Better Than Amazon: The Hidden Costs of Everything

Amazon is also known as “The Everything Store” because of its extreme breadth of range. It’s the sort of range that physical locations would struggle to match because of footprint limitations and the carrying cost of stock. Trust me, Borders tried to match them for range in just the books category - look what happened to them.

Stocking a broad range of products means Amazon can become the consumer go-to for literally anything. This has happened to the extent that Amazon is the world’s second largest search engine, behind only Google. But “search” is the operative word here because the greater the range of products you sell, the higher the search costs incurred when a consumer is looking for something very specific. And it’s not just Amazon either, the likes of Chewy and all online pharmacies face this issue of search costs too.

Imagine a pet owner looking for a particular prescription diet or medication. They search for it but find there are branded and generic versions. There are cat and dog versions. Big dog, small dog and medium dog versions. Different sizes and different doses. If the one they pick doesn’t match what’s on the prescription, the order either won’t be filled or worse… their pet will receive the wrong treatment. Scary.

You know [your customers] and you’ve got the medical record to back you up.

Your veterinary clinic is not an everything store. It’s the exactly-what-your-pet-needs store. That’s your competitive advantage. When Mrs Smith asks for some more of Becky’s pet food, you know just what she needs. When Fabio says Fuzz is getting low on those red pills, you know exactly what he means. You know them and you’ve got the medical record to back you up. Sure, the likes of Amazon can invest millions into improving their search function through machine learning methodologies like natural language processing. But do you know who’s really good at naturally processing language? People. People like you and your team.

If search costs are such an inconvenience then why does it still feel like clinics are haemorrhaging revenue to the disrupters?

Most veterinary clinic owners think it’s driven by cost. Penny-pinching pet owners are willing to wade through search costs to save a few bucks. After all, many online pharmacies have a peculiar ability to sell drugs more cheaply than a lot of clinics can buy them at wholesale. However, our survey of pet owner attitudes saw only 5% report cost as a barrier to consumption of veterinary products and services. And over half of all pet owners reported feeding premium diets to their pets, which suggests willingness to spend is not the whole story here. What if a big part of the reason pet owners turn to online stores is because they’re there when you’re not?

It’s 10pm and Anelise has just returned home from a late shift. She goes to feed Molly but notices she’s low on the prescription diet Dr Patel recommended. The clinic is closed. The next time she remembers is while she’s browsing Amazon, and she buys what she considers to be the closest approximation. (Funny how those ads know just what you need just when you need it.) This is how a lot of compliance gaps open up. The pet owner thinks they’re doing the right thing but the pet isn’t getting what they need. It happens because while online stores have the inconvenience of high search costs, they also have the major convenience of being always-on.

So, short of being at the whim of pet owners 24 hours a day, how can you compete? Well, fortunately Anelise has actually downloaded her clinic’s PetsApp. When she discovers Molly is low on the prescription diet she simply opens a new chat and asks for some more of the food Dr Patel recommended. But the clinic is closed?! No problem, Anelise knows that. The Automated Welcome Message the clinic has set tells Anelise not to expect a reply until the next morning. Anelise doesn’t need a reply now. She just wants to delegate this item from her to-do list to the clinic’s to-do list while it is still front-of-mind.

Exactly these sorts of interactions take place on PetsApp all the time. One particular example came in at 9pm and didn’t get picked up until 10am the next day. The veterinary receptionist processed the click-and-collect order, including taking payment within the chat. The pet owner’s feedback on the 13 hour lag? “⭐️⭐️⭐️⭐️⭐️ 5/5 - Super fast response!”

With that kind of always-on convenience and zero search costs, why would anyone go anywhere else? Search me!