Amazon’s Prime Day: Primetime for Online Retailers to Get Logistics Lessons

Tags: Retail, E-commerce, Logistics, Retail Logistics, Supply Chain

Nick Foy is Chief Strategy Officer, ModusLink

Did Hallmark invent Valentine’s Day? Not quite, but it certainly helped. Did Amazon create a new shopping event with Prime Day? You bet!

We’re all used to Black Friday, then we got Cyber Monday and now it looks like Prime Day is set to be another date in the shopping frenzy calendar. In 2016, it generated up to $600 million in sales–and projections for this year’s event (July 11, 2017) are as high as $1 billion.

Not only can we expect some great deals for consumers, Amazon will get to flex its online sales and logistical muscle–and that’s a big deal.

Unlike many logistics and online sale platforms, the Amazon backbone is designed for this sort of scale, taking advantage of substantial year-over-year investments in fulfillment centers, automation, sortation, middle-mile and last-mile operations.

If you still think of Amazon as just an online retailer, you need to think again–it’s undoubtedly the most sophisticated technical and logistical company on the planet. So what can the rest of us in logistics and online operations learn from this?

Plan, Execute, Learn, Repeat

Plan - You’ve probably heard the Jeff Bezos ‘Day 1’ philosophy, but it’s fundamental to how the company operates. Don’t underestimate the importance of detailed planning whenever you go into a peak period but also realize that no plan will survive first contact with consumers. Run scenarios such as what happens at 50 percent of your forecast, 150 percent, 200 percent, and even 500 percent, and have these scenario plans available so that as you see the demand coming through you reach for the revised plan, not having to come up with one on the spot.

Execute – Flawless execution is important during any peak period, but it cannot start with peak. Instilling operational excellence and setting expectations during non-peak will create the right expectations across your entire workforce so that you have the right mindset when it matters most. Rigorous and relentless focus on operational excellence is crucial whether it’s in physical operations, contact centers, online sales or support teams.

Learn – As you come out of the peak, you have to learn about what worked, what didn’t work, and what you’ll do differently next time. It’s tempting to breathe a huge sigh of relief after the peak has passed and to start planning the next big thing, but if you don’t have an effective process to capture these learnings you’ll miss the opportunity to improve. Some organizations call this a post-mortem process but I prefer to call this the “after-action” process. Planning for the next peak starts with an effective after-action process. And remember, if there are failings, focus on attacking the process and not the people.

Repeat – Use your after-action learnings to create the bones of your next peak plan. Having a continuous peak planning process that incorporates all of these elements will continue to push the organization and individuals within it.

Consumer demands aren’t waning anytime soon and having an effective approach to peak planning is a must in today’s fast-moving businesses. Are you ready?






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