How Small Retailers Can Compete With The Giants Of Retail

By Stephan Hablutzel, Updated: 2022-04-19 (published on 2019-07-02)


The giants of retail might be trailblazers, but they are still fair game for the little guys.

Much space in blogs is dedicated to the retail revolution driven by insights into consumer behaviour, powered by big data and instant home delivery. 

Giant behemoth retailers Walmart and Target, new-generation players like Amazon in the US, ASOS and Tesco in the UK, and Alibaba and JD in China, are leaders in the modern way of retailing.

The focus of their business model is same-day delivery, an efficient return process, and to provide a seamless customer experience. Cutting-edge third-party logistics, along with a variety of payment options is essential and require top-notch technology working behind the scenes. 

Does that mean small and medium-sized retailers are naturally at a disadvantage? Are retailers who lack the scale and financial muscle to emulate the likes of Walmart and Amazon doomed to always be outflanked?

The Tactile Advantage

Fortunately, the outlook is not as bleak as it may seem for smaller retailers thanks to a number of trends which play into their hands. While shopping online is convenient and conducive to making informed decisions for shoppers, it also commoditises the whole shopping experience. The relentless drive of the major players to push down prices and cater to the masses requires rigorous pruning of their stock assortment. 

The larger the online retailer, the less likely the shopper is to be able to interact with a human – the best one can hope for is a conversation with an automated chatbot. Shopping online is a one-dimensional affair: there is no room for the tactile experience – the touch, the taste or the smell. 

Staying Relevant

Small and medium-sized retailers need to focus on shopping as a human experience to establish a point of difference to their larger rivals. 

We live in a world where consumers do not solely seek convenience. They also want their shopping experience to be enjoyable and fun. So proven, traditional factors which make retailers successful – such as store design, focused product range and smart pricing strategies combined with short replenishment cycles – must continue to be mission critical. 

Smart smaller retailers should further complement this with a clever online presence in social media where they can meet potential customers at the place where they make decisions. All this could probably be best summarised as ‘relevance’.

Systems and Processes

Importantly, this different focus still needs to be complemented by a strong support system and high-quality processes working in the background. 

A process is defined as ‘a series of actions or steps taken in order to achieve a particular end’. For example, retailers need to ensure they can fulfil shoppers’ expectations by ensuring that stock is available. Data collected from point-of-sale systems must show which products sell and which do not. Such information needs to be accurate and up to date. It also needs to be granular enough to allow the retailer to fine-tune the assortment and shorten the replenishment cycle.

Software Technology

Exciting developments in software technology in recent years have made a huge difference to small-and-medium enterprises. Historically, as small businesses evolve, only an Enterprise Resource Planning (ERP) system could deliver data of the quality that allows businesses to optimise processes.

Now there are more and more tech startups delivering cloud-based SaaS solutions to SMEs. Applications such as Cin7, which capture sales data at the point of sale; Tradegecko which helps improve stock management; Albert which creates training lessons for sales staff on a daily basis, for example.

Another big positive of a modular approach is that it allows the step-by-step implementation of technology at a speed which is comfortable for both management and employees. As a business grows, the systems grow with it, continuing to accommodate its needs and requirements.

Due to the modern architecture and the prevalent way of thinking of the SaaS industry – where the customer is rigorously centre-stage – convenience and ease of use are other positive factors.

Integrated Accounting 

However powerful these tools are, their full benefit cannot be realised without a suitable and integrated accounting system in the background. Xero is an example of cloud-based accounting software that seamlessly integrates with many other cloud-based applications, a cost-effective solution which can be easily implemented. Incidentally, the library of bolt-on solutions for Xero enables even a small company to create its own ERP system with all its advantages. 

Strong Management

Finally, data analysis, information-driven decision-making and setting up effective processes requires a strong management team. 

Most small and mid-sized business may not have a full-time in-house CFO for various reasons, among them a lack of budget. For those companies, the solution is to engage an external resource on a project or part-time basis. 


In conclusion, smaller retailers can more than compensate for the lack of scale when playing on their strengths and using technology to their advantage to level the playing field.

Stephan Hablutzel is Chief Operating Officer at Fresh Accounting Ltd. Prior to starting with Fresh Accounting Stephan has for over 25 years resided and worked in Hong Kong and Singapore in regional roles as CFO and COO from startups in LegalTech to multinational groups in the fashion and lifestyle industry. He held numerous directorships and sat on various Board of Management. Besides finance related expertise, he brings in-depth experience in legal and international tax matters, corporate governance, restructuring and project management. Stephan holds a degree in Economics from the University of St. Gallen in Switzerland and holds the rank of a captain in the Swiss army.


This article does not constitute legal advice.

The opinions expressed in the column above represent the author’s own.

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READ MORE FROM STEPHAN HABLUTZEL: The Modern CFO in a Medium Sized Company

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