Friday, November 25, 2016

The Amazon Effect

For anyone who runs a warehouse and has Amazon "come to town" you know, at a very micro level, about the "Amazon Effect".  The entire labor and transportation capacity situation in your town changes in an instant.

However, it is bigger than that from a nationwide perspective and I had the privilege of listening to a very insightful presentation given by  Eric Johnson (Twtr: @AmShipEric), research director and IT editor at American Shipper at the Jacksonville CSCMP roundtable event in October.

He had some very good insight into what Amazon is trying to become and what they are not trying to do.  My conclusion, after listening to Eric, is Amazon wants to "own the customer".  Now, of course the key question is what does this mean?

If you think about "owning the customer", it really covers about 5 major touch points:
  1. Own the order experience (The first point to gain loyalty for any product).  This drives all sorts of information technology.
  2. Own the delivery experience (Appointments, delivery, right to how the customer is greeted). 
  3. Own the post delivery experience (solve issues etc)
  4. Own the payment experience (whether they sell it to you or not).
  5. Own the customer ecosystem (Alexa app, ECHO and DOT). 
If your company is not investing heavily in all of the above you most likely are going to be displaced by Amazon at some point.  This is why I published: "What Exactly is Amazon... 3PL? Retailer? IT Company? Delivery Company? - Answer: All of the Above" back in October of 2015!".  

Bottom line:  The story has not changed.  Amazon is coming for your business regardless of what you are doing so be ready to compete.  And, for those who think it is just a matter of time before they are crushed by the weight of costs, think again.  They have entered into a new space and as this article from back in February reminds us:  They are winning the race for the smart home, and no one is noticing


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