Bucci said even 10 years ago that “Amazon was the great white shark,” and the only way to compete against it is knowing what the online giant isn’t good at. “Amazon will do the ‘I need a brake pad.’ I am not angling for that purchase. We want that sale, but it is not important. Amazon won’t go the last 10 percent. … You need to do the final 10 percent that is diminishing returns for Amazon,” he said.
That means creating a multitouch — sometimes multimonth — journey for the customer. “We shifted to become an authority play … became more like Consumer Reports in our space. That was a marketing tool and super-value-add for the customer,” the Revzilla founder said.
There is a universal lesson in this for entrepreneurs. “If you are in B2C [business to consumer], it is great to provide consumers with vitamins, things they love and that make them feel good, but it is way more valuable to be a painkiller,” Bucci said.
He is currently invested in GoPuff, an on-demand convenience delivery service. While it is not selling high-end consumer products that may require months of marketing for a consumer to purchase, Bucci said it has been specifically built to do what Amazon can’t. Amazon will do a huge business in Prime grocery and deliver in one to two hours, but GoPuff delivers the convenience-store items that consumers most want (plus alcohol) in 30 minutes.
One Amazon advantage even these successful online competitors cannot avoid is the rent on digital advertising, an area in which Amazon continues to gain on Google and Facebook. “It is only going to increase every year … and only going to get more expensive, the pound of flesh going to Google and Facebook and the cost of acquisition,” said Sullivan, who started at Google in the advertising unit.
One way to manage that expense is embedded in these customer-centric, problem-solving business models: making the business so much a part of the customer’s life that they come back. “You own them, so you can control those rent costs,” Sullivan said. “Anyone is naive if they are not thinking about how to future-proof their business.”