How To Compete Online Against Amazon, Or Should You?
One of the questions I am asked by readers, clients, and even by my friends and family is, how do ecommerce sites compete online against companies like Amazon?
Instead of listing all the ways I think a small business can compete online, I have decided to enlist the help of other ecommerce experts and ecommerce merchants who are successfully competing online.
The advice can be broken down into five categories. These categories are marketing, customer experience, the product, customer retention, and don’t compete. The last one seems counter intuitive but it will be explained in more detail.
Competing using Marketing
I’m not suggesting that you go out and compete by using as many marketing dollars as your budget will allow. The trick to competing here is using marketing techniques that giant retailers can’t (or will not) do.
Content marketing is an inexpensive way to both get site traffic, and differentiate your store against the big players. Amazon is not updating a blog or releasing educational videos, but you can. Amazon is big and focused on efficiency which is why content marketing is a great way to compete online.
Content for small business can come in the form of a blog, videos, infographics, guides, and resource centers. The key according to Chris Scully (CEO of vaped.ca) is to make sure you are educating.
Many shoppers are looking for the best product, not just the best price. Providing good educational information is a great way to compete online. I would definitely recommend adopting a content marketing strategy for any online business looking to gain traction. Just don’t expect it to work overnight, As Kate Proykova of Hop Online states:
While all content marketing can be effective (as long as it is of high quality) videos deserve a spot on their own. Videos are a great way to showcase products in a way that is interactive and informative. Big players like Amazon are not going to create educational/product videos for all their products. There is an entire subset of shoppers who are focused on educating themselves and making the right purchase. This is how you can compete against Amazon.
Videos are loved by both your customers and by search engines (for SEO). They give your customers a more involved way to learn about the product and its features, beyond a static feature set. As Brad Hines of Nerd Playthings states:
Competing Using Customer Experience
Not only does offering an excellent customer experience help you compete online, it can also increase your profits. Harris Interactive found that 9/10 Americans are willing to pay more to receive an exceptional customer experience.
Create a Personal Feel
If there is one thing that Amazon is absolutely not able to do it is creating a personal feel on their website. The site is too focused on efficiency to ever be able to create such a feeling. That is why Ryan Turner of 3PRIME thinks it is a great way to compete online.
Your online shop can do this by providing images of the founder and employees to generate a personal connection between the business your customers and your employees. Another way to do this is by telling the company story as part of the buying experience.
Focus on Customer Service
Trying to compete against Amazon with your product selection is a losing battle. Amazon has a ton of selection that smaller retailers will not be able to compete with. Instead smaller retailers can focus and compete online with customer service.
People don’t like to sit on the phone with a machine trying to get their questions answered or concerns resolved. This is where your smaller business can shine, by providing an amazing customer experience. Your customer service should be a real human to human interaction that is missing at Amazon and the corporate world in general.
As Andrew Guiyangco of Fashion Stork puts it:
Fashion Stork focuses on picking clothing articles that fit the individual needs of their customer. In a world of a million choices this is a welcomed change for their customers. They also use a social cause to further engage customer, donating a dollar of every sale to a sponsored adoption.
Establish a Connection
Customer connections are usually a product of great customer service and establishing a personal feel as stated above, but it is important to show how they can differentiate your store and help you compete online.
Customer connections are the personal relationships you establish with the customers of your site. These connections come from talking to and knowing your customers individual needs. This relationship allows you to create an experience that they wont find anywhere else.
Divya Pahwa of Now In Store makes an astute observation when she says:
Personal connections have been helping retailers compete against bigger competitors for decades. The difference is that these connections are now established in a fast moving online world. One way to get a connection started is with the next recommendation.
Use Live Chat
Live chat is a great way to make your site and support more responsive to your customers needs. A live chat tool allows you to answer questions and resolve concerns while the customer is still on your site (great for conversion rates). If a customer has a question or concern about your site it is important that you answer it quickly or they might go to a more recognized competitor like Amazon.
Live chat is especially important if you are targeting a younger demographic. Software Advice recently found the following about millennials and live chat.
Competing With Your Product
Amazon has a ton of product offerings, making competing based on catalog size almost impossible. Instead smaller retailers can compete using specialized products that shoppers won’t find on giant sites.
Find Your Niche
This is a topic that is covered in every business classroom and every startup/ecommerce blog out there. There is a reason it is such a publicized topic though, it works. Finding a subset of customers who are not being adequately served by existing options is one of the single best ways to compete online.
Often times servicing a niche will mean that you have to build your own products, or develop deals to be the sole distributer for your area. Tactics like these are more difficult, but are a competitive strategy that is much more defensible than simply trying to compete on price.
John Turner, CEO of UsersThink summarizes this strategy with a fantastic quote:
Create Confidence in Your Product
Many customers today are skeptical of buying online because they are afraid if something goes wrong it will be harder to resolve online than in-store. Many shoppers are realizing how easy it is to send something back to Amazon, which creates confidence.
It is important for smaller online businesses to establish customer confidence to compete with more established companies. There are a couple ways you can do this, one is with customer reviews. Reviews show the credibility of your site to shoppers, new shoppers want to see that previous shoppers had an enjoyable experience. This gives them the confidence to make a purchase.
Another way to create customer confidence is by guaranteeing your work. Which is how Thomas Brierton of Bryer Leather competes online.
Bryer’s commitment to quality and guarantee are establishing the customer confidence needed to compete online today.
Don’t Compete, Leverage
This is the answer that surprised me the most when I posed this question to ecommerce merchants. Many of the responses I got to my question were to not compete against Amazon but leverage them to compete.
There were many examples of how to leverage Amazon as part of your ecommerce strategy, but below are some of my favorites.
Amazon is helping Drew Martin CEO of MeCam establish credability for his products:
I had never thought of Amazon in this way, but it is true. If a shopper sees that your products are also listed on Amazon it establishes credibility. It proves that you indeed have a product and are not just trying to capture credit card information.
Samantha Van Vleet of Cassava Shop has found that Amazon helps her increase visibility for her own brand of products.
Amazon can increase the exposure your own brand of products receives. You can get a sale through Amazon, increase your brand’s recognition, and hopefully get them to buy directly from your site the next time. This works if you have your own brand or custom product, it is much harder to get customers to choose your site after if you are selling a readily available product.
Develop Your Brand
According to Craig Olsen of Nut Kreations, the key to competing against Amazon is through coopetition.
Craig believes that listing your products on Amazon is good way to develop your brand while getting sales. While Nut Kreations does list their products on Amazon, all marketing messages direct shoppers to their site rather than to Amazon. This is why Craig refers to his approach as coopetition.
Competing With Customer Retention
The piece would not be complete with out me getting my two cents in about how to compete online. I believe one of the best ways to compete against Amazon is with a customer retention strategy. Competing for customers is tough, but once you have got them to shop once you can get them coming back again and again with retention.
One of the most effective customer retention tools is a loyalty program. Compete online by spending less on lead acquisition, and getting more profitability out of each customer. Just click the button below to become an expert on customer retention for yourself.