5 Ways to Leverage the “amazon Effect” in Logistics
The Amazon Effect continues to transform logistics today. Certainly, some shippers may have predicted changes back in the 90’s when the world’s largest bookstore opened its digital doors and gained quick popularity, but few likely saw the seismic shift in customer expectations that have followed since. Now that Amazon sells everything from A to Z, the entire Amazon experience has become the de facto standard for e-commerce: fast and free shipping, a process that allows for last-minute changes, 100 percent order accuracy, a wide variety of product choices, omnichannel shopping, and more (Atlanta Business Chronicle).
Retailers everywhere are revamping supply chains to stay relevant in Amazon’s shadow, and for good reason. Amazon has changed the way people shop. According to the U.S. Department of Transportation, brick-and-mortar stores saw foot traffic decline by roughly half in in 2013 just as e-commerce sales increased at double the pace. By 2012, shipping and truck tonnage had exploded to 13 billion tons per year, reaching historic highs during the 2013 and 2014 holiday seasons. And demand continues to climb, with expected growth of more than 43 percent, or 18.8 billion tons, by 2040 (Shorr).
Acknowledging the Amazon in the Room
There’s no doubt that the once novel idea of online shopping has led to a full-scale, logistics transformation. But becoming an Internet powerhouse is not the only path to success. If you’re agile and focused, you can make your own mark in e-commerce with five key practices:
- Streamline Processes. Find the right mix of technologies, service providers, carriers, warehouse locations, etc. to streamline logistics operations and lower costs.
- Enhance the Experience. According to research, 63 percent of millennials rely on social media to learn about and choose products. Just as customer service can make or break an in-store experience, online sellers must engage the customers they want to keep.
- Meet Omnichannel Demand. Make products available via apps, websites, phone, and physical stores. Help customers buy anything, anywhere, anytime.
- Adjust Shipping Approaches. Shipping directly to consumers requires approaches that are costlier and more complex than pallet shipping. Instead of sending truckloads to stores or distribution centers, adopting new methods of inventory organization and automation is critical.
- Reduce Lead Time. Amazon brings products closer to customers with strategically placed distribution centers, but some shippers are finding simpler ways to reduce lead time. For example, Macy’s uses its stores as mini warehouses, shipping items from their shelves to customers, to cut down on lead time and better manage inventory for both sales models (Shorr).
Finding “Your” Way
Adjusting to and leveraging the Amazon Effect starts with a shift in mindset, but more importantly, it requires action. Reshaping an entire supply chain is a tall order. Fortunately, a third-party logistics provider can guide you through the changes. Collaborating with shippers, a 3PL can analyze data, provide useful technology, and optimize your logistics operations.
- Transparent Supply Chains—See your shipments up close and while in motion with GPS tracking, as well as updates on order status, pickup and delivery, and other key details.
- Dedicated Support—Rely on 24/7/365 customer support for order management, dispatch, and onboard communications to keep your shipments on track.
- Logistics Planning—Optimize route and carrier choices, streamline scheduling, reduce lead time, minimize claims, and scale your supply chain by leveraging experts in e-commerce shipping practices, along with state-of-the-art technology and a variety of tools designed to control costs.
Capstone can help you leverage the Amazon Effect to transform your supply chain into the ideal logistics solution for your company.