Technology Ought to Help, Not Hurt Small Businesses

Why Mom-and-Pop shops have been in danger long before the pandemic

Brick-and-mortar small businesses are in danger. 

Since the beginning of the COVID-19 pandemic, over 100,000 small businesses in the United States have shut their doors down, many for good. This isn’t an isolated occurrence: traditional small businesses have already been in danger. The significant rise of Big Tech and Big Business threatened small businesses long before the stay-at-home orders and loss of foot traffic caused by the pandemic. 

Every other week, there’s a GoFundMe or Instagram campaign for neighbors to rally behind their beloved stores in hopes of giving them the lifeline they need to survive. While effective, these campaigns are not sustainable, nor are they available to all small businesses. 

Traditional competitors like Target, Zara and Starbucks have name-recognition and complex supply chain operations that make it difficult for any small business to compete via Product Leadership. The rise of e-commerce behemoths such as Amazon—along with the democratization of e-commerce technology with the likes of Depop and Shopify—has saturated the market with cheaper alternatives, further disadvantaging small businesses.

The common thread is the rise of technology wiping out any small businesses that are unable to adapt in the age of tech. There are a plethora of companies out there assisting small businesses with tech adoption. Doordash, UberEats, Groupon, Instagram and Yelp are examples of B2B2C companies developing technology to level the playing field. 

Unfortunately, these companies prioritize their own profits over that of neighborhood small businesses. They pit businesses against each other, auctioning off app real estate to the highest bidder, which benefits large players in the field that have an abundance of capital and knowledge of the algorithm. This makes advertising inaccessible for many small businesses, even if it could be an integral part of their success. They also charge exorbitant fees to increase their own margins, forcing already-struggling small businesses to take the hit. 

To be clear, this is not an attack on small businesses that have found a niche and have been able to thrive amidst steep competition. I only fear a future where mom and pop stores in our neighborhoods have been replaced with monotonous ones that prioritize profits instead of the stakeholders in the neighborhood. 

Not all hope is lost, however. There are some qualities that e-commerce and big-box stores will never be able to replicate. Small businesses are essential because they provide unique customer experiences. They invest in and give back to their communities. They give neighborhoods character. These are the qualities that can never be replaced. 

That said, small businesses are seldom able to focus on these qualities, because when margins narrow they are forced to focus on profits if they want to stay open. 

The future of Small Business Technology lies in aligning these characteristics.  Businesses shouldn’t need to choose profits over benefiting their community because building a community-minded business should be profitable. Technology rigidly defines how businesses can be successful, attain five-star ratings, and spend the most on marketing. 

A reimagining of how technology serves small businesses is allowing small businesses to compete at what they do best. A reimagination of how technology serves small businesses could involve showcasing a business’s neighborhood-wide initiatives, touching customer testimonials, and the unique story and mission of a small business. This allows small businesses to compete on their terms, allowing them to do what they do best.  

Furthermore, technology companies can’t have a winner-takes-all approach with their offerings. A technology company that cannot sustain profit without extorting or exploiting small businesses is one that should not be created in the first place. Small businesses can’t fight back big-tech alone. It’s up to us as consumers to consciously vet companies that claim to support small businesses and to boycott and punish companies that use exploitative practices. 

This is a challenging problem, but one that must be solved if we value what small businesses do for our local communities. We need radical change among existing small business-serving tech companies. We need to prioritize social impact, not profits. This change must occur within the likes of Doordash, Google and Yelp, or we risk losing the small businesses that hold our community together. If not, we need to welcome in new players with more innovative and creative approaches that put small businesses first. 

In the meantime, let's do what we can to support small businesses by going out of our way to shop small.