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Unprepared Ep 62 - How to Get an Edge Over Amazon with Dave Cherry

Timestamps

  • [00:00] - Sponsor: Rewind
  • [00:40] - Intro
  • [01:25] - What Amazon can’t do
  • [02:55] - Edge #1: Knowledge about your product
  • [04:30] - Edge #2: Affinity with customers
  • [06:03] - Drivers of customer satisfaction
  • [07:02] - Small brands’ advantage over Amazon
  • [08:15] - Outdo your service
  • [11:05] - Where to find Dave

Resources

Key Points

  • Amazon and other big companies can often beat SMEs on data, analytics, price, and more. 
  • Amazon has billions of different products, but their customer service is not an expert on these products. They are competing on price and quality, not service. 
  • Convenience is a great driver for customer satisfaction which Amazon/big brands are taking advantage of. 
  • Smaller businesses or brick-and-mortar stores can take advantage of their knowledge and intimacy about products and relationships with customers.
  • Brands can talk to smaller brands about their products. For instance, if the customer is interested in sustainable products, you can go into detail about explaining what it is about, why you started the brand, and so forth. 
  • This creates a closer relationship with the customer because smaller brands are most likely passionate about their product. They also have expertise/knowledge about it.
  • Meanwhile, bigger brands have the same products but customers don't have anyone to ask questions.
  • Small brands can give tips and have an affinity with your customer. Even sales clerks at physical stores can give tips and recommendations. 
  • But when someone is buying a product that is more personal to them, that's where the relationship with a customer comes in. 
  • Building a good relationship with the customer creates loyalty. If there's another store similar to Amazon that provides the same convenience, most customers will try it out. 
  • However, if brands focus on the relationship and not transaction or commoditization, they can have an edge. 
  • Whether we say relationship or experience, you are connecting with a person. At some point, there is a relationship there where you care for them, not just for transactions.

Transcript

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Chase Clymer  

Hey, everybody, welcome to another episode of Unprepared. This one is definitely going by its namesake. Dave and I spoke before, came up with an awesome idea here and we're gonna roll with it. 

So today, welcome to the show, Dave Cherry from Cherry Advisory. How are you doing?

Dave Cherry  

I'm doing great Chase and I am completely Unprepared. Which is, ironically, meaning I'm prepared for this conversation.

Chase Clymer  

Yeah, it's what it's going to do. So what we settled on today in what we want to explore is something that, actually I'm seeing a lot of it currently. A lot of people reaching out to the agency and questions about Honest Ecommerce, and all that. 

Kind of like how do I have an edge over Amazon? And Dave and I are going to kind of tackle that real quick. So with that, Dave, the floor is yours.

Dave Cherry  

Yeah, well, let me start off. First off, Chase again, thanks for having me, and always great catching up with you and talking. 

But what I want to think about is, and this can be applicable whether you're a small brand or designer just starting off with a small Ecommerce only shop. This applies if you have brick-and-mortar stores. Even if you have several hundred brick-and-mortar stores. You can be a big retailer like we have locally here in Columbus. 

The question is always, you know, we've got this big giant in play called Amazon. And they can beat us on their assortment, right? That's the widest assortment out there. They can beat us on the breadth of customer data that they have and the budgets they have for analytics and all things like that. They can beat us on price because they can have loss leaders and so forth that smaller guys and others can't. 

There's a whole number of ways that the big guys can win and take advantage of scale. But there's a couple of things that they can't do. And there are those other things that I think that smaller retailers need to understand and take advantage of, as we said, to kind of get the edge on Amazon. 

And then, and you know, interrupt me anytime Chase with questions here. But the biggest theme about where you get the edge on Amazon is knowledge and intimacy. And that's both about your products and it's about your customer. 

So let me start off on a product example. Let's just say you're a local or a smaller t-shirt manufacturer and you're making sustainable t-shirts made out of recycled plastic threads. And I'm a customer that's interested in that. 

I can talk to you either in your online chat, through your mobile, through your email, whatever. You can talk to me about that manufacturing process. You can tell me that every t-shirt saves three bottles this that in the other. You can go into tons of detail about your process. 

And by the way, if that's your company, you're super passionate about that, right? You're passionate about sustainability that's why you created a t-shirt company that makes t-shirts out of plastic bottles. 

Amazon might have a similar t-shirt and they're sourcing it from whomever, no competitor. They don't have anybody that I can talk to. I can't really talk to somebody and say, how do you get into this? Why are you doing this? How does it actually fit? How does it wear? Is it durable? All these different kinds of questions. 

So we have an opportunity to be much more intimate about the knowledge of the product that we have and demonstrate that with our customers. And I think that's an area where you can get a big edge. 

Chase Clymer  

Oh, absolutely. I mean, Amazon's got millions, if not billions of different products that their customer service team are not experts in any of them. 

Dave Cherry  

Correct. 

Chase Clymer  

Where you know, your SKU count is nowhere near that. And you know, you are 100% an expert in what you're doing on the product level.

Dave Cherry  

I'll give you another example, Chase, and this is one of my favorite stores here in Columbus. Road Runner Sports. They're a national chain. But I love it when I go into Road Runner Sports and the sales clerk, they're a runner, and I'm a runner. 

And they look at me and they say oh, I think you probably protonate this way. You need a stable running shoe. Here, jump on the treadmill and let me watch how you run and give you some advice. Oh, your knee hurts. We have these, you know, wraps that can go wrong. And by the way, here are some hydration tips that you might want to try out like noon hydration as an example or something like that. 

So I'm connecting with a runner, and I'm a runner, so we have an affinity. And so here's that second piece when I talk about knowledge and intimacy with your customer. Once that sales clerk who, again, Amazon doesn't have a sales clerk who can see me or can talk to me about my running, my race, my muscle aches, all that stuff, and can really direct me to the right product. 

On Amazon, we're dealing with all these product reviews. And I'll be honest with you, I had no idea which ones are real or not. Are they bots? Are they real people, everything's a five star, and who knows what's going on? 

But you've got an opportunity to really know your customer and what they're looking for and take advantage of that in-person interaction time.

Chase Clymer  

Yeah, I think the recommendation in the salesmanship of like being in person is such a competitive edge. And, while Amazon is, you know, finally opening up brick-and-mortars. There are no people in those stores. There are people who walk in and walk out and charge their credit card, which is bizarre and kind of cool at the same time.

Dave Cherry  

Well, I think I think it's one of those things, you know, I quote, this, one of my favorite books, The Shopping Revolution by Barbara Kahn. And she talks about the different drivers of customer satisfaction, and one of the big drivers that Amazon's taking advantage of in those stores, and they've done it with Prime, is convenience.

You want to come in, get something, have it shipped in two days, or you know, just be in and out quick. And I don't want to talk to anybody. And if I'm buying, you know, a water bottle, or a coffee mug, or an electronic accessory or something, it might not be a big deal. I just want to be in and out. 

But when I'm buying a product that is personal, that has meaning to me, I want to know more about that. I want to know about the sustainability factors. I might want to know about the designer. I might want to know about durability. You know, in running shoes, application to an activity that matters to me. 

And that's where...it's a relationship that you can cultivate with your customer. You know, Amazon has a very, for their sake and for mine, a very profitable transactional relationship with me. I'm a Prime member, like so many other people, I buy tons and tons of stuff. I love it when it shows up on my doorstep. But it's very transactional. 

And you know what I mean by that, let's call it Amazon 2. If somebody else came up along and was able to push Amazon off the block and did the same thing that Amazon did, I'd be their customer in a minute. There's no intimacy in that relationship. 

But I'll go back to my example of Road Runner Sports, I can get my running shoes cheaper in a ton of different places. But I always go back to Road Runner Sports. I love that relationship that they provide for me, and I pay more for my shoes to get them from Road Runner because of that intimacy, the relationship that I have. 

And Amazon doesn't cultivate that. Not again, good business model but when you're a smaller retailer, and almost all of us are smaller than Amazon, if you focus on that intimacy and build relationships, not transactions, not commoditization, you can get that advantage over Amazon.

Chase Clymer  

Yeah, there's that triangle, that you can kind of talk about when you're building a business. And you can only have two out of the three and you straight up have to pick it. 

And it's like you can compete over price or service or now I'm drawing a blank on the other one. 

Dave Cherry  

Quality.

Chase Clymer  

Quality, yeah. So Amazon's competing on price and quality, they're not competing on service. And so essentially what we're talking about here is the advantage that you can get over Amazon is outdoing service in all aspects.

Dave Cherry  

Yeah, it's an outdoing service. And like I said, I've used the term a whole lot, you know, whether we say relationship or experience, you're connecting with the person. 

And think about just the analogy, in your personal life, you know, whether it's your parent, your sibling, your spouse. At some point, there's a relationship there where you care more about them than just the transaction of what you're doing with them. 

I always talk about, you know, if you have a best friend that always knows what to say, always knows how to pick you up when you're down or cheer you up or do something. They're applying context to any situation. That's one thing that Amazon doesn't do a terrific job about is understanding the context of their customer.

They're just providing all these different options. And again, huge assortment, I can buy anything out there and great price and it shows at my door and Amazon's an awesome business. But it's transactional. 

And if you can be that brand that understands the relationship with a customer that has, and it might be that great graphic design t-shirt with a social-political slogan on it at just the right time. Or you're hitting me with a sale at just the right time, right? You're adding that contextual nature to it. 

And when you add the content of a good product to the right context, that's sort of where that magic happens, and you got a relationship. And again, I think that's where we can focus as smaller guys than Amazon. 

And it's something that we can be there. By the way, we talked about Amazon a lot here. It's the same thing with Walmart and Target and Kohl's. I mean, those big guys, most of us are never gonna be able to compete with their budgets and their capabilities and their talent, and so forth. But there are other things that we can all do really well. 

Chase Clymer  

Absolutely, that's a great thing to point out. It's like David versus Goliath. You know what I mean? 

There are a bunch of stores way further along than you. And this could honestly even be like your biggest competitor, you can kind of take this as an edge as well. Someone that's still in your industry, and still definitely smaller compared to some of the other larger ones out there.

Dave, I can't thank you enough for coming on. Before we go here, just give a quick sales pitch about yourself. I just want to thank you for your time.

Dave Cherry  

Oh, well, I appreciate that, Chase. So this is kind of what I do. This conversation is what I like to do. 

I like to say, I work and consult for folks that are in the customer experience industry. And that is anybody with customers. Whether you're retail banking, insurance, health care, transportation, you name it. 

If you have a customer, figure out what your customer experience strategy is, how are you going to build that relationship, and then understand your gaps. 

And then I'll help you fill those gaps with technology and innovation. I'll help you measure and inform your decisions with analytics and build a comprehensive strategy to help grow your business. 

So if anybody out there is looking for help or wants to have a similar conversation very specific to your business, I'd be thrilled to do so. And you can find me out there on Twitter @davecherry, cherryadvisory.com, Dave Cherry out on LinkedIn

Lots of ways to find me. I'm an easy guy to find reading around Columbus. And Chase, I really appreciate the opportunity to chat with you this morning.

Chase Clymer  

Absolutely. I'll make sure to link to all that stuff in the show notes. 

Dave Cherry  

Awesome.