This year at the 2018 Internet Retailer Conference + Exhibition (IRCE), I heard from many organizations that were concerned about Amazon. According to eMarketer, Amazon’s e-commerce sales are expected to grow 32 percent to $196.8 billion dollars in 2017 in the U.S., or 43.5 percent of total e-commerce sales. The fear was stronger than I’d experienced in quite some time and it’s about survival. Many independent companies are questioning their own ability to stay in business through the year 2020 – just 18 months from now.
At the various keynotes, I heard three main reasons that most ecommerce companies are struggling: (1) They are obsessed with the wrong metrics, (2) They are appealing to a broad and often undefined mass audience, and (3) They are afraid to fail. Conversely, I walked away with 10 viable strategies that any ecommerce company can leverage to effectively compete with Amazon – and win.
1) Forget Mass Appeal: Focus Deeply On Your Ideal Customer
According to IRCE’s keynote speaker, Seth Godin, the main problem most online retailers face is that companies are spending way too much time focusing on mass appeal and an amorphous “average consumer.” Simply put, it’s not possible to effectively design and sell products to everyone.
Instead, it’s important to understand who our ideal customer is, what they look like, how to attract them and give them what they need. We need to better understand and obsess about our best customers as well as quantify their lifetime value.
2) Seriously, Embrace Your Die-Hard Fans and Give Them Everything
What is universal is that consumers tend to go wherever it’s most convenient. That is, everything I can find in a physical retail store, I can find faster online. The trick is to create an experience that Amazon can’t replicate. The obsession around your customer’s needs must come first. Ask yourself these three questions: (1) Who are our die-hard fans? (2) What do they want most? And (3) How do we give them precisely what they want in the way that is most convenient for them?
3) Obsess Over The Holistic Customer Experience, Not Channel Performance
Customers do not think in terms of channels. Frankly, customers do not care about channels. What they care about is having great experiences. To continue to progress forward, we need to stop talking about ecommerce as a channel, individual storefronts as a channel, Amazon as a channel... and instead determine what experience we want our customers to have.
4) You MUST Be a Category of One, So Find Your Niche
The only long-term success strategy is establishing and maintaining a category of one. Otherwise, when all the products look average and the same, your customers’ ability to search by price will kill your brand. There has to be a reason why customers want to buy from you. Who are the customers that absolutely can’t live without you? Identify and serve the smallest viable market, because you can’t design an optimal experience for everyone.
5) Be Memorable Or Perish
Successful niche retailers are entertainers - create content that your best customer will love. Check out what this niche e-retailer of knives has done to attract over 200,000 subscribers on YouTube.
Unless a customer can remember why they bought from you specifically, you’re in trouble. So ask yourself, “How am I standing out and remaining memorable?” That means delivering something interesting and edgy, but at the end of the day, people still buy from other people (vs. faceless companies that are amorphous). Consider how you can bring this back into the DNA of your brand.
6) Avoid the Technology Trap: IT Will Rarely Be Your Differentiator
Technology is not your differentiator. Technology vendors make life easier and there is an abundance of them (and just about every aspect of technology can be replicated). As I walked the exhibit hall at IRCE there was so much of the same, which reinforced my belief that any person who has a product can begin selling direct-to-consumers in a matter of weeks. All of this technology allows companies to compete overnight, so it’s paramount that you focus on what you do best and leverage technology to amplify how you tell your story.
While at IRCE, we had a chance to chat with Matt Butlein, Chief Vision Officer at Nuts.com.
“We started 90 years ago as a single store in Newark, NJ and are passionate about keeping that corner store spirit alive. Our marketing technology vision is to create an imagination-enablement platform for our team to do just that. Today, we can create experiences across any channel from one place: A gift, a call, an email… anything our team dreams up. That’s how we’ll move past “personalization” to become truly personal.”Matt Butlein, Chief Vision Officer of Nuts.com
7) Focus on What You Do Best and Outsource The Rest
In January, Walmart began offering free, two-day shipping on more than two million items — a move that takes direct aim at Amazon Prime, whose members pay an annual fee for fast shipping and other services like movie streaming. It seems that one of the key messages of the IRCE conference was find niches where Amazon is not.
Take Bonobos, for example. I really like how the products are curated. Every time I buy from this site, they make me feel like a cool, hip guy. They know that I am one of their ideal customers and they create memorable experiences for me. You don’t need to reinvent all the end-to-end components, just the one that you do better than everyone else.
8) Be Willing To Ditch Old Technology That’s Outlived Its Usefulness
This should be obvious, but I’m often surprised at how many entrepreneurs trap themselves in old technology. Today, in just a few months (or less) you can have world-class technology infrastructure as good or better than what everyone else has. Be willing to let go of your previous investments if newer technology will create better, more engaging, customer experiences.
9) When Selling Direct-to-Consumer (DTC), Personalization Is Mandatory
Use personalization technology to more effectively deliver your content and key message. Stay attractive to your ideal customers, by using dynamic pricing, personalization, and machine learning. This will allow you to deliver meaningful messages at the right time to deepen customer relationships and retention. This is the only way to survive.
10) If Failure Is Not An Option, Then Neither Is Success
I can’t stress this enough: perfection is an illusion. The path to success requires sacrifices in the form of mistakes and failures. Only those who are willing to risk failure will discover the best possible ways to deliver breakthrough customer experiences and compete effectively.