Executives lose sleep on a nightly basis, worrying about Amazon coming to put them out of business.
Amazon has permeated all major industries, and while most know the company for its retail site, it has achieved success in groceries, TV and film, robotics, cloud services, and consumer electronics.
The world has changed considerably as Amazon has evolved from a fledgling online bookstore to a behemoth with toeholds in every sector. To survive in Amazon’s “New World Order,” young companies must change their approach.
Here are five ways your company can thrive in the current landscape.
1. Keep It Simple
Consumers often find themselves overwhelmed by the sheer number of products available on Amazon. Young companies would do well to start with a narrow product portfolio—this will help them help cut through the noise and get people’s attention.
Keeping it simple will allow your company to brand its products as “the best.” This strategy is a virtual call to action, cementing the idea that the lesser alternatives on Amazon simply will not suffice.
In an Amazon world, many digital brands have already disrupted legacy industries by selling a limited collection of products. Many started out with just one. Casper began by selling what it claimed to be the perfect bed. Bonobos started with a single pair of men’s pants. Harry’s launched with one type of razor. You get the picture.
2. Leverage Your Agility
Keeping a narrow product portfolio makes a young company much more agile in continuous product refinement and improvement. The company can pivot right back to the drawing board as it gets feedback from early adopters.
As it stays on this trajectory, the company can avoid burning inventory and eating sunk costs. It can continue making tweaks to the product and releasing upgraded versions.
In simple terms, a young company can leverage its small size and this near-real-time feedback to its advantage. With a level of transparency that a bigger, more sluggish competitor might not have, newer companies can make course corrections at top speed.
And while Amazon may offer a greater breadth of products, the unparalleled depth of a single—or at most a few—products will help a young company stand out.
3. Have Your Voice & Values Heard
Now more than ever, consumers care about what your brand stands for—that is, what it means to wear or use your product.
Basically, they care about how your product will affect what others think of them. This element resonates on a much deeper level than the broad-based repository of products featured on Amazon.
Brands like Cotopaxi, Nisolo, and Reformation have amassed a loyal following because they convey powerful messages. They stand for a level of awareness in giving back to communities, and in empowering the workers in developing countries who helped make their brands possible.
These brands also signal a level of compassion for ecosystems and environments. This makes a consumer feel good about themselves, and creates a level of stickiness and retention that surpasses what can be achieved by the latest Amazon “best seller.”
In short, consumers seek out brands with a clear message because they allow individuals to differentiate themselves. As a result, these companies are enjoying lower CACs and churn than their much larger competitors with vast marketing budgets.
4. Make Life Easier
Consumers appreciate companies that make their lives easier. They don’t like brands that disrupt their habits, but instead prefer companies that facilitate them. This is one of the reasons why Amazon has been so successful: It has made virtually every product and service imaginable available at the consumer’s fingertips.
What I mean here is that consumers no longer need to get up off the couch to buy toothpaste, produce, or even financial services. Talk about enhancing your daily routine!
Young companies and digital brands have gained significant traction with consumers in this way. Through ingenious design, Casper made buying, trying out, and even returning a mattress a convenient and risk-free experience. Warby Parker made it fashionable to measure your own prescription and buy glasses from home. Brilliant Bikes has taken the legwork out of buying a bicycle, and promises (free) next-day delivery in some markets. Glossier now saves you the guesswork in finding makeup that matches your skin tone.
These brands understand the importance of simplifying consumers’ lives.
5. Don’t Forget the Data
One of Amazon’s key advantages is its data. The company is obsessed with understanding its customers—and as a result, consumers view it as cheap, convenient, and reliable. Nimble young companies should take note, and utilize their own data to please customers and continually improve their products.
Reformation does this well. In its tech-driven stores, the company captures data on how long customers try on particular items, and which pieces convert the most from dressing room to purchase.
Meanwhile, Zesty uses its data volumes and proprietary algorithms to refine how clients are eating, better plan its menus, and optimize logistics.
Harry’s cultivated 100,000 potential customers at launch by rewarding email sign-ups and influencers as a feedback and product improvement mechanism. And Brooklinen employs a robust email marketing program that targets customers based on where they found the brand and what products they purchased.
To succeed, disruptive brands must use their agility, speed, and data as an advantage. Data affords young companies real-time transparency into consumer behavior, which leads to more efficient marketing spend and greater retention—much more favorable unit economics than these brands’ larger competitors.
And the pinpoint precision, improved products, and tailored experiences young digital brands create? They simply cannot be found on Amazon.