The Amazon Effect: What is It and How It’s Impacting E-Commerce Logistics

By: | February 7th, 2020

Image by Gerd Altmann from Pixabay

There was once a time where if you didn’t want to shop at a physical store for something, you could order it from a catalog book. Then there was a time where if you wanted to order something, you could call and order it from your TV. Now, if you want to order something, you can order it from your laptop, desktop, tablet, or mobile phone!

That just goes to show you just how much the times have changed and how far technology has advanced. Online shopping has even come a long way, especially from a delivery aspect. When online shopping first came out, if you ordered something online, you had to wait anywhere from six to eight weeks for it to be delivered!

In today’s digital age, you can order just about anything from anywhere and have it delivered the same day with just a tap, swipe, or click of a button! Talk about instant gratification! So what is this digital phenomenon, you ask? It’s called the Amazon effect, and it’s thanks to the major growth in e-commerce businesses.

According to CNBC, the total market share of online retail sales hit an all-time high, beating out general merchandise sales for the first time in history as of February 2019, and the sales are only expected to grow! The fact that online shopping has made such a major impact on the market, everyone with a great idea is trying their shot at becoming an e-commerce business owner.

If you think about it, getting started isn’t all that difficult. If you have a great product that you know will sell and meet the needs of customers, all you need to do, in short, is purchase a domain name and find a website builder to host your business site, oh and you can forget about business insurance… you’ll definitely need to find a reliable business insurer. There’s obviously more that goes into it but that’s the winning formula that contributes to the Amazon effect.

There’s no denying the fact that the Amazon effect has been an unstoppable phenomenon that has completely changed the retails industry for not only customers but also for brick-and-mortar businesses as well. Because of its dynamic impact, you can only expect it to drastically revolutionize the e-commerce market and cause a shift in logistics. But the real question is how is the Amazon effect shifting e-commerce logistics? Well, let’s get to the basics of what exactly the Amazon effect is.

What is the Amazon Effect?

First and foremost, the Amazon effect is obviously named after the dominating e-commerce machine, Amazon, but the actual Amazon effect is the negative impact of online shopping for brick-and-mortar businesses… It’s great for e-commerce businesses but brick-and-mortar businesses have suffered greatly from it. Can you guess what Amazon has defeated physical stores the most in? It’s customer expectations.

The thing about customers is that they want what they want, when they want it. What does that mean? It means that customers want the inventory of products to be available whenever they want to order something; It means they want to be able to track their packages in real-time… and those are just a few customer expectations but the Amazon effect meets those expectations and more… In a sense, you can say that the Amazon effect has spoiled customers by giving them things that brick-and-mortar businesses just can’t compete with.

It’s pretty safe to say that from a customer expectation standpoint, the Amazon effect is positively impacting e-commerce but it’s making brick-and-mortar businesses fall behind. Let’s take a more detailed look into the Amazon effect from the customer expectations point of view.

Customer-Centered Focus

Whether a customer is shopping online or in-store, they want to feel special and have service with a focus on them. Well, you can easily give customers a great shopping experience in the store but with online shopping, business owners have to take a more customer-focused approach when providing a great online shopping experience.

Things like personalization contribute to more than half of customer purchases. A study revealed that if an online retailer recognizes a customer by their name or recommends new items based on past purchases, they’re more than likely to make another purchase. So, when running an online business, make the customer feel special and build your site and your marketing efforts with a customer-centered focus.

Unlimited Inventory

How many times have you gone into a store and seen a shirt you liked but they didn’t have any more in your size? It’s definitely happened more than once, to say the least, but at that moment, you were pretty disappointed, right? Of course.

Well, in the minds of customers, that’s to be expected in brick-and-mortar retail stores but online stores shouldn’t, and in most cases, don’t have that issue. Why? Because the expectations have been set by customers and e-commerce businesses are conforming to their expectations to keep them satisfied and a loyal shopper.

Lightning Speed Deliveries

It was mentioned earlier that people used to have to wait six to eight weeks for their packages to be delivered… well, wait times like that for an e-commerce business in this day and age is like e-commerce suicide! E-commerce business owners heard the complaints of customers in that matter and worked very hard to remedy the solution, with the help of advancements in technology.  Because technology has played such a pivotal role in the growth of e-commerce, Amazon has taken customer satisfaction to a new and improved level.

Amazon partnered with DHL and Audi to test a pilot program that would deliver packages to the trunks of Audi cars. This pilot was only tested in Munich but Amazon stated that if the testing went well, they’d be making the option available for Amazon Prime members all over the world.

That just goes to show you the lengths that innovators are willing to go to enhance the customer’s shopping experience. You may not live in Munch or drive an Audi to receive this type of package delivery but you can order an item online and receive it a few hours later, depending on how late you ordered it.


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