ONLINE SHOPPING

How a personalisation strategy can help smaller online retailers compete

By our African Marketing Confederation News Team | 2024

Can smaller single-brand online retailers beat the dominance of the big players such as Amazon? A study finds there are ways.

Do brands stand a chance of eroding the dominance of giants like Amazon with their own online shops? A study recently released by professors Jan Becker and Christian Barrot of Kühne Logistics University (KLU) in Germany finds the answer is ‘yes’.

The believe brand-operated online shops that sell directly to customers (D2C) can indeed compete with major merchants, especially when it comes to exclusive and personalised products, where customers intensively inform themselves before making a purchase.

The study, titled ‘Understanding customers’ choice for digital D2C versus multi-brand operations’, has been published in the peer-reviewed Journal of Retailing.

It shows how brands can get their online shops in the best possible shape, and who has the competitive edge at different points in the purchase decision-making process.

In the dynamic and competitive field of digital retail, navigating potential customers is vital to success. As the study by a team led by Becker and Barrot shows, consumers prefer the personalisation, additional information and selection offered by smaller D2C online shops – even before they’ve given any thought to the product they’re looking for.

Photo by Kindel Media from Pexels

Concrete tips for retailers

The most decisive factor is the personalisation of the customer’s experience at the online shop, the study concludes.

Retailers can flourish by focusing on product categories with more product-mix depth when setting up their D2C online shops. At the same time, they should pursue selective marketing strategies for exclusive products.

“Direct sales strategies hold considerable potential,” says Professor Becker. “Understanding consumer preferences and properly integrating the category qualities of their products means staying competitive on the digital marketplace.

“Our research offers valuable insights for branded companies looking to optimise their omni-channel strategy and D2C operations.”

You can find out more about the study here.

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