Amazon’s Lessons For The Little Guy: A Dive Into Ecom Evolution

Hi Folks!

Coming to you live with a steaming mug of chai and a head full of thoughts.

The ecom realm constantly evolves with every click, cart, and checkout. While we often find ourselves beating up Amazon, critiquing Delta’s huge misstep, and laughing at Kohl’s becoming a hub for returns, we often do so through the lens of our business perspective.

At the same time, though, the consumer in us continues to shop at Amazon, hang in the Delta lounge, and bank that Kohl’s cash.

Catch the disconnect?

It's no secret that the big players have a knack for setting trends. They’ve got loads of data, a hefty tech stack, and the resources to dice, slice, and analyze every pixel of consumer behavior. They lead, VCs give money to SaaS founders, and the market follows, right?

But what if we, with our ears closer to the ground, could leapfrog some of the data-driven steps and create meaningful impact by just doing what feels right?

Much like the neighborhood auto shop offering a payment plan or the local grocery extending a better return policy for a VIP without waiting for data to justify the action.

So, as we sip through this chai, let’s delve into some ways in which the world of ecom is seeing a rhythm where innovation isn’t just a top-down affair.

We’ll explore how tuning into intuition coupled with a dash of daring could be a game-changer, especially when the data race is tough to compete in.

In this newsie, we’ll dissect some examples and explore how small brands can play it smart as well.

Ready to dive in?

This week’s newsie is brought to you by Tandym .

You know I love my credit card points, but I often skip on sharing tips. Not today.

Branded credit cards and retail have a long history, especially as a way for brands and retailers to engage their best customers. Nordstrom—CX royalty—has The Nordy Club. Amazon—‘Earth’s most customer-centric company’—has the Prime Card. The list goes on.

The benefits for customers are usually monetary: Amazon gives you 5% off for using their credit card. Nordstrom’s credit card accelerates your points accumulation and gives you access to special events.

These cards aren’t just good value for the customer; they’re incredibly profitable for brands and retailers, because they help drive purchase frequency and AOV while reducing processing costs. And until recently, these branded credit cards have been an advantage held tightly by enterprise brands. Not anymore.

So, here’s my tip: Tandym , today’s sponsor, is bringing branded payment methods (like credit cards and debit cards) to scaling brands. They’re leveling the playing field, giving you the ability to launch a branded payment option in a matter of clicks.

The best part?

Instead of paying upwards of 3% in processing fees, Tandym cuts those fees to less than 1% by skipping traditional Visa/Mastercard/AmEx rails.

Plus, you get customers with increased access to capital, creating higher AOVs and increased purchase frequencies. Check this:

Because Tandym is a payments company, they make money from consumers using their cards—not you. And don’t worry: I vetted their CX. They have a 4.7 rating on Trustpilot.

Check them out.

TANDYM

Big Brand Initiatives and Small Brand Implications:

Having set the stage on the potential synergy between intuition and data-driven strategies in ecom, let’s talk about some concrete examples that have changed the industry.

Initially championed by large retailers, these innovations have set a new standard and opened doors for smaller brands to adopt, adapt, and add their unique twist.

Here's a breakdown of some notable innovations:

1. Product Recommendations:

Big Brand Play: Amazon spearheaded personalized online shopping with its recommendation engine, introduced as early as 1998.

Their ability to suggest products based on past purchases, browsing history, and cart items has set a precedent in personalizing the shopping experience.

Small Brand Takeaway: While not having massive data reservoirs like Amazon, small brands can leverage simpler data collection tools, or even manual curation based on customer interactions and feedback, to offer personalized recommendations. And that might just be enough.

Recommendations aren’t just about merchandising the right product but also about preempting objections around a specific product.

2. Customer Reviews:

Big Brand Play: The early 2000s saw the rise of customer reviews as a crucial part of online shopping, with platforms like Amazon and Bazaarvoice leading the charge.

This transparency built trust and created a rich source of information for other shoppers—not to mention organic search benefits. Folks like Yotpo brought reviews to the masses in the 2010s.

Small Brand Takeaway: Small brands can foster a community of trust by encouraging and highlighting specific customer reviews across the customer journey, engaging with feedback, and making product and service improvements based on it.

It's about creating a dialogue, learning from the customer’s experiences, and creating growth opportunities.

Sometimes, that’s product refinement to fuel more word of mouth. Sometimes, that’s better PDP copy to mimic your customer’s voices, and sometimes, that’s organic content that performs better in performance channels.

3. Subscribe and Save:

Big Brand Play: Amazon's 'Subscribe and Save' model, introduced in 2007, revolutionized customer retention and convenience by ensuring a hassle-free, continuous supply of essential products at discounted prices.

Small Brand Takeaway: Small brands can explore subscription models to offer a hassle-free supply of their products, fostering loyalty and creating predictable revenue streams.

Subscription models can also be tailored to the brand’s unique product line and customer preferences.

4. White-Labeled Payment Providers:

Big Brand Play: Large retailers like Gap have introduced white-labeled payment solutions, such as the Gap Card, to streamline the payment process and reward loyal customers while creating a new revenue stream.

This trend has picked up with other big brands over the years.

Small Brand Takeaway: Not all loyalty programs are built the same, and you’ll notice—if you look closely—that different brands and retailers structure them differently.

Regardless of structure, white-label payment providers like our sponsor, Tandym , are commonly used as a way to get more customers into programs.

It's about creating a streamlined, rewarding shopping experience that also fosters customer loyalty, but you need to find the one that works for the dynamics of your customer’s behavior.

5. Returns Portals for Data Collection:

Big Brand Play: The advent of online returns portals by big brands has not only streamlined the returns process but also provided a rich data source to understand the reasons behind returns, aiding in product improvement and customer satisfaction.

Small Brand Takeaway: A simplified returns process and a platform to collect feedback on the returns can be a treasure trove of insights for small brands (we use and love Loop ).

It's an opportunity to understand customer preferences better and make necessary adjustments to product and every other part of the customer journey.

6. Setting Specific 'Arrives-By' Dates:

Big Brand Play: The practice of setting and meeting specific 'arrives-by' dates, honed by big players with robust logistics networks, has significantly reduced delivery uncertainty, enhancing customer trust and satisfaction.

Small Brand Takeaway: By understanding their logistics, maintaining transparent communication, and setting clear expectations on delivery timelines, small brands can build trust and enhance customer satisfaction.

It’s about bringing an Amazon-level of certainty to an otherwise uncertain online shopping journey (PDQ is bringing this to all of ecom).

When it comes to backing up decisions with data, small brands are at a disadvantage. The enterprise has tons more, so they can react faster.

But here’s the cool thing: We share the same customers. And you probably get to talk to them more.

If you’re willing to trust your gut—and inform your decisions with qualitative research from your side—these innovations carry lessons and opportunities. The trail blazed by big brands offers a roadmap.

Yet, small brands' nimble, customer-centric approach holds the promise of tailoring these innovations better to fit their community's unique ethos and needs.

That’s it for this week!

Any topics you'd like to see me cover in the future?

Just shoot me a DM or an email!

Cheers,

Eli ??