Tag Archive: Amazon

The Amazon Effect Won’t Die!

October 4th, 2019

We have been writing countless articles about the Amazon Effect for many years as customers have the upper hand. In essence, if you cannot provide rapid, customized service with easy returns and ‘extra value’, you will be left in the dust. The needs aren’t going away. If anything, Amazon continues to raise the bar. Several companies such as FedEx, Walmart and others have announced same day and next day delivery. Target is redesigning stores and pick up areas so that customers can conveniently pick up purchases same day. Walmart is evaluating delivering groceries inside a customers’ home while they are at work. And, Costco has established a chicken farm to grow, slaughter and distribute chickens in an effort to eliminate the middle man for quicker, cost effective deliveries. However, this isn’t just about B2C and traditional e-commerce companies typically in industries such as consumer products and food and beverage. B2B companies expect Amazon-like service as well! Behind every B2B company is a person who expects B2C customer service.

Executives are still intrigued by the Amazon Effect. The reason executives still care is because it is getting harder and harder to remain competitive and profitable. For example, at the Manufacturing Summit, we recorded a series of videos from an Amazon Effect panel talking about these issues. Countless CEOs are expressing concerns about how to navigate these troubled waters. On the other hand, there are a few who are taking advantage of the situation to stand out from the crowd by becoming the disruptor instead of the disruptee. Which are you?

The Amazon Effect also teaches us that innovation is cornerstone to success. Not only does Amazon continually innovate and test new ideas, but some of these new concepts ‘stick’. As the founder of Netflix said, it isn’t that you set out to get the idea for Netflix and it is success all the way. The reason we are still talking about 3M and the famous sticky pad innovation is that it doesn’t happen that often, and 3M sets aside time and money for innovation as a part of their culture. Thus, we must get comfortable with trial and error. Of course, the error part is the problem. No one likes failure. Yet, it is just a part of the process. In fact, if you aren’t failing, you won’t succeed. Even Amazon fails. They test new markets, are willing to lose money and shut down programs. We just don’t hear about them as often as we hear about the latest and greatest new service or drone delivery! Are we really pushing the envelope far enough?

Have you thought about whether you have a culture that supports innovation? Check out our video series on innovation to gain some ideas. Gather your team to brainstorm out of the box ideas. Ask an expert to poke holes. Deliberately stimulate debate and organize trials. In essence, why not encourage maverick behavior within reasonable guide posts so that you set your team up for a “win”?

If you are interested in an Amazon Effect assessment with ideas to break from the mold, check out our free resources and/or contact us.

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The Amazon Effect is Still Going Strong

Eagle Eye Strategic Focus



How Are You Keeping Up?

July 9th, 2019

In today’s Amazon-impacted, data overloaded world, it is one BIG challenge to just “keep up”. How are you keeping up with the latest industry trends, noteworthy products, emerging technologies and more?

It would be easy to spend 40 hours a week just “keeping up”. Of course, I wouldn’t recommend that as your competition would be happy to speed on by. However, this idea got me thinking about how executives should “keep up”.

Time isn’t a resource. We cannot make more time. On the other hand, time is a matter of priority. When we answer, “I don’t have time for that,” it means we aren’t prioritizing that topic or that person. We cannot prioritize everyone and every topic including how to stay up-to-speed.       

A few recommendations for executives to stay up-to-date on relevant information without taking “too much” time:

  • Make it a priority for your team to stay up-to-date.  If each of your team members is up-to-date on relevant information for his/her area, it will be half the battle. Ask for a bullet point summary of highlights.
  • Talk with customers.  One priority you cannot delegate is a certain amount of customer interaction and discussion on trending topics. How else will you steer the ship?
  • Attend key industry conferences. Typically, there is a flagship industry event our clients attend. No matter how busy, make room in your schedule to attend, meet with customers and suppliers and find out what is trending.
  • Focus some attention on your strategic differentiation. For example, a few clients are expert at sourcing. Thus, they better put some focus on this topic. Others are expert at manufacturing, e-commerce or a technical topic. Stay abreast of key trends.
  • Skim industry articles & the Wall Street Journal. Staying current on key events and how they could impact your industry and your company is essential.



The Amazon Effect is Still Going Strong!

July 1st, 2019

The Amazon Effect remains top of mind with CEOs. Whether they compete directly (which is less than 1% with my clients), supply or distribute for Amazon (which is a slightly higher percentage) or are just impacted by the Amazon Effect, it is a major source of concern and/or opportunity. Have you thought about what Amazon is doing lately and how it might impact your business? Better yet, have you thought about becoming the disruptor?

Here are a few of the latest headlines about Amazon (all in the last few days):

  1. Kohl’s will accept Amazon returns across the board starting in July – The pilot programs in Los Angeles, Chicago and Milwaukee have been successful. Kohl’s and Amazon see this as a win-win.
  2. Amazon announced that one-day free shipping will be the standard for Prime members – It is very hard to go backwards once you get accustomed to a new level of service. All organizations watch out!
  3. Amazon is interested in buying Boost from T-Mobile and Sprint – There is no telling what Amazon is thinking of disrupting next.
  4. Amazon seems to be saying it isn’t a retailer – It appears as though the threat of Amazon purging thousands of smaller vendors from its core business is coming true. Stay tuned…
  5. Amazon makes a big splash in the travel industry – In India, Amazon will offer flight booking services.

Amazon gets a ridiculous number of headlines. In the interim, one of the last Sears stores in Phoenix had a massive closeout sale recently. Sears used to be the Amazon of the times 50 years ago but lost its way with a few strategic missteps and lack of innovation. Waiting around for Amazon to determine your course is not a wise move. Instead, think proactively about your strategic advantage and how you’ll get out in front of the crowd.

Think about what Amazon and other competitors do not do well.  Find a way to capitalize on these opportunities. Of course, you’ll have to adhere to the new model of doing business – rapid deliveries with short lead times and high tech opportunities.  Find what is unique to you and your product or service and drive differentiation in your market segment.

We find that there is significant change occurring across the board. Perhaps the reason some companies are vertically integrating is to do what Amazon cannot do completely at this point: take control over the complete supply chain. Amazon seems to be pursuing this strategy as well when it comes to transportation infrastructure although last mile delivery is quite the challenge. If you’d like to get an assessment of your business and profit opportunities as it relates to the Amazon Effect, please contact us.

 

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UGG Founder, the Amazon Effect in Healthcare & Why Demand is Key

The Resilient Supply Chain: What If You Sell More?

 

2019 Predictions Document

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Blockchain Service Has Gone Mainstream

June 11th, 2019

 

Although according to most experts, blockchain hasn’t lived up to its promise yet especially in comparison with IoT, robotics and more, it has just gone mainstream. Of course, who else but Amazon has just made blockchain service platform generally available. Undoubtedly, that will disrupt many of the techies running around to be the first at blockchain! With that said, big names such as IBM have poured a lot of resources into blockchain, so it is likely to go somewhere. For example, IBM and Syniverse just completed a pilot program for roaming solutions using blockchain technology.  And, IBM has interesting projects going with Nestle, Volkswagen, and Albertsons (the world’s 2nd largest grocery chain).

Have you thought about how blockchain might impact your industry?

What Should We Consider and/or What Impacts Could Arise?
There has been a lot of hoopla about blockchain for several years although progress has been slower than many other technologies. Regardless of how popular, it is important to understand key technologies that might impact your industry or your supply chain partners. Certainly, in blockchain’s case, it is relevant to industries where a chain-of-custody might be needed such as food. That is why two of the companies mentioned above relate to food, Nestle and Albertsons. Yet it doesn’t matter if you relate to food or another blockchain-related industry, it is quite likely your industry or your supply chain will be impacted in some way. For example, you might use the same supplier or transportation system.

The bottom line is to stay abreast of what might impact your industry, company, customers, suppliers and related geographies. Thinking ahead will enable you to take advantage of opportunities and successfully navigate around barriers. You’ll find more information on these types of topics on our resilient supply chain series.

 



Pricing & Profits: It’s Not All About Revenue

May 26th, 2019

According to CFO Magazine, Amazon’s profit doubled to a record $3.6 billion in the first quarter yet reported its lowest growth rate in quarterly revenue since 2015. In today’s Amazonian environment, subscription services such as Amazon cloud and Kindle services as well as disruptive forces such as the 3rd party seller services (clients worry about from the opposite viewpoint) are driving profitable growth for a company that once lost money continuously. Are you considering ways to ensure your pricing makes sense and delivers the results you intend?

 

It’s Not All About Revenue
Ask questions of your sales representatives, customers, marketing department, executives and competitors about pricing:

  • When is the last time you raised prices? Why are they at the level they are set?
  • Who sets your prices? Think carefully as this could lead to some interesting discussions.
  • Do you know how your prices compare to your costs? There are lots of reasons NOT to set prices this way but knowing this relationship is relevant.
  • How does your pricing stack up with the competition? Again, high or low is irrelevant but considering your strategy is key.
  • Since it has come up frequently lately, I’ll also throw in this one: Is your pricing so complex that your ERP system won’t support it? That would certainly be something to re-evaluate.

Pricing is an important topic, assuming you are interested in profitable growth. It is worth taking the time to ask a few key questions of your internal and external resources. Gather your executive team and put some focus on whether what you are doing makes sense and supports your strategy or if it is out of date. With the pace of change at an all-time high, reviewing this topic once every few years is by NO MEANS enough. If you’d like an expert to assess your situation to partner with you to achieve these types of results, contact us.

 

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