It’s not just Best Buy that’s suffering from the sharp increase in online sales. Many small and independent retailers fear online competition, as recent projections show online sales will continue to grow at a double-digit pace. After all, how can a retailer that has to maintain a physical storefront compete on price with a company like Amazon that relies on a web site and distribution centers?
For many small, independent retailers, lowering prices to compete with those on Amazon.com and other online-only retailers feels like a race to the bottom. Once you start discounting or continually putting items on “sale,” customers start to expect it. Retailers need to maintain a certain profit margin in order to make sure the business stays financially healthy—they can’t always afford to drop their prices 20 percent or 30 percent.
While independent local retailers do need to be aware of online pricing of their products, there are better ways they can compete with Amazon and other online-based competitors: More