The Amazon Effect

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I've been an avid Amazon Prime member for years. As someone who traveled 100+ nights a year, the ability to purchase anything from batteries, to water filters, to soap while traveling and have it waiting at my door when I got  home was a lifesaver.

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Tony Corley is a Sr. Product Marketing Manager at Epicor.

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I've even used Amazon Prime during vacations when we realized we completely forgot a critical, must have, had to find component -a  2XL ski helmet. Try finding that bucket-sized helmet at a ski resort! And I'm not alone in being an avid member. At a recent distribution industry event I attended, more than half of the people in a session indicated they were Prime members. So, what's Amazon's secret to success?

It's easy to  think that the Amazon Effect is just online ordering -  the ability to shop from your pc or phone or tablet, from anywhere in world. But it's more than that -  it's about knowing your customer, understanding their needs, and making the overall customer experience easier. Basically, making it more convenient for the customer to purchase from you. When you think about it on that level, that's the secret to competing with Amazon and something distributors are known for.

Let's look at a few  areas where distributors can - and do - compete well with Amazon and some ideas for  improvement:

  • Product Knowledge
  • Product Selection
  • Delivery/ Pickup

The Amazon EffectProduct  Knowledge
A customer once told me that information about the product was more valuable than the product itself. I think this is an extremely important point for distributors. Even with all the research tools available online, the product expertise of counter and sales staff at distribution businesses is a differentiator. Being able to understand the customer needs and provide the product or service is vital. You can't pick up the phone, call Amazon, tell them your problems, and get a solution.

There are additional tools in your ERP system to give your employees access to information they can leverage. Ensure you're using the accessory item and substitute item function in your system and, when possible, link images and specifications documents to your item.

Product  Selection
Even though Amazon sells virtually everything, I'm still not convinced they will ever provide every item that a customer needs. If you think about the day in the life of typical contractor, calling or stopping by multiple supply houses takes time - and time is money. Providing a broad and deep product selection allows a customer to get everything they need in one-stop is critical.

This has always been a strength of independent distributors but there is always room for improvement.  I was recently at a distributor who has made a focused effort to better understand back orders. They are choosing to do more than simply looking at the internal aspect of why they didn't have the item. Instead they are using the back order as a customer service opportunity, reaching out to the customers to understand the impact on their business and identify any other product needs the customer has. This is a great way to turn a negative into a positive.

Wholesale distributors have offered delivery services similar or better than Amazon Prime delivery for years, including the ability to deliver at specific times of the day. It's important to continue to leverage this service - but  why stop there?  Examine your counter and will call areas to  see if there are ways to streamline the process for  your customers. A great example is a drive through will call / pickup area. This is an example of something more and more forward thinking distributors are offering. If it works for  fast food, why not for distribution?

At the end of day, maybe we can all learn a little from Amazon about customer service and get the 2XL helmet we need.

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