Can you even remember the world before Amazon Prime? That world where you would wait weeks for nearly forgotten purchases to appear on your doorstep. However, that’s how it was. It wasn’t unusual or at all unreasonable to wait five to seven business days for packages to arrive. And, delivery on a Sunday? Unheard of! It begs the question, “Do we appreciate purchases as much when have to wait for them?” Well, we can’t get into the psychology here, but we can certainly identify how it has affected consumer buying behaviors and expectations over the last 10 to 20 years.
What the “Amazon Effect” Means for Society
The shipping world could aptly be a reality TV show called, Keeping Up with Bezos. The “Amazon Effect” is defined by Investopedia as, “the impact created by the online, e-commerce or digital marketplace on the traditional brick and mortar business model due to the change in shopping patterns, customer expectations and a new competitive landscape.” Let’s unpack that.
The “Amazon Effect” affects the brick and mortar storefronts (where, ironically, consumers can get their purchase immediately). But, it also impacts consumers and providers, and specifically consumer buying behavior. Consumers are able to shop from the comfort of their homes and compare prices and deals at competing sites as well as find and use coupon codes with ease. Since consumers know they will receive their purchases in a shorter amount of time, they are less likely to hesitate on “pulling the trigger” so to speak.
Consumer expectations have also changed. Many consumers will not purchase anything unless they can get it delivered free and with overnight shipping. In fact, CNBC conducted a survey and 43 percent of the people surveyed said the most important factor of online shopping was receiving free shipping. In a landscape where expectations like overnight, weekend, and 2-Day shipping are the norm; they can’t go much higher, right?
The Future of Even Faster Shipping
Consumer demand and expectation are only increasing, so how are shippers and companies supposed to keep up? The answer is supply chain. Now, many companies are already close to the top of what they think they can do; however, a solution may come in the way of demand chain.
Demand chain is where production is localized and immediate. Instead of projecting a demand for products, there will be machines at key locations where goods will be needed. The machines will then produce the products, which can be shipped immediately. This creates a faster delivery system and no inventory to carry. Of course, companies will still need to project the need for the raw goods the machines will use and employees to provide the human-touch aspects of fulfillment. So, the machines aren’t taking over…yet.
When it comes to optimizing shipping to meet consumer expectations, many businesses are turning to a 3PL. Third-party logistics providers are valuable partners with seemingly limitless experience and the most cutting-edge technology. Merchandise Warehouse routinely helps companies find solutions that delight customers and maintain profit while “keeping up with Bezos.” Contact us today to learn more about how we can help.