How do I win when Amazon is my competitor?Lindsay Says
You cannot “out-Amazon” Amazon.
When the customer’s purchase decision hinges on mere price, Amazon will win. Do not play that game.
So what is a company to do when Amazon is their competitor?
This question is what prompts many of the brand strategies my clients invite me to create with them. Brand strategy’s very purpose is to articulate the positioning choice that will enable a business to win. To work, your positioning choice must be both meaningful to your customer and differentiated from your competition.
Although a formidable competitor, Amazon’s very scale can limit its resonance. The goal of your brand strategy is to find a way into the customer’s life that renders irrelevant Amazon’s strengths.
Only compete where you hold the right to win. Only compete on something other than price.
There is more to value than low price.
Any business deserves to exist only insofar as it brings value to customers. Your business must bring value. Fortunately for those of us who are not Amazon, value goes beyond price.
In Forging an Ironclad Brand, I share this formula:
Value = Benefit - Price
Using this formula, we know that there are two ways to achieve a high value: low price, or large benefit. Amazon brings value primarily through its low prices. So to be different, you need to compete with your large benefit. Bring such a large benefit that even with your higher price, customers still gain a larger value through you than through Amazon.
Rather than lamenting that you can’t bring Amazon’s low-price-driven value, instead focus on the larger holistic value you can bring.
Consider the car category. Hyundai and Kia bring value through low price. They are akin to Amazon among their peers. And so every other car brand must bring value through something Hyundai and Kia cannot – a big, resonant, ownable benefit that motivates their particular target customer.
- Mercedes brings luxury. Mercedes vehicles are high in price, but Mercedes owners still believe they received a large value for their purchase, because the luxury benefit is so high.
- BMW brings driving performance. BMWs are expensive, but owners still feel they received a high value from the sublime driving experience.
- Subaru brings outdoorsy zing. While Subaru is pricey compared to peer car brands, Subaru customers feel they received huge value because driving a Subaru reinforces and reflects a progressive, caring identity.
When you cannot deliver the lowest price, the only other way to bring a large value is to bring a large customer benefit, as do these car brands.
How do you do that? By connecting with the customer’s heart, mind and soul.
1. Connect with the customer’s heart.
Amazon is transactional, functional, devoid of personality. The customer experiences no oxytocin hit during the shopping experience, as there is no interaction with anything even closely resembling a person.
So be as people-like as Amazon is un-people-like. Bring all your personality and humor and zeal to your customer’s experience. Lean into your unique voice and character. Enable your customers to feel the connection that we humans crave.
REI does this beautifully. I just searched “camping equipment” on both Amazon and on REI.com. One result screen is boring and may have been written by AI. The other is inspiring.
- “Find all the gear you need for camping & hiking, from tents, sleeping bags, backpacks and everything in between.”
- “Wander on purpose. For ramblin’ to roamin’, we've got the gear plus know-how for explorations far and wide.”
You know without my telling you which brand uses which language. One is robotic and bland. The other takes a stand. While not the lowest price option, REI brings me more holistic value than does Amazon, because of this oxytocin hit.
Another way to expand your benefit through the customer’s heart is by creating community. REI connects customers with fellow outdoor enthusiasts. Crane connects customers with fellow stationery aficionados. Crowd Cow connects customers with small farmers and their families.
What are the ways that your brand can connect with your customer’s heart? Where are the opportunities to let your personality shine? Where can you create customer community?
2. Connect with the customer’s mind.
Connecting with the customer’s mind may be the dimension where Amazon most shines. Our rational brains love Amazon’s low price and speed.
But, while Amazon will usually give the lowest price in the most narrow sense, Amazon does a poor job at bringing the rational benefits of curation and expertise.
Amazon is a generalist. It is the “Everything Store.” You are a specialist, so you can give customers an edited, curated experience, rather than spewing them with exhaustive options. And because you are NOT the Everything Store, your customer can benefit from your expertise.
Amazon’s very scale can lead to customer overwhelm and decision fatigue. In contrast, as a specialist brand, you know enough to select for customers a subset of offerings. This is rational value for your customer.
When I typed “sleeping bag” on Amazon, I received 4,000+ search results. When I typed “sleeping bag” on REI.com, I received 271 search results. I much prefer choosing amongst this smaller, curated selection. REI saved me emotional and cognitive energy through an edited choice set. Amazon could not – and would not – have curated like this.
When I received 4000+ results for my “sleeping bag” search on Amazon, I risked selecting the wrong sleeping bag, as I was my own guide through the onslaught of search results.
Going camping with the wrong sleeping bag is expensive, no matter how cheap that sleeping bag. The wrong purchase may waste my camping trip, my precious time. The wrong sleeping bag could even expose me to physical danger. All told, not a good deal no matter how low the price.
In contrast, on REI’s website or in their physical retail stores, I can learn from the live or online sales associates. I can benefit from their subject matter expertise of sleeping bags. I will buy the right sleeping bag.
Because Value = Benefit – Price, even with a higher price, I receive more value for my REI sleeping bag. The right sleeping bag makes me better off, even if I spent more for it.
How can you curate for your customer? How can you use your expertise to augment your customer’s value?
3. Connect with the customer’s soul.
Amazon is known for being cheap and expedient. It is not known for its soulful brand.
Notwithstanding Amazon’s stated mission to be earth’s most customer-centric company, it sure seems that their real purpose is merely to maximize shareholder value. And they are really good at that! For customers who are inspired by this purpose, you will have a hard time competing.
You, in contrast, are building your business because you care about something beyond profits. The happy news? Your “right customers” want that, too!
Your right customers are looking for something with soul. Something that captures their imaginations and touches them with meaning. For those people, you can let your purpose lead the customer interaction. REI does not merely sell me a sleeping bag. REI fans in me the flame to bond with the outdoors and protect this green earth. Everlane does not merely sell me a cotton t-shirt. Everlane engages me to care about the ethical manufacturing of clothing. The Honest Company does not merely sell personal care products. The Honest Company enlists me to join them in enabling a less chemical-laden life.
How can you connect with customers through your specific and soulful purpose?
Compete in a game you can win.
Avoid the trap of trying to out-Amazon Amazon. You simply cannot win at that game. To win, you will need to play a different game altogether by competing on something more brave than mere price.
Fortunately, value encompasses more than low price. And it is not in Amazon’s DNA to lean into those non-price elements of winning a customer’s heart, mind and soul. Use brand strategy as your tool to identify the position that will enable you to thrive despite Amazon’s might.