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There’s something noble and attractive about the little guy standing up against the giant. We feel special and better about ourselves when we go to the local mom-and-pop establishment and give them our business — I know I do. I also know I don’t feel that way after I leave Starbucks or some other huge chain. Apparently, there’s a new trend for people to even rebel against giant web retailers by shopping at smaller online stores.

Yet, we all still frequent these same giant retailers. Why? They price everyday and popular items at the lowest rates. They are ubiquitous and convenient.

So how can the small guys compete with the big guys? This problem is something I spend an enormous amount of time and thought on — why I work on making display advertising work for local businesses so they have the same reach and capabilities as their largest competitors.

Thinking about these small brick and mortar retailers, I’ve concluded that they need turn their weaknesses into strengths if they want people to go to them for more than the occasional “feel good” purchase. 

The rise of Amazon.com in particular has exposed several deficiencies of small local retailers:

• Poor Selection. Amazon has the largest product selection because it isn’t constrained by local physical inventory capacity.
• High Prices. Amazon can purchase items in bulk at such scale that it often gets the lowest prices for many products.
• Physical Storefront — Amazon doesn’t have the cost of maintaining storefronts
• Labor Costs. Amazon doesn’t have staff people to personalize experiences or address issues. Instead, Amazon can suggest purchases through data mining and clickstream data.

To change these disadvantages into advantages, local brick and mortar shops need to rethink how they design their retail experience:

• Focused Selection. Local retailers need to curate product offerings and offer fewer choices. Amazon.com has 1,000 different brands and products for any given need which make choosing something quite difficult. Local retailers can learn from Apple and stock a very limited selection of items so they only have “the best” solution for a particular problem.
• Special Products. Local retailers need to stock non-commoditized items. Any product that can be traced to a product number (ISBN or SKU) is always mass produced, mass marketed, and mass discounted. Local retailers need to focus on stocking more locally produced items or uniquely distributed ones so they aren’t competing on price directly. 
• Faster Delivery. Amazon.com can do 1-day shipping if needed but it cannot do same-day delivery yet since its fulfillment centers are too far from many consumers. Local retailers can offer same day pick up which needs to be emphasized more, but going further, they could make use of couriers to offer same-day delivery.
• Human Service. Amazon.com doesn’t make it easy to reach a human being when you have a return or a problem. Shopping locally should be a human experience where a person is always there to help. The labor costs are really marketing costs as Zappos looks at it — when else do you get the undivided attention of a customer and chance to convince the customer to spend money with you.

The little guys need to be scrappy and change the terms of the battle. They have a fighting chance and I hope they win.

Inc. Magazine - “What’s an Entrepreneur”

Interesting demonstration of how humans tend to make the wrong decision based on framing.

Thomas A. Edison 

One resolution I’ve made for 2012 is to take a strong stance on more issues. I’ve always felt some people are too opinionated about things they don’t know enough about, which probably made me overcompensate and not form strong opinions to share. Some friends have pointed out that even when I know a lot about things, I often times don’t take a strong position about them. Instead, I comprehensively recite both sides of an issue, but I don’t pick a side for things like:

•  Is this startup idea good?
•  Which design looks better?
•  Who deserves more from a partnership?

I used to think the easiest think to do is to have a strong opinion while the harder part was having a true understanding of both sides. However, a good friend recently shared the following with me, which completely changed my perspective:

Strong opinions are important because you need to believe in something to guide your decisions in order to accomplish anything. It’s the difference between being an author and a book reviewer. The author has to decide what is important and what should be cut and what the point of the book is. Every word that is in the book is there because the author decided it should be there. The book reviewer can read a book and comment on the decisions that were made by the author, but he will never be able to write a book because he can not make the important decisions, he can only comment on the decisions others have made.

Being well rounded and understanding that both sides of an argument have pros and cons is easy. It’s moving past that and making a decision that is hard. As an entrepreneur by definition you can’t be content to accept both sides of the coin and sit idly by. You have to consider both, and then fully commit to one. Strong opinions lead to vision because only when you have made a decision about what is important and what is right can you start to see how the future should be.

So maybe by having stronger opinions this year, I’ll have a better sense of what’s coming the following years. That seems worth trying for at least.