BUILDERS
The tipping point - lessons for small businesses
Updated: July 5, 2020
2-minute read
The only keyword a small business will be able to defend, in the long term, is its own brand name.
The battle for search results
The takeaway from my previous post is that the future of online commerce for fast-moving consumer goods will most likely depend on two or three major platforms. Here is the link:
To survive on these platforms, your product has to appear on the first page of search results. In China, where a number of major brands now garner the largest share of their sales from e-commerce, keyword purchases are often the largest item in a company’s marketing budget.
A consumer ordering 35 products does not have time to search several pages onscreen. Unfortunately, here in Canada, there is only one way to buy keywords like ‘breakfast cereals’ on a supermarket banner’s platform: by paying at least $10,000 weekly for a promotional bundle – an expense that only large companies can handle.
Companies that cannot afford this have two other options:
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Focus on niche categories
A small brand will improve its chances of gaining ground by focusing on a niche that is overlooked by its bigger competitors. When a user types ‘pasta’ in the search bar on a major banner’s platform, two brands will dominate the first page of search results here in Quebec: Catelli (a subsidiary of the Spanish multinational Ebro, the world leader in pasta) and Barilla (the second-largest pasta company in the world).
When the user types ‘organic pasta’, however, two niche players will be more prominent: Bioitalia and GoGo Quinoa. Similarly, Boldwin products will appear among top results in a search for ‘organic beers’, but they will not appear for several pages if the keyword typed in is ‘beers’ or even ‘microbreweries’.
2. Invest in your brand
The one thing that will work even better for small businesses is a search for ‘Boldwin’ or ‘Bioitalia’, rather than ‘organic beers’ or ‘organic pasta’.
Hema Fresh employees prepare orders for delivery
Starbucks Reserve Roastery, Tokyo
It is easy to speculate that the big brands will eventually invest in every promising niche category once they deem it adequately lucrative. The only keyword a small business will be able to defend, in the long term, is its own brand name.
Unless a company aspires to selling only private labels, brand awareness – whatever the size of the business – is essential in a digital world.
Digital marketing calls for discipline and new skills
Many successful new brands found on supermarket shelves today – such as Gusta, a company that sells vegan sausages and cheeses – were built largely on the Web.
The emergence of digital marketing has made investment in branding more affordable. Companies can now specifically target consumers who are most receptive to their offer. A few hundred dollars is enough to cover the cost of a social media campaign that reaches thousands of prospects. This approach, however, requires discipline and new skills.
The first priority is knowing your target clientele, their habits and the values they share with your company and its founders. You then need to take some time to build a community that likes you and follows you on social media.
GoGo Quinoa engages its community on Instagram about healthy cooking and doing away with unnecessary packaging.
Ki Explore, a company that creates activities for professional women looking to ‘reset’, was launched through videos that cost less than $300 per episode. (Full disclosure: the founder of this company is my wife ☺ )
And if you’re over 50 years old, you’ll have to fully accept the reality that the transition to digital marketing calls for a new set of skills.
The generational aspect of the transition should be recognized with some humility. This involves recruiting newer, much younger talent and entrusting them with decisions on issues that lie outside your own areas of expertise.
An uncertain outcome for the M&A game
The inevitable mergers and acquisitions between e-commerce platforms pose a risk to suppliers, who could be excluded from a game of musical chairs. Two or three platforms will emerge victorious, but there is no way of knowing which ones. So you need to play it safe and, for the time being, continue to diversify your client base of food retailers.
Finally: strategic and tactical imperatives
First of all, strategy. Food processors are facing two existential issues: expertise in digital marketing and brand awareness. These should be priorities.
Next comes the tactical element. The only way to manage the risk in this game of musical chairs is to cultivate relationships with decision-makers within the main supermarket banners and the most dynamic specialized native apps. Making sure they recognize you as a leader in your category is critical. The results of your branding efforts will make things easier for you.