Retail Upstarts Take Shots at Amazon
In e-commerce, Amazon looms largest.
Leaders from a number of retail startups—Casper, ipsy, Shippo, and others—participated in an open discussion about their businesses at a Tuesday breakfast roundtable at Fortune’s Brainstorm Tech conference in Aspen, Colo. Amazon (AMZN), whose stock price soared above $1,000 per share for the first time this year, remained the inescapable center of gravity.
Julie Bornstein, chief operating officer at Stitch Fix, a clothing subscription service, said that people suffer when a single company monopolizes a market. “It’s a danger to consumers to let Amazon use AWS [Amazon Web Services, the company’s cloud business] to price everyone out of the business,” she said. (Amazon’s margins for web hosting far exceed retail, a position that allows the company to subsidize its e-commerce business.)
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Laura Behrens Wu, CEO of Shippo, a startup that makes logistics software, agreed and identified what she considered a weakness in Amazon’s approach. “What Amazon’s not doing well is using Instagram, Facebook, and Twitter to create its own brands and voices,” she said. “Who enjoys thinking about Amazon in their private life? No one does.”
Rather, Behrens Wu said she follows other influencers on social media who have built up their own personal brands and trust with consumers online. “That’s where a small to mid-size brand can stand out,” she said.
Jennifer Goldfarb, president of ipsy, a makeup subscription service, noted that companies no longer dictate their identities from the top down. “Brands these days aren’t just some executives sitting in room deciding what a brand is,” she said. “They’re bringing consumers into the conversation.”
“Creating memorable distinct experiences is what will ultimately beat the commoditization of transactions that Amazon dominates,” she said.
Philip Krim, CEO of Casper, a mattress seller, said that his company has found success by driving engagement with customers in order to build personal connections. “We try to optimize UI [user interface] to drive those touch points,” he said, meaning the company designs its website to encourage interactions. For instance, simple acts, like prominently placing a telephone number and encouraging people to call them, can make the experience resonate with consumers, he said. The approach contrasts with Amazon’s one-click buying philosophy.
Later on the Brainstorm Tech main stage, Jeff Wilke, CEO of Amazon’s worldwide consumer business, responded to a question about whether the company’s ultimate aspiration is to crush all of the competition.
“It’s not a football game,” Wilke said, noting the attendance of many e-commerce rivals and upstarts in the audience. “There are going to be many winners at the end of the day.”