Reinventing Logistics in the Age of Amazon
In 1909, Henry Ford said, "Any customer can have a car painted any color that he wants so long as it is black." Decades later, Jeff Bezos said, "Customers are divinely discontent. Their expectations are never static—they go up."
Retailers have learned the hard way that taking the Henry Ford approach in the age of Amazon is not only painful, but downright harmful to their business.
Consumers' definition of fast service keeps evolving. Amazon is resetting expectations to be as fast as same-day, within hours of an initial order—and at low or no cost to consumers. FedEx announced it will deliver packages seven days a week starting in 2020.
Retailers know they have little choice but to follow suit. And maybe even that won't be soon enough.
Retailers must do more than look for incremental improvements. Instead, they need to completely pivot their logistics to remain competitive.
Today's logistics environments must consider a vast, widely dispersed, wildly complex maze of workflows. As legacy systems are rarely up to the task, today's e-tailers should seek to improve their entire supply chain—from the warehouse to the consumer. Here's how:
Restructure workflows and integrate technology into the warehouse. Using mobile technology, this will give retailers full visibility into:
- How packages are being received, stored, and inventoried.
- How they are being picked and packed for in-store vs. online.
- Inventory monitoring and the ability to re-order in real-time.
Online delivery. It is critical to manage the complex interaction between company-owned fleets; express delivery companies; post offices; and small, independently owned and operated trucking fleets to ensure online delivery meets customer expectations.
To do this properly, retailers must standardize technology and data flows to avoid needless delays, reduce downtime, and maximize visibility at every delivery stage. In addition, it is important to choose the right equipment, ruggedize it to survive falls and failures in the field, and ensure it's only being used for its intended purposes.
Turn in-store experiences into digital opportunities. If you have a brick-and-mortar store presence, equip the sales floor with the right technology to collect meaningful customer data points that you can feed back into your physical and digital sales strategies.
- Integrate technologies such as cameras and facial recognition, mobile beacons, and digital displays to optimize sales efforts.
- Set up systems to maximize personalization and cross-selling opportunities for each customer while vigorously protecting customer privacy.
- Leverage customer insights collected in-store to help inform online efforts and vice versa.
At every stage—from order to delivery—retailers should also consider what data to gather and how to use it to learn from, troubleshoot, and optimize the overall customer experience.
In a recent survey, nearly 65% of consumers said they would be very or somewhat comfortable with new shipping methods offered by retailers. Yet despite many beta tests, there has been surprisingly little adoption of these new delivery methods.
Freddie Mercury famously sang, "I want it all, and I want it now." Knowing this, it's time for retailers to become every bit as "divinely discontent" about delivering as fast as consumers are.
The future—and maybe even the present—depends on it.