It seems like every day I see a story about a new service, product or feature that Amazon is bringing to the market. All this news can be summed up in one way: Amazon doesn’t follow the leader, they are the leader. They consistently transform their business to match what their customers want, and they do it quickly.
Most recently, Amazon made headlines when news broke that they are further expanding their “seller flex” trial (now Fulfillment by Amazon Onsight), meaning the company is increasing initiatives that allow them to ship directly from their merchants’ warehouses. This permits Amazon to provide additional conveniences to their customers (faster and cheaper shipping) without adding extra inventory, complexity and operational efficiencies to their own warehouses.
Also making news is Amazon’s roll out of a new service called Shipping with Amazon, or SWA. The mission begins with sending SWA drivers directly to Amazon’s third-party retailers and warehouses to pick up parcels and deliver them direct to customers, reaching into the pockets of other delivery services such as FedEx, UPS and USPS.
Right now, e-commerce companies are being challenged to manage the competing objectives of keeping costs down while pursuing a significantly faster fulfillment network that meets the needs of their customers. You might not be able to build your own fleet like Shipping with Amazon, but you do have options.
Reframe your thinking
You don’t have to be the biggest company in the world to come up with innovative ideas that create the perfect customer experience; however, you must reframe how you think about your customers’ needs. Amazon’s number one core value is “customer obsession.” Why? Because it matches their objective to create a loyal customer base, keeping them coming back time and time again. That’s how they create these fulfillment ideas and why we, as consumers, love them so much. Through this obsession, Amazon realized that their customers wanted their products quickly and cheaply, which got them thinking about what they needed to do in order to create this experience. And voila, we now have Amazon Prime, Fulfillment by Amazon Onsight and Shipping with Amazon.
To Amazon, shipping isn’t valuable because it saves them money — it goes beyond the box. Shipping is valuable to Amazon because it’s valuable to Amazon customers, meaning they treat shipping as a competitive advantage in service and experience, not price or operational efficiency. For example, if we think of Amazon Prime as free two-day shipping for your best customers (how another retailer might see as a business rule), then Prime loses money every time. But if we think of Prime as a competitive advantage in service, it wins. Did you know Amazon’s best customers spend almost double as what as non-Prime members spend every year?
The gap between customer expectation and shipping capability is ever growing. We see Amazon bridging this gap, but how can you?
You have options
Bringing your stores into the shipping mix can significantly reduce transit times to the end customer without the need to add additional infrastructure. But, there are other possibilities.
Have you thought about adding last mile carriers to your network? This can be especially advantageous in improving your speed of delivery, giving your customers more options to choose from. Or, is peak season a pain point for you? Take advantage of seasonal carrier offers and conditions (such as expanded delivery days) with Advanced Date Shopping, an extension of rate shopping, to move more product and delight customers. If you’re worried about carrier busyness you can utilize Carrier Volume Balancing in order to turn off a carrier service if it’s too flooded to guarantee deliveries to certain locations.
The list of features and business rules available for use is endless. In order to be successful in choosing the right options for your business, you need to put your customers first. Which options enhance the customer experience at the cart level? The delivery level? If your best customers spent more money and your site visits had less cart abandonment, what would that mean to your business? Choose the features that build a loyal customer base and you can win like Amazon.
Old industry, new opportunity
We’re living in a different era. Today, the mobility of commerce has inspired a new generation of shoppers, a generation that is united by their collective desire to experience the world on their own terms. Your job? Chances are your customers already love the products you have, so find the ways in which you can keep those customers coming back: getting their orders to them quickly and cheaply. Invest in the shipping experience as a service, not a back-of-house operation.