Competing With Amazon: It’s All About Trust
Amazon.com is big. Powerful, too. The vision of Founder and CEO Jeff Bezos is remarkable. It's astounding to consider Amazon’s ascension began just 26 years ago in 1994. While I don’t always agree with Amazon’s practices, I have a great deal of respect for Mr. Bezos as an entrepreneur, a visionary, and for the brand he has built. Amazon is a tough competitor. Competing against Amazon isn't impossible, however, if you understand its vulnerabilities.
It’s no secret that direct marketers maintain a love-hate relationship with Amazon. Many of you have used and/or are using Amazon today. If you can’t beat ’em, join ’em, right? I think you can win against Amazon without drinking the Kool-Aid, though. To do so, you must look for its weaknesses, strive for consistent performance in your organization every day, and finally: take care of your customers.
The Erosion of Trust
I started noticing a change early in the pandemic. Amazon began reserving inventory of hand cleaners and other sanitary products for healthcare providers. As a trained volunteer firefighter and emergency medical responder in Delaware, I very much understand the importance of taking care of first responders. What I don’t understand is that, with its vast global buying capabilities, why Amazon couldn’t set aside some inventory for everyday consumers who are also trying to keep themselves and their families safe. That's not how you take care of your customers.
I also noticed Amazon was missing delivery dates. It promised two-day delivery, but didn’t meet that promise. We’ve all had to deal with postal delays in Q3, but there have been instances when Amazon's website showed that something I ordered was “out for delivery,” yet it wasn’t.
The lesson here: Do what you say you're going to do, and do it well. Exceed the customer’s expectations. It's sort of like being 15 minutes early for an appointment vs. five minutes late. Amazon is a phenomenal sales channel, but is it great at fulfillment? I used to think so, but I'm not so sure today. I no longer have confidence in the delivery dates Amazon quotes.
There's now a major lack of credibility with regard to Amazon product reviews. According to Mike Prospero at Tom’s Guide (September 17, 2018), “Amazon’s product pages are infested with hundreds and sometimes thousands of deceptive reviews, and the schemes are getting so sophisticated that the retailer can’t keep up.”
In an article titled, “Technobabble: Can Amazon Product Reviews be Trusted,” Jason Ogaard reported on Sept. 16 that Amazon deleted 20,000 reviews from its site after it was brought to light that several reviewers were likely receiving free products in return for reviews. This is another trust factor. If you can’t believe the credibility of its reviews, it doesn't instill confidence in purchasing from Amazon.
Fake products have also become all too common on Amazon. One reason for this is because most of the products sold on the marketplace are not sold by Amazon, but rather third-party sellers. Most resellers can be trusted; however, some cannot. Fake products are far too prevalent on Amazon. The cold reality is that Amazon has grown so big that it's becoming increasing difficult for it to police every aspect of its site. Ganda Suthivarakom of The New York Times reported on Feb. 11 that big brands such as Birkenstock and Nike have completely stepped away from Amazon because of the deluge of counterfeiters.
I used to think Amazon had the best prices. Not anymore. There have been several items that I've competitively priced. I found the same items on other sites were priced equal to or less than Amazon. Don’t just assume the best price will come from Amazon; you might be surprised.
I'm careful what I order from Amazon. Unless the item is sold by and shipped from Amazon, I generally won’t order. In fact, I search the internet to see if I can find the items somewhere else.
Looking the Giant in the Eye
Providing unique and proprietary merchandise along with phenomenal customer service are two of the best ways to grow a business and to compete against giants like Amazon. There's no substitute for personal, friendly customer service representatives. A focus on customer service provides an opportunity to increase customer loyalty by maximizing customer satisfaction. This is one area that can set your brand apart from Amazon and other competitors.
Is the bloom off the rose? It's my opinion that Amazon is no longer new, fresh or exciting. Has it lost the dominance it earned over the years? Other giants like Walmart are coming after Amazon hard. I also believe that specialty catalogs and online retailers can carve a niche for themselves.
To me, the most important factor in the shopping experience is trust. Once you lose trust, it's extremely difficult to get it back. My trust and confidence in Amazon have been shaken for the reasons listed above. Now I try to find the merchandise I'm looking for from other e-commerce retailers, even if it costs a little more.
And I’m not alone.
Stephen R. Lett is the founder and chairman of Lett Direct, Inc., a catalog consulting firm specializing in circulation planning, forecasting, digital marketing and analysis since 1995.
Steve Lett graduated from Indiana University in 1970 and immediately began his 50-year career in Direct Marketing; mainly catalogs.
Steve spent the first 25 years of his career in executive level positions at both consumer and business-to-business companies. The next 25 years have been with Lett Direct, Inc., the company Steve founded in early 1995. Lett Direct, Inc., is a catalog and internet consulting firm specializing in circulation planning, plan execution, analysis and digital marketing (Google Premier Partner).
Steve has served on the Ethics Committee of the Direct Marketing Association (DMA) and on a number of company boards, both public and private. He served on the Board of the ACMA. He has been the subject of two Harvard Business School case studies. He is the author of a book, Strategic Catalog Marketing. Steve is a past Chairman of both the Catalog Council and Business Mail Council of the DMA. He spent a few years teaching Direct Marketing at Indiana University in Bloomington, Indiana.
You can contact Steve at email@example.com.