Competing or completing?
Holly and Justin Rutt and their Ann Arbor-based soap-making business sit at the crossroads of two critical shopping trends.
On one hand, consumers want locally-made products with a healthier, artisanal vibe. On the other hand, consumers want the convenience of shopping online and having products delivered. Amazon’s proposed acquisition of Whole Foods just put this convergence front and center.
The Rutts, who create soaps and salves as The Little Flower Soap Co., sell their wares on Amazon’s hand-crafted marketplace, Amazon Handmade. The recent successes of Amazon Handmade–and the reasons why consumers are embracing the platform –offer insight into how large retailers are finding ways to give consumers all the things that they want, even if all those desires seem in opposition to each other.
“It makes complete sense to me that we want the convenience of shopping online and not having to fight traffic and parking to get our gifts, but we also still crave that connectivity,” says Holly Rutt, whose shop has been featured in Martha Stewart Living and County Living magazine. “We want the best of both worlds. We want the small town feel of knowing where our products come from but the ability to save time while buying what we want.”
Amazon, which connected GenPop and the Rutts, considers the husband and wife team an ideal example of what the retailer is trying to accomplish by combining a local-ish shopping experience with rapid delivery times.
Not just small, and not just local
Big companies are scrambling for local, innovative delivery platforms. Beyond the Amazon-Whole Foods deal, Walmart’s 2016 purchase of Jet.com and current offers for customized clothing retailer Bonobos and Unilever’s Dollar Shave Club acquisition are more examples of big business going local and rapidly deliverable. Consumers are looking for custom, or locally-crafted wares, yet have no problem buying such wares online from big companies. In fact, research from the Ipsos Global Trends Survey found that worldwide, some 59% of consumers would pay more for locally produced brands, a number which is up from the 45% who felt the same way the year prior. In terms of food items, 67% of consumers report that they are more likely to buy locally grown items. Meanwhile, the same study found that a majority find it easier and preferable to buy online.
Moving the shop-local world online doesn’t just expand the potential market for the Little Flower Soap Co. others. It can reveal new customer bases for both the big and the little guys.
“On Etsy most of my customers have been women,” explains Holly. “This is a whole new market I broke into: guys who need gifts or guys who need soap.” They created 50 Valentine’s Day boxes and sent them to fulfillment by Amazon, which enables a Prime delivery, to see if anyone would purchase them. They sold out.”
Conversely, the Rutts are bringing more buyers to Amazon, improving Amazon’s image as a friend to small business. Many of those buyers will stick around and shop Amazon Prime, or join the Amazon Kindle family or sign up for diaper or toy or clothing delivery. It all works together.
The Rutts entered the Amazon marketplace last November, after having signed up for it months earlier in the hopes that the online retailer would create a selling category for handmade. Eventually they did, and they called her.
“I thought from my experience on Etsy, which is my closest comparison to a larger online handmade retailer, I thought I would like list my items and it would be crickets for a while because on Etsy it took a while to build up steam,” says Holly. “On Amazon as soon as I listed my first listing? Within two days I made my first sale.”
Between November 2016 and December 2016 the Ann Arbor-based retailer sold 2,797 units for an average sale per item at $27.06. Essentially they sold $66,000 worth of product from Amazon Handmade alone. And most of those customers were people who appreciate dainty, pretty packaging, quality local ingredients and the feel of homemade.
Local yet online
When describing why shoppers are moving lots of units for the Little Flower Soap Co., a simple discussion about online buying habits is not quite accurate enough to explain the trend. Really, it’s more about buying mobile and using technology to buy local. Retailers of all shapes and sizes have something to offer a consumer, but in this case, the big box stores and malls suffer a bit because consumers want a shorter shopping commute, better customer service and immediate gratification with the purchase of an item.
That’s why the Valentine’s Day items sent to Amazon Prime sold so well for the Rutts. Prime ships items out the next day because they’re already in the warehouse versus the consumer who orders from the Rutts directly. Both ordering methods will get you a locally, handmade product, but Amazon Prime gets it to the consumer a bit faster. And Amazon Fresh, though not yet available in every city in the U.S., currently allows consumers in certain zip codes to more directly purchase fresh foods from nearby vendors.
Meanwhile, other big box retailers are playing into the shop local trend by opening up actual brick and mortar stores – again, as evidenced by Amazon which recently opened physical shops in New York and Chicago and will soon have 430 Whole Foods locations nationally.
Buying online is making the retail store market more competitive. Traffic is down into stores and when people go they’re buying less because they’re buying more online. Technology is the core driver of what’s changing retail.
Amazon hopped on the trend because it made good financial sense, says spokesman Andrea Ruge.
“I can tell you that we’re pleased with the feedback from customers so far and we’re seeing more and more customers shopping AmazonFresh every day,” says Ruge, adding that the local food additions are a main draw for customers, just like AmazonHandmade. “On AmazonFresh, customers can order from a range of local shops and restaurants in each region through the Local Market program. Examples include fresh fish from Pike Place Market in Seattle, artisanal cheeses from the Cheese Store of Beverly Hills, sweets from Brooklyn Cupcake in New York, and much more.”
Funny Ruge should mention artisanal cheeses sold in Beverly Hills. At the intersection of tech and the humans who use it is personalization. Buying cheese made by the farmer down the road or a sweater knit by a lady at the local crafts fair brings some homeyness to the shopping experience. Technology is what brings the best parts of the old and new worlds together. Amazon is investing big in this glo-cal opportunity – first through Local Market and very soon with Whole Foods – in ways that bring the farmers market into our living rooms and mobile devices.
