CNBC Business’ John Fort interviewed three tech industry influencers to see how online retailers and tech companies can avoid being squeezed out by the trillion dollar eCommerce Giant. Here’s a brief rundown of what they had to say.
Chegg began life as a textbook rental company, but shortly after going public learned that Amazon would also be entering the textbook rental market. Though this initially scared investors and affected the company’s stock valuation, CEO Dan Rosensweig explains how focussing on their own goals, rather than the competition, is what got them ahead:
“We said ‘we’re going to put the students first, we’re not going to worry about what Amazon or anybody else does. Let’s focus on our audience [and] their needs, let’s be more nimble, let’s be efficient .. let’s build a business model that recognises: if you’re in a commodity market, you’re going to lose to Amazon.”
After this, Chegg branched out from textbook rental into a full-service educational provider in the U.S. offering homework help, online tutoring, internship help and even scholarships. By growing the business into a truly unique niche, Chegg were able to remain competitive despite their initial business model being slowly consumed by Amazon.
Former amazon Insider Nadia Shouraboura says that this is the advice she gives to startups wanting to succeed when competing with Amazon. Since it’s almost impossible to compete on price, creating memorable, loyalty-building customer experiences is paramount.
“It’s all about creating this new experience, innovative experiences [which] supersede Amazon’s experience”
Shouraboura also argues that the popular conception of Amazon as a single behemoth is misguided, and it is worth remembering that Amazon is divided into many small, focussed teams, often working in near isolation, so a startup should not necessarily assume that they are leaner and more focussed than their Amazon counterparts.
Online motorcycle accessory retailer Revzilla focussed, rather like Chegg, on becoming a resource and knowledge centre by helping their customers get the best information to make an informed purchase, according to founder Anthony Bucci
“In answering questions to help someone to find a solution, to allow themselves to enjoy the riding, we ultimately began to [realise] ‘these are the things we hear all the time. These are real issues in the marketplace. Why aren’t some of the other competitors in the marketplace … answering these questions for the consumer”
As Revzilla grew and built a community, they scaled the informative content they produced, but always keep focus on in-depth customer feedback to ensure they could become an “indispensable resource” for their customers.