In the current economic landscape where every day more customers turn to online shopping, the growth of e-commerce has come traditionally with a cost to brick and mortar retailers. But, in the last couple of decades, the unparalleled expansion of the giant that is Amazon has created an effect whose influence goes well beyond traditional retailers and touches upon buyers, technology, and the supply chain on an equal level.
Since it went live in 1995, Amazon has had a huge impact on the behavior of the buyers not only on their site but also when they visit physical stores. The customer has grown accustomed to the seamless buying experience offered by Amazon and expects a timely and effective service and a greater variety from where to choose when visiting the store. Searching the halls for an item, pick it, and then standing in line to pay for it is no longer necessary when you can shop online.
On the technology front, Amazon truly changed the game. From their unmanned drones to fulfillment center robotics to their great investments in AI technology, Amazon leads the way in technology throughout their supply and distribution chain. Their employees work in technology-enabled environments where the tech is used to improve processes and assist them in doing their daily role, going from the random stow and pick through to box-sizing algorithms or software that determines the shortest, most efficient walking route from one place to another. The reach of their investment has single-handedly forced other major organizations to commit to new technologies in order to stay competitive.
In 2013, the giant filed a patent for "Anticipatory Package Shipping" to significantly reduce delivery times for its products. Amazon uses a powerful data mining system by closely studying user behavior, looking at search history, purchases made, wish list, products in and out of the shopping cart, even the time the mouse pointer stays on certain offers with one goal in mind: to predict demand. In this way, merchandise is distributed to delivery warehouses that customers in those regions have not yet ordered, but are very likely to do so; it is then possible to get those products to the customer quickly at the time of order, saving time and money as well as improving customer service immeasurably.
Finally, on the supply chain level, Amazon has made it crucial for every company to be able to handle big volumes and focus on the end-to-end traceability of every shipment. The increased demand and satisfaction level requested by buyers accustomed to Amazon’s standard has pushed other companies to develop and adapt in order to survive and thrive in this very competitive market. The use of 3 and 4PL’s is growing as their networks and resources are able to rival those of Amazon and remain competitive. If you want to compete, you have to put all your efforts into increased efficiency and reduced costs.
Now, we can start to understand the major influence of “The Amazon Effect” on the global economy and how it has become a template for business expansion across the world.
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