How can smaller brands and retailers compete online when there are much larger companies, such as Amazon, which dominate the market? At its June Founders Breakfast, Women Innovate Mobile partnered with Third Wave Fashion to tackle this question with insight from panelists Tanya Omeze, E-Commerce Director of Marketing & Business Development at Verizon Wireless; Deborah Jackson, Founder and CEO of Plum Alley; Liza Kindred, Founder at Third Wave Fashion; and John Burbank, President of Nielson Strategic Initiatives.
The panel, moderated by Veronika Sonsev, CEO of InSparq and co-founder of WIM discussed how inspiration-based commerce can be used to get consumers to buy things they didn’t even know they wanted…that is, if it’s done the right way. Of course, there were different takes on what that most effective business model is for a company trying to make it in e-commerce, but one point was continuously mentioned-the importance for companies to connect with its customers socially.
Although Amazon does very well, it does not connect with its customers on a social level. Liza explained, “for many of us, we’re not going online to make need based purchases, we’re buying things because we want them. A lot of times when consumers go online they’re looking to be inspired. Inspiration is a service we’re providing to consumers, because we’re allowing them to explore a different personality, or to learn something about the designer or the manufacturer.”
Liza described how she is shocked that Amazon has not caught up with providing customers with the editorial point of view. “I cannot believe, that when you go to Amazon’s website there could be a page that says, ‘nautical stripes for summer’…and then when I click on it, all I get is a search results page of anything nautically striped…I can drill it down by trend, but I’m not actually being inspired, I’m not being given a point of view, and I’m not being given information about who the designers and manufacturers are. I think that’s something Amazon is trying to do, but something they’re not doing at all.”
Tanya suggested that smaller companies spend time studying Amazon and asking themselves how they can curate better than Amazon and how they can deliver a more customized experience in a particular category. John then asked the audience who in the room had heard of Fab.com? Almost every person in the room raised they’re hand. “In just about a year, a startup retailer can get everybody in this room to know who they are…there are plenty of opportunities in the retailing space, despite the dominance of Amazon to create a unique personality, to use technology and merchandising to create a brand that’s really meaningful for consumers. I think the first lesson is to not be afraid, and the second lesson is to really know what your brand is all about, to be authentic and to find a way to connect with consumers.”
Liza mentioned however, that smaller companies should be weary because they can be taken advantage of if larger companies like Amazon turn them into showrooms. “It’s about providing that inspiration but also being technically proficient and proficient in our delivery mechanism so we can compete.” Deborah provided an alternative point of view in terms of competing with a giant like Amazon. “You look at Amazon, but you don’t try and compete with them. What they do is extraordinary-they offer discounts because they do such volume and as an early stage startup company you aren’t going to be able to do that. You need to look at what Amazon is doing, and say what’s the gap in the market, what can I provide that consumers want and do that over here?”
Deborah added, “so much of what we do at Plum Alley is not just telling the inspirational story, but actually helping consumers understand the value of that product. How it’s made, what’s behind it, and I think of that like going to an art gallery and seeing a painting or a sculptor and thinking that’s really great, but when you meet the artist and hear their vision, what went into creating that work, you really then begin to appreciate the value of the product, and the value of a product is not necessarily reflected in the price.”
Veronika then asked the panel to dig into successful business models, best practices for customer loyalty, and innovations in technology that can lead to greater profit for online commerce. Liza provided a list of ten models including algorithmic, content and commerce, marketplace, discovery, preorder, sharing, showroom, subscription, and virtual closets. Although Liza provided us with a multitude of models, John explained the one reason he believes it’s easier to get out there and get attention than it was five years ago and that’s because of social networking. Involved in ecommerce since the early 1990s, John explained how technology has evolved. “There aren’t really any new ideas. Things are more successful today because the connection is faster, and the search engines are better. You can even talk into your phone and say something to it. If you think about mobile, it’s no longer 3G, we’re at 4G LTE. All these things allow products and services to be in your pocket all the time, with beautiful imagery that opens up a platform that didn’t exist back in the ‘90s and I think opens up great opportunities. “
Liza and Tanya highlighted when companies such as Birchbox personalize their items it makes a huge difference. “I’ve never gotten a hand written card from Amazon.” Tanya also brought up Blue Apron. “These are two companies that did a brilliant job of building loyalty into their business model. For example, Blue Apron delivers ingredients for recipes that are ready to have in less than thirty minutes, at a reasonable cost.” Deborah then reminded us of the two very different experiences you can have as a consumer. “I think of the shopping experience online as very similar to shopping in real life. You have Macy’s but you also have Madison Avenue where you can go into a smaller boutique, get personal attention, and find designers that aren’t in a big store like Macy’s.” Deborah stressed that if an early stage company is going to do ecommerce, it has to keep its distance from Amazon because it just can’t compete. “You have to have products that are special and unique. Do the leg work of finding those unique products, and then present them in a very unique way.”
This post was created by Raine Dalton, WIM’s editorial and community innovation intern. Raine is passionate about finding creative ways to empower women globally through tech. In addition to WIM, Raine has written, tweeted, and posted for the Global Banking Alliance for Women, WITNESS, and 90.7 WFUV News. You can find her work at www.rainedalton.com or get in touch with her through Twitter @rainedalton, or by emailing raine@wim.co.