Girona’s empty commercial spaces
Yamaha la temporada 2019
04
Nowadays, we are facing a new phenomenon: large corporations and store chains are making family-owned business and small and medium enterprises disappear. The main differentiating factors that favour big multinationals against small shops are, among others, the following: the diversity of the products they offer, the price and quality ratio, the speed of delivering products and services, workers specialization, and larger and more sophisticated marketing campaigns and advertising strategies.
Another important factor is online sales. Lots of companies are selling products online since Internet is the future and what’s moving the world economy. People are increasingly buying online because it has become more convenient, besides, online platforms such as Amazon offer discounts and promotions that we can’t find at the store.
The well-known online webpage “PuroMarketing” confirms that the 63% of consumers prefer to buy products online from businesses that provide the opinion and recommendations of previous customers. According to PuroMarketing, this factor generates more trust and customers buy 11% more than in street shops.
Chain stores differentiate themselves from small shops by adapting themselves to the online factor, something small shops cannot do. They are actually winning the battle over small businesses and this phenomenon looks like it’s going to become the future of all companies if they want to survive.
Advertising increases a company’s long-term gains, but it also entails a short-term investment, and marketing budgets are not cheap. That’s the reason why big companies invest in advertising campaigns and in the massive media. They have huge advertising budgets that allow them to penetrate new markets without risking much. Small companies cannot afford that.
Moreover, small shops have a limited access to financing, they don’t have enough funds to invest in an effective campaign. They can´t neither advertise in the mainstream media, such as TV, because they can´t risk their earnings in a marketing campaign. Therefore, they are forced to select more economic means of communication, which in turn may not be so effective when the goal is to penetrate a new market. It’s necessary a previous study to see which local media are the best for them, and this seems to be an obstacle due to their lack of funds.
As a conclusion due to the existence of better alternatives for the consumer (online sales, large companies in the same sector, establishments that have a wide range of products / services, etc.), small businesses are losing popularity and, over time, closing down.