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Logistics & Fulfilment

Is it Amazon’s way or the highway?

By Carl Hartmann

If there was a word to describe the act of pushing boundaries, it would be ‘Amazon’. Amazon’s CEO, Jeff Bezos runs a tight ship; the business combines customer-centricity with a bold shipping and fulfillment strategy that rewrites the rules of commerce. In the company’s own words, there’s something that ‘makes Amazon peculiar’.

As the head of a shipping and fulfillment technology company, I find myself drawn to three of Amazon’s 14 leadership principles – as they’re prevalent in everything it does:

● Customer Obsession

Amazon isn’t afraid to say that it’s obsessed with customers, and it ain’t lip service; the company is known to dazzle customers. In our e-book, The Delivery Advantage, we touched on Amazon’s success with the Harry Potter launches – it kept its promise of the earliest deliveries and discounts at pre-launch.

● Think big

As Amazon (currently the eighth largest retailer globally) continues climbing up the leaderboard, it’s always kept its finger on the innovation pulse. Using design thinking, it tackled shopper friction in ingenious ways: from private label groceries to Amazon Go, a zero checkout bricks-and-mortar grocery store where shoppers gain entry and transact with a mobile app – all launched within a year.

While this is hard for many to emulate, thinking big can be applied in other ways. We know that 85 per cent of shoppers have admitted to abandoning their carts – with shipping being the main culprit. And yet analysts believe that 35 per cent of these carts are recoverable. So why not adopt Amazon’s approach to recovering lost opportunity by investing in better shipping experiences?

● Invent and Simplify

At the heart of Amazon’s winning strategy is how it’s reinventing the complex supply chain process. Its heavy investment into fulfillment centres, trucks and trailers, Amazon Flex delivery partners and the acquisition of French parcel service Colis Privé give it better control and market share. This streamlined, creative approach shows how the success of e-commerce is dependent on logistics. However, when retailers stick with outdated processes or unwieldy infrastructure, it creates delays and losses.

Recent, renewed speculation of Amazon’s plans to enter Australia, following its Q1 2017 launch into South East Asia via Singapore, indicates that the Seattle-founded giant could finally be ready to take on Australia, a country with its unique set of challenges.

Despite being almost the same size as the United States, our vast land has a fraction of their population across long distances. The fragmentation of our local logistics industry will also prove challenging should Amazon apply their ‘Fulfillment by Amazon’ model here.

Consumer expectations will sway upon Amazon’s arrival, but Australian retailers have home advantage. They’re familiar, and their existing online and physical footprints just need to be fine-tuned. We can’t stop change, but we can seize the day.

Carl Hartmann is co-founder and CEO of Temando.

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