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Published March 15th 2012

Conversation: Social Media Allows Small Businesses to Compete with the Big Boys

This article is about a series of conversations sponsored by Brandwatch, covering all facets of social media. To see a full list of the conversations that have taken place, click here for our archive.

Time and time again, consumers have overwhelmingly stated a preference for shopping at independent retailers, yet have voted precisely the opposite with their wallets.

We’ve seen protests and dissent at chain supermarkets opening in regional towns, and fierce verbal defence of family businesses and small shops.

However, these big brands are succeeding, and the economies of scale that are afforded to companies like Walmart and Tesco mean that customers are able to get a wider range for less money, as well as added benefits such as heavy promotions and loyalty schemes.

Just how do smaller businesses compete? Well, Andres Mendoza of Boutique Loyalty thinks he has the solution.

Neil Glassman of WhizBangPowWow has taken the time to discuss Mendoza’s idea, and he finds out just how he plans to tackle the problem.

Mendoza, like Alex Adelman, is a winner of Intel’s Innovators programme for his idea to unite small retailers together.

He thinks that by pooling all of their resources together, they will be able to compete and truly offer a more legitimate threat to the big chains.

A universal loyalty system will make small businesses more appealing for repeat customers: not just of the same store, but of the same type of store.

His proposal is a smartphone app, which potentially offers consumers the opportunity to find and locate suitable stores and get rewarded for shopping there.

Mendoza’s idea sprang from a business trip to Indianapolis, where he was unable to find a local store, as he was seeking somewhere to shop that offered something a little different to the nationwide options, and a place with that extra special personal service that he believes only smaller stores provide.

He’s a still long way off from launch – the app isn’t expected until late 2012 at the earliest – and the revenue model is yet to be decided, but it is likely that the plan will be to charge the retailers for the privilege, rather than the consumers.

Mendoza elaborates on these points, and discusses plenty more in the conversation, including his what his success metrics will be, how it differentiates from existing apps like FourSquare and why people will be so keen on using it.

Click here to listen to the conversation in full

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