The Amazon Effect: It’s not Just for B2C Anymore

Whether literally or figuratively, pretty much all organizations are in some way competing against online companies like Amazon. Its original footprint may have been squarely placed in the business-to-consumer (B2C) realm but this e-tailing giant has since spread its wings across the business-to-business (B2B) category.

And while Amazon may not be using breakbulk rail to delivery grains to food manufacturers or delivering tankers filled with hazardous chemicals to steel producers, its influence is still being felt in these and other industrial sectors. That’s because the underlying assumption that shipments are going to be delivered quickly—and that buyers will be able to trace them as they move through the supply chain—has made its way into the industrial sector.

After all, the same customers who are buying industrial products are also shopping online; ordering pizza and tracking the process from oven to delivery; and watching their Uber driver circle their workplaces in search of a parking spot—all right on their mobile phones. Expecting a similar experience in any setting, these customers are pulling B2B companies into the digital landscape.

The proof is in the numbers: According to a recent industry survey on the Amazon Effect, nearly 78% of professionals said their Amazon experience has raised their expectations for all deliveries, and one in four consumers said same-day delivery is very important even for household items. Nearly 40% of consumers said they expect local stores to be able to deliver household items the same day.

Half of people surveyed say accurate ETAs are extremely important (less than 7% say they are not important). However, they also said local delivery fleets are not consistently communicating with customers on delivery status.

The amount of time that companies have to deliver a package is also shrinking. For example, Business Insider says the maximum amount of time considered acceptable to wait for a package is now just an average of 4.1 days (down from 5.5 days six years ago). And, Amazon Prime members expect packages nearly a day earlier than non-members.

“As two-day shipping becomes the online shopping norm, Americans are getting more and more impatient, expecting there to be fewer and fewer days between the date they order and the time when the brown boxes and yellow envelopes start arriving,” Business Insider points out.

In What All Businesses Can Learn from Amazon’s Supply Chain Effect, Sourcing Journal says that the war of faster delivery now extends across the entire supply chain. “Mills, manufacturers, and other suppliers aspire to build a sourcing matrix that provides the flexibility that is needed in today’s fast-paced marketplace with ever-growing demand,” it states.

“Customers have enthusiastically adopted that two-day shipping mentality, bringing it from their own consumer experience into the workplace,” the publication continues. “They now want to know why they can’t get a sample in two days, why they can’t get fabric choices within the same amount of time, and why shipping in general is taking so long. This represents a marked change from the longer turnaround times previously considered standard.”

The problem, according to Commercial Carrier Journal, is that meeting these customers’ new visibility requirements is difficult using traditional tools like electronic data interchange (EDI). But as more supply chain professionals are carrying their experiences with B2C sites like Amazon over to their work lives, demand for advanced technology and visibility tools is growing.

“Everybody is expecting shipments to be like Amazon with complete visibility,” one 3PL leader told CCJ. “They want data and they want it yesterday. Whether it’s the Amazon Effect or another form of consumer expectation, it is a standard that we have no choice but live up to,” another shipper added.

By blending tracking data from electronic logging devices (ELDs), back-office systems, and mobile applications that carriers use to provide a central dashboard for monitoring shipments in transit, freight visibility platforms are helping to fill in those gaps.

Online portals also go a long way in helping B2B firms “act” more like their B2C counterparts. “Even small and mid-size shippers expect transportation providers to have a self-service web portal they can use to track shipments and do other routine transactions,” CCJ adds.

In absence of adequate time and proper management, issues like service redundancy, wasted labor, and costly missed deadlines can significantly impact a B2B company’s bottom line and customer relationships. “For instance, if a delay from one vendor on a particular fabric means losing your spot on the manufacturing line, which causes a missed delivery date to your biggest client,” Sourcing Journal states, “it’s going to have an impact on your bottom line moving forward.”