Amazon is notorious as a market disruptor, so its move into the business-to-business (B2B) space with Amazon Business has put distributors on high alert. And with good reason; fast delivery, specialized discounts and low prices are a few strategies used by Amazon Business to win customers and gain significant market share. According to DigitalCommerce360, Amazon Business has surpassed $10 billion in annualized sales and is set to top $31 billion in revenue and $52 billion in gross merchandise volume by 2023.
While Amazon’s foray into the B2B space may spur anxiety, the good news is that distributors can insulate themselves from mega-players by focusing on what differentiates them rather than trying to beat Amazon and its game.
Here are three strategies that distributors ought to employ to protect their turf and come out the other side with a stronger and more resilient customer network.
Strategy 1: There’s a way to do it better. Find it.
In business folklore, it has been said that the typewriter ink manufacturers were too busy competing for the longest spools to notice the personal computer market wipe them out. The business landscape is filled with stories about companies that have collapsed because they ignored the innovations that were redefining their industries. If you don’t want to end up like Blockbuster, you need to innovate.
A spirit of innovation is a lifeline for competitive advantage and relevance to your customers. The intelligent application of innovation in Amazon’s supply chain has been a critical factor in its success.
One way to introduce innovation into an operation is by leveraging technology to build new value propositions that can improve customer satisfaction. Take automation, for example. Implementing autonomous robots into the supply chain for repetitive tasks such as sorting, counting and fetching products in the warehouse can help save time and increase fulfillment speed.
Offering value-added services that address customer pain points is another supply chain best practice strategy to employ to introduce innovation. Providing customized delivery options that allow customers to decide when, where and how they want their shipments delivered will deepen business relationships and increase loyalty. When adopting innovation, it is critical to focus on areas where you can add value to your customer’s business.
Strategy 2: Technology is the engine of efficiency.
Supply chains that rely on manual planning processes have subpar operational efficiency and poor customer satisfaction levels. To boost operational efficiency in the supply chain and increase customer satisfaction, distributors need technology. Below are three supply chain best practice technologies that can help increase efficiency:
- Warehouse Management System:Invest in a modern warehouse management system (WMS) to gain supply chain visibility. A WMS provides a real-time view of the supply chain to help reduce inefficiencies, increase order accuracy and improve inventory management. For instance, you can see the inventory you have on hand and where the inventory is located in real time. This provides accurate inventory information and prevents out-of-stock issues and late deliveries.
- Automated Warehouse Picking:Incorporate automated warehouse picking systems such as collaborative robots and automated guided vehicles into a fulfillment operation to improve picking efficiency. Collaborative robots support warehouse staff with picking and help cut down on walking and fulfillment times. Automated guided vehicles make the picking process more efficient by transporting pallets, cartons or other items around the warehouse without an operator. For example, AGVs can transport inventory from long-term storage locations to forward picking locations to make inventory accessible to pickers.
- Mobile Devices:Equip warehouse staff with mobile devices such as wearable computers and rugged tablets to increase picking accuracy. For instance, rugged tablets integrated with voice picking ensure pickers confirm the items and quantities they pick as they handle items. This eliminates errors and increases the efficiency and accuracy of order pickers.
Strategy 3: Service is not a department. It’s a business model.
Today’s customer wants a level of hyper-personalized service that they cannot get when they order from e-commerce brand like Amazon. While most distributors may not have a data science team to help gather and analyze customer data, it is still feasible to deliver hyper-personalized services to customers.
As a supply chain best practice, leverage deep customer relationships and conduct regular feedback sessions to gather information about the customers’ businesses. Also, invest in analytics to accurately monitor customer behaviors in real time across all channels. These processes will help paint a detailed picture of your customers and offer them personalized services such as specialized pricing and intelligent suggestions.
Amazon’s inability to be an expert on every product it sells provides another opportunity to deliver a high level of personalized customer service. Leverage on-staff knowledge to provide technical expertise to customers and help them solve problems they don’t even know they have. In addition, maintain a good customer service levels by rewarding customers for regular ordering, responding fast to queries, and going the extra mile to ensure customers’ needs are met.
Skate to where the puck is going, not where it has been.
Wayne Gretzky’s words are worn-out because they wear well. The distribution marketplace is not static, and it takes strategy to plan for impending competitive threats. To stay in step with evolving demands and to grow market share, it is essential to look for ways to improve your business and serve your customers better.