3 Key Takeaways from Amazon Webinar

Jun 15

3 Takeaways from Our Webinar: Maintain a Competitive Edge in an Amazon World

Started in 1994 as an online book retailer with big ambitions, Amazon is now one of the largest retailers in the world and has become a model for customer experience, free shipping, and on-time delivery. Consider that Amazon is now worth almost double of Wal-Mart’s market value, and you begin to understand the power it has on global commerce, not just e-commerce.

One of the most noteworthy and lasting influences that Amazon has made on retailers is its free and fast shipping model. Consumers are ordering products online at increasingly high records and transportation experts have deemed this demand as “The Amazon Effect”. In other words, online retailers need to match their transportation strategy to Amazon to compete.

MercuryGate Chief Marketing Officer, Karen Sage, joined President & CEO of Transportation Intermediaries Association, Bob Voltman, explore “The Amazon Effect” and offer actionable ways in which companies can compete using new technology.

1. Creating a consumer-centric supply chain remains a challenge for online retailers

Consumers want faster and shippers are doing more to keep up with the demand. The model for a positive customer experience extends past the quality of the product and customer service to now include the desire for expedited, free shipping from any location.

Consumer Experience Becomes Key to Growth

It is predicted that by 2020, customer experience will be more important than price, product or brand choice as a differentiator in purchasing decisions.
Supply Chain Moves to Front of Customer Value Proposition

An annual study conducted by Martec International titled, “The 2017 State of Retail Supply Chain Report” highlighted the current challenges that shippers are facing when it comes to bringing the supply chain to the front of the customer value discussion. The data summation indicated that many of the 218 retailers surveyed “aren’t clear on how to make the supply chain more consumer-centric. That’s partly because the concept of the consumer experience is still new to retail supply chains.”

Bob echoes the survey by encouraging retailers to take part in the transition rather than fight it in stating, “the world has changed and there is no going back.”

2. Technology proves to level playing ground for those retailers who want to compete with Amazon

Technology is creating new opportunities for retailers who want to compete to stay ahead. As Karen states, “There are certainly technology innovations to be had in the supply chain. That said, there is a tremendous amount of useful technology here today that is not being leveraged.”

When it comes to harnessing the power of technology, it’s crucial to utilize readily available tools that can make a long-term business impact. For instance, a Transportation Management System offers a viable way to seamlessly boost your supply chain strategy. Moreover, only 35% of shippers are using TMS as part of their overall supply chain management strategies. Those retailers who have already integrated a TMS into their transportation network are reaping the benefits today, including more automation, real-time data, visibility across and organization and efficient inventory management.

3. Retailers need to shift their focus onto inventory management

One of the most interesting ways in which Amazon stays competitive is through their top-tier inventory management practices. The consumer demand for “right here, right now” has created a new burden on inventory management to be able to deliver on the call as it comes.

According to Bob, “One of the fastest growing aspects of the supply chain is warehousing. You are seeing warehouses pop up across the country as companies begin to look at regional or even local distribution models since Amazon is requiring local pickups.”

Speed-to-market plays a critical role in a successful supply chain strategy. To shorten fulfillment times, retailers must expand and increase their distribution centers to bring them closer to the customer. This also means more costs for development, more trucks, and more inventory overall. To help offset those burdening costs, retailers are turning to a TMS to better understand exactly what they need to compete today and stay ahead tomorrow.

The TMS is designed to challenge the “The Amazon Effect”

“From scheduling warehouse workers to optimizing routes, the right TMS can give one platform that all employees can work from,” said Karen Sage. “In doing so, strength is added to inter-department management and your co-workers are equipped to rapidly identify problems, move through processes faster and mitigate risk from decision making while adding increased visibility to the supply chain in its entirety.”

Per research conducted by The Ohio State University, 81% of industry leaders surveyed found that a TMS contributed to critical business drivers, including managing complexity, improving customer experience and reducing costs with complexity management as the primary benefit. Download the research here.

What started as an interesting idea – buying goods online – has turned into a logistics transformation that will only challenge retailers who are not prepared to take on the new complexity of today’s supply chain.