Shopify: Customer service lets small brands compete with marketplaces

Independent retailers and brands face stiff competition from large online marketplaces, but can leverage personalization and product quality to thrive.

In a virtual roundtable discussion sponsored by e-commerce platform Shopify, “The Return of Local Retail to U.S. Main Streets, two independent retailers which use the hosted Shopify solution to perform e-commerce discussed the challenges and opportunities of omnichannel retailing.

Marsha Jean-Louis, brand director of specialty hair product retailer True Glory Brands, said small retailers need to play to their unique strengths to combat the “Amazon effect” of Amazon and other online marketplaces.

“The marketplaces turn what we sell into a commoditive product,” said Jean-Louis. “It becomes a fast race to the bottom, which is not a competition we want to join. We do not sell on marketplaces. Instead, we hyperfocus on discerning customers who look beyond low prices, because the quality of products on marketplaces is low.”

In addition to offering higher-quality, U.S.-manufactured products, Jean-Louis said True Glory focuses on its six brick-and-mortar stores in the Atlanta area and North Carolina to create market distribution and focus on repeat customers who value a high-end experience. True Glory refreshed its stores pre-pandemic, in 2019.

Heather Howard, COO of specialty footwear/handbag retailer Rothy’s, said physical stores and the Internet are both important consumer touchpoints.

“Rothy’s focus on the Internet is a big, strategic initiative for visibility,” said Howard. “We build stores to serve the communities our customers are in. Our shoes are made from recycled plastic bottles, and the brick-and-mortar stores lets us tell our brand story and lets the customer touch and feel the product.”

Looking ahead, Jean-Louis and Howard agreed that buy-online-pickup-in-store (BOPIS) and curbside pickup, which dramatically increased in popularity during the pandemic, will continue to serve as crucial omnichannel services as consumers emerge from COVID-19. According to Jean-Louis, True Glory is focusing on building “microstores,” often in shared spaces, that mainly serve as showrooms for customers to browse items and pick up online orders.

Arpan Podduturi, director of product, retail, Shopify, moderated the discussion and also offered some thoughts on how the role of the brick-and-mortar store is changing post-pandemic.

“There is a lot of empty store space and a lot of inventory from retailers to fill that space,” said Podduturi. “Rents are a little lower and landlords are willing to be a little more flexible. There are more fluid opportunities. Retailers are now measuring the ROI of brick-and-mortar stores not just by sales per square foot, but by omnichannel sales.”

Shopify also announced a new local discovery on its Shop app. The feature, which is used by both True Glory and Rothy’s, notifies consumers of nearby trending stores and products based on their location, and also enables them to purchase select products for pickup at a nearby store or for home delivery.

In addition, Shopify is partnering with financial products and services company Affirm to offer U.S. retailers on its platform a buy now, pay later solution called Shop Pay Installments. The service is available to existing Shopify retailers and will be automatically enabled for new retailers when they enable Shopify Payments and Shop Pay.

With Shop Pay Installments fully integrated with the Shopify platform, retailers can offer customers the opportunity to pay for purchases in four equal installments, interest-free and with no fees. Retailers also retain a centralized view into activities such as performance, product pages, and inventory.