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How the Amazon effect is disrupting e-commerce logistics

29 Jan 2019, 19:47

https://www.retailcustomerexperience.co ... logistics/

By Inbal Axelrod, co-founder and CMO, MyRouteOnline

It's hard to remember the days when you would order an item online, and have to wait six to eight weeks for delivery. These days, the growth in e-commerce has taken the world by storm. Name anything, and you can have it at your doorstep on the same day, with just the click of a button — and this is all thanks to, the Amazon effect.

The Amazon effect has become a global phenomenon that has drastically changed the game for customers and for brick-and-mortar retail. This impact is driving the shift and evolution of the e-commerce market, and naturally, logistics.

So, how exactly has the 'Amazon Effect' disrupted e-commerce logistics?

The Amazon effect
Named after the e-commerce giant, ‘the Amazon effect' is the disruption on brick-and-mortar retail caused by Amazon's domination of online shopping. Amazon's impact has not only lead to a boom in e-commerce — documented by millions of square feet of empty retail space around the world — but also, a massive shift in customer expectations at every point of the supply chain.

Unfortunately, Amazon's various capabilities have created a problem for many market segments that may not have the same resources — and so, they must struggle to keep up. Now, customers expect readily available inventory at all time, real-time tracking information, streamlined support, and more, to guarantee a swift and seamless e-commerce experience. However, these expectations exceed traditional brick-and-mortar retailers capabilities, thereby exhibiting a tricky situation where they are falling behind.

Let's dive deeper into these new customer expectations.

Inventory
The global e-commerce market potential is astounding due to the many manifestations the Amazon effect has brought to light. Such as, the possibility to shop for anything, anytime, and anywhere — all you need is an internet connection.

More often than not, online customers can find the exact items they are looking for, without looking very hard, and without having to worry if the item is in inventory. Meaning, customers can enjoy purchasing whatever they want, have it delivered to their doorstep, and avoid the hassle of having to wait for an item to come back in stock - like they would in any brick-and-mortar retail store.

Customer-centric approach
As Amazon continues to outpace of other forms of retail, companies that wish to thrive in the market must not only follow suit but also, be proactive in taking control of the customer experience - and the new demands that the Amazon effect has made possible.

Today's ‘new normal' business environment focuses on adopting a customer-centric approach — the famous buzzword we love to talk about — and working on finding new ways to innovate and improve the shopping experience.

Did you know? Tactics such as personalization are crucial for customers and can make or break your interactions with them. In fact, according to a study conducted by Accenture, "75 percent of consumers are more likely to buy from a retailer that recognizes them by name, serves up recommendations based on past purchases, or acknowledges their purchase history." Therefore, by taking a page out of Amazon's book — and focusing on the customer — you can guarantee to deliver excellent customer service, that will keep customers coming back for more.

More efficient deliveries
The technological evolution has opened a treasure trove of possibilities when it comes to deliveries. This, paired with the boom in e-commerce, has led to customers demanding streamlined same-day deliveries.

With efficiency in mind, e-commerce companies are facing the unique challenge of delivering their influx of orders in a speedy fashion or risk falling behind — like their brick-and-mortar counterparts. As Amazon's supply chain continues to move more and more products, traditional delivery companies must push harder than ever and perfect their strategic planning and resource investment in order to stay in the game.

Amazon solves their influx problem by utilizing a vast network of freelance delivery drivers to complete the last mile delivery. With these drivers, Amazon can ensure quick turnaround times, cost savings, greater flexibility, and scalability to their supply chain, thereby, all in all, ensuring an efficient service is delivered. It's become clear that Amazon is paving the way for the future, therefore, other market segments should pay close attention to Amazon to see what tips and tricks they can take away, and repurpose for their own company.

What's next?
Love them or hate them, it's clear Amazon is here to stay. As Amazon constantly works to put the customer first and go over and beyond it seems that they will continue to pave the way for disruption in the e-commerce sector — especially with talk of delivery drones and autonomous vehicles on the horizon.

This means as e-commerce becomes more streamlined and customer-centric, companies must gear up and prepare for more shift and change in the market, all the while, adapting their logistics and services to fit in — or be left behind.


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