09/24/2013 05:27 pm ET Updated Nov 24, 2013

5 Ways Your Small Business Can Compete with Amazon During the Holiday Season

Let's face it - when it comes to 800 pound gorillas, Amazon is the King Kong of online shopping. The company has millions of dollars, millions of products and a staff that's the size of a city. They're by far the biggest player in the online market, essentially making them a full-on ecommerce empire.

So as the holiday shopping season approaches, how can you, the hard-working small business owner, possibly compete with Amazon?

Fortunately, you have more power than you think - here's how to get started:

1. Establish and reinforce brand loyalty, now
Amazon shoppers care about one thing: price. This means that there's no brand loyalty to Amazon itself, which presents a grand opportunity for you to swoop in. But to ensure that your biggest fans buy from you on these busy selling days, you need to establish and reinforce brand connections now.

For new customers, you can establish positive brand associations by personalizing the experience - get them into a loyalty program, try including hand-written 'thank you' notes in their orders, personalize all email transactions, and try making product recommendations based on previous purchases.

For existing customers, remind them that you're still around and that they should come back. Start by sending out reminder emails that include company updates, special offers and discounts, or just a general "thanks for being a customer email" so that you're top of mind come the busy holiday season.

2. Showcase your smallness
Instead of trying to be something you're not, embrace being small and proudly tell customers that you're an independent shop. Despite all of the attention Amazon is getting, there's a growing trend for shoppers wanting to purchase from local, smaller merchants - it gives them a sense of giving something back and the personal relationship you get too. This idea presents your business with a great opportunity over Amazon.

To help show off your small business status, give some of these ideas a try:

  • Tell your story via your "About Us" page, if appropriate, include photos of you and your immediate team
  • Add various logos and callouts to your website that identify any small business associations you're involved with
  • Outline your mission throughout your communications channels and highlight any non-profit organizations or charities that you support

People like to help other people - so help them help you by touting your small business credentials.

3. Strategically plan your holiday email sends
Waiting until Black Friday to send a promotional email is a surefire way to get lost in the clutter of a customer's inbox and lose potential sales to Amazon. Instead, it's important that you start leveraging holiday email messages earlier than you might expect. In fact, most big brand retailers, including Amazon, begin their holiday email campaigns in mid-October, with the intent of "planting the seed" to remind customers of their brand before holiday shopping begins. You can do the same by messaging your email contacts sooner rather than later.

You should also send emails more often during the holidays so your messages consistently appear in customer inboxes. Of course, you don't want to increase your email frequency so that your messages are seen as annoying, but most retailers increase their email sends by almost 50% during the holidays, and you can do the same.

Finally, focus on your email subject lines, highlighting specific promotions and discounts. For big shopping holidays like Black Friday and Cyber Monday, try something punchy, such as:

  • Black Friday Special! Get 30% Off All Items
  • Black Friday Savings + Free Shipping
  • Up to 50% off Cyber Monday Shoe Sale
  • ONE-HOUR SPECIAL! Cyber Monday Deals

Following these tips will help boost your email success rates, along with visits to your website and actual sales - and that's always a good thing.

4. Upsell customers with incentives and discounts
Like it or not, customers demand and expect discounts during the holiday season, especially when shopping online. And with the amount of power Amazon has, they can easily provide enticing deals. This means that your small business will have to join the discount dance, all while working to upsell customers to increase average order value. In other words, to help boost sales and profits, it's your job to strategically use discounts that make shoppers spend more, not less.

Here are some popular ideas to consider:

  • Offer free shipping over a certain dollar amount, such as "Free shipping with a $75 purchase"
  • Add a free gift card to a purchase, for example, "Spend $100 for a $10 gift card"
  • Provide discounts only with a minimum dollar amount, like "Get 10% off a $50+ purchase"

Regardless of what you decide, don't ever arbitrarily set discounts. Not only is this bad business principle, you'll be at risk for leaving a lot of money on the table.

5. Try flash sales
With the amount of products and customers that Amazon has, they're not nearly as flexible as your small business. You can leverage this advantage by launching flash sales on your website. For example, if you wanted to make a big splash on Black Friday, you could run a one-hour sale with a deep discount on your most popular items. Or, you could try running a special where the first 20 shoppers to purchase receive a large discount, the next 20 get a smaller discount, and so on. This type of deal keeps customers excited about your business, making them pay more attention to your email and social media communications.

When it comes to selling online this holiday season, it's naïve to think that Amazon isn't a big competitor, no matter what you're selling. But with these tips and solid preparation, you can do more than just compete with Amazon - you can help take down the 800 pound gorilla.