In that post, Andy identified four ways in which e-commerce sites can potentially compete with the largest horizontal players like Amazon:
- Proprietary pricing
- Proprietary selection
- Proprietary experience
- Proprietary merchandise
Bonobos is an example of the fourth.
However, even creating your own direct to consumer e-commerce brand, enabled by proprietary merchandise, isn’t necessarily defensible from competition. The reason is that, in the absence of intellectual property protection along an important product dimension, which most product categories do not have, your product features and resulting quality are likely to be replicated by competitors who discover and begin to work with your supply chain.
When the product features offered by different e-commerce brands begin to commoditize, branding becomes the key differentiator. And consumer review sites, which were initially designed to assess product features, become the target of e-commerce brands’ branding efforts.
Also published on Medium.