rest on their laurels.

Darryl Adie is managing director at ecommerce agency Ampersand