Amazon captures more than 30% of all e-commerce activity. Most people today have likely used its services at least once. As an innovator in customer service across multiple industries, this market giant has forever transformed the face of retail as it is known today. Thanks to the Amazon Effect, innovative supply chain strategies and state-of-the-art technological deployment have become the norm rather than the exception among industry leaders.
On the surface, the Amazon Effect is the new standard of excellence that all customers have come to expect following the break-neck speed and low-cost, if not free, shipping associated with Amazon purchases. Fast and free reliable shipping became the norm for consumers, putting pressure on retailers to pivot their own logistics to compete at the same level as Amazon.
The “Amazon Effect” continued to make an impact on other industries, as the company continued to up expectations in the online shopping experience. Their technology innovation revolved around their customers, putting them at the heart of the entire experience from research to final delivery. Retailers are no longer expected to offer an efficient, customer-centric online shopping and delivery experience, but even industries that are more likely to cater to not a consumer but another business entity. This includes the industrial space as business-to-business buyers in procurement, who have experienced shopping experience on Amazon, have come to both expect and demand a similar buying experience in their professional lives.
The online retailer’s history reads like a textbook for rapid growth and unrelenting technological advancements for the modern supply chain. It has altered the way people think about online purchases and shipping, forcing competitors to scramble to keep up with its innovative services. This is the power of the Amazon Effect: the access to a great customer experience, ability to see shipment status and detailed notifications of the forthcoming shipment which yields fast, reliable, affordable, guaranteed shipping, all without sacrificing customer service and overall quality or value.
Shipping is only one piece of the overall customer experience, which also includes a continuously refined user interface that makes the site easy to navigate and offers intelligent recommendations so consumers see products relevant to them. Increasingly, no industry is insulated from the Amazon Effect. That they receive their orders quickly and cheaply is the icing on the cake.
The Relationship Between Customer Satisfaction and Growing Profit Margins
Amazon has become the quintessential example of customer experience and quality service as a leader in on-demand shipping services. Thanks to the Amazon Effect, it has become a favorite choice for customers thanks to its proven track record, innovative offerings, and game-changing supply chain practices. And customer satisfaction drives profit growth. Thus the combination of data-tracking technology, a never-before-seen network of warehouses, advanced inventory management systems, and customer-driven transportation features has made Amazon a household name. The Amazon Effect has created a modern supply chain that has proven to be the most efficient among all domestic and global shipping services today.
Shipping Demands Pushed by Amazon Are Becoming the Norm for the Consumer Market
Amazon has been around for years and has become such an integral part of daily life it is hard to remember a time when it wasn’t the industry leader. In 2005, the Amazon Effect started to lay hold when the company launched its Amazon Prime service. The inclusion of free next-day and two-day shipping options sent shock waves through the consumer market and logistic service providers. It quickly became the primary service Amazon was known for offering. This one service is what established the dominance of Amazon within the modern supply chain and the online retail industry.
And consequently, the competition was disrupted and had to rethink their operations to compete. The status quo customer experience that had traditionally worked became unacceptable. And that’s what created a standard of excellence for the customer experience, inclusive of fast, free shipping and that would effectively pay itself through Amazon Prime. In this narrative, as in reality, the ultimate result in improving the customer experience.
Other shipping services and online businesses, in general, had to fight to keep up and maintain something of a competitive edge. Consumers today expect free or very affordable shipping rates and generally want the fastest shipping times available. Thanks to the Amazon Effect, today’s consumer market has firmly established on-demand customer service and fast and free shipping as the minimum expectation.
How Customer Experience Affects Profits, Growth, Expansion, and Networking
The growth seen thanks to the Amazon Effect is unlike anything ever seen before in the industry. According to a report from The Balance Small Businesses, “by 2018, [Amazon’s] revenue reached almost $233 billion. Amazon is the fastest company to reach $100 billion in sales revenue, taking only 20 years. From its inception, Amazon has been growing approximately 20% per year. It grew by over 20% from 2018 to 2019. Currently, it enjoys nearly 14% of gross global e-commerce sales.” Consumer experience affects profits, growth, expansion, and networking from start to finish in many ways. Several factors drive the Amazon Effect forward in today’s market:
- Automation within shipping and tracking systems
- Management services within the supply chain
- Customer service offerings for customers and partners
- Warehouse logistics and expansion initiatives
- Shipping advancements improve delivery guarantees
- Innovations throughout the entire supply chain network
- Communications inside and outside the network
- Focus on both short-term and long-term goals
Follow the Lead From Industry Giants and Partner With Leaders in Collaborative Logistics
Taking advantage of the current industry trends and the continual growth of the e-commerce market hinges on providing the best shipping service available. Amazon focused its efforts on the customer experience and that led to a “Gold Standard” for what customers can expect. For the everyday business, even those that may not understand or apply Amazon’s strategy to last-mile delivery, there is an overarching theme. By creating a better experience and keeping everyone on the same page, it will build brand loyalty to help combat the Amazon Effect.
Obviously, The Amazon Effect clearly demonstrates the power of innovation and customer influence within the market today. Partnering with leaders in logistics, automation, and collaborative logistics can help ensure future growth. The same patterns apply: better experiences mean more customer loyalty and more business, which gives you more resources and more customers to delight, which compounds further and further like the flywheel. Maintain a competitive advantage with an innovative system from the Turvo experts. Connect with Turvo to learn more.