Headlines proclaiming that “Amazon is Eating the World” and that Amazon’s market-altering dominance – AKA the “Amazon Effect” – is causing immense concern for the retail industry as the playing field appears to be growing frighteningly imbalanced.

Amazon is a leader in customer service, customer experience, delivery and, of course, product variety and selection. With their ultimate goal of owning the entire ecommerce supply chain, Amazon’s strategy can focus on long-term domination rather than short-term profit. This allows the ecommerce behemoth, with its unmatched resources and ability to lose billions on logistics without flinching, to drive down prices while building up intense shopper loyalty and, ultimately, squash competition. Like any ungentle giant, Amazon reinvests profits to solidify its spot as the best-of-the-best, meaning that it will only get harder to compete.

This domination has left many e-tailers convinced that there is no way out. But what these online retailers really lack is an effective long-term strategy leveraging the very things Amazon doesn’t have – improving their existing advantages to beat the giant at its own game.

Size Matters

Amazon may indeed be gargantuan, but big is not always best. A restaurant that serves every type of cuisine is unlikely to cook up linguini as good as a good Italian joint. Likewise, offering everything means Amazon specializes in nothing. Smaller online retailers must leverage their expertise, positioning themselves in a way that consumers view them as experts. For example, a camera store focusing on cameras alone will be considered more knowledgeable in the field than an electronics store selling cameras, laptops, and HDTVs. Take Casper, the online mattress company. They made the experience of purchasing a bed into something sexy, memorable and even prestigious by positioning themselves as the experts in high performing mattresses.

Boast the Best Customer Experience

E-commerce does not enable the in-store pizazz or meet-and-greet from attentive staff that traditional shopping offers, so e-tailers must…