This is why Amazon’s move might have a much more profound implication. It’s not just about Amazon’s reliance on UPS or FedEx. It’s the fact that Amazon might become the underlying logistic operator for many industries.
Still, Amazon can’t best a tightly implemented logistic operation. Now is the time to invest heavily in upgrading your business’s logistic structure. The goal must be seamless scaling capabilities and decreasing delivery times.
There is a need for better automation, tracking, and autonomous technology. On top of this, predictive software, aided by Deep Learning, will become mission critical.
There is also another space Amazon isn’t aiming for, that other companies could exploit and defend. Last mile delivery.
It still surprises me the lack of interest and focus most companies pay to the last mile delivery. A user doesn’t care how you transport something, as long as it gets to its destination fast enough. Nonetheless, it doesn’t mean they don’t care about the last mile integration.
Companies need to focus on that part of the logistic chain. They need to create real-time last-mile tracking systems. Predictive models that can optimize for the bests routes for local deliveries. Automatic sorting, scheduling, and management of unsuccessful deliveries.
Startups are dabbling in this space; I know at least a couple just in Spain. However, not enough companies are taking this issue seriously. Product quality isn’t the only metric anymore. Product-driven markets are long gone. The current status quo are customer driven markets. And customers care about last mile delivery. Customers care about the delivery experience. Customers care about delivering companies that deal correctly with ‘unsuccessful deliveries’.
If you make me chose between a food delivery service that keeps my food warm or a cheaper one that brings it cold, I’m going for the warm one. Telling a customer they weren’t home when they were, won’t be tolerated much longer.
So I hope Amazon’s move serves as a wakeup call for all those businesses that are in need of robust logistic operations. Here are some key points companies need to think about.
- Invest in upgrading your systems now or face ostracism.
- Upgrading won’t be enough though. Current fast-moving markets require serious innovation of the logistic layer.
- Design user-friendly customer interfaces so that the end user can track last-mile delivery of your goods seamlessly.
- Build last-mile predictive models to allow for better delivery routes and resource management.
- Start investing in the use of autonomous vehicles. Both in the warehouses and for the last mile deliveries. Relying on humans for scale and speed won’t cut it much longer.