It’s not news that the traditional retail industry is in the throes of existential change as they seek to adapt to the rise of online commerce and the omni-channel strategies they’re employing in attempts to retain market share. Here’s some reporting on two recent articles about the major plays being made by titans Amazon and Google and some analysis on what these seismic events portend for the traditional retailer.
Food Logistics reported last week:
“Amazon continues to invest the capital and the resources to create a global logistics network that will soon become capable of three-day deliveries to nearly anywhere in the world… It’s part of a strategy to make Amazon the largest third-party logistics (3PL) provider worldwide. Amazon’s model, now backed by a fleet of branded semitrailers and cargo planes, will push more inventory through the supply chain and increase Amazon’s purchasing power. The fleet of planes based in Ohio gives the company more control of the last mile, and lower costs through practices like cross-docking. More than 120 warehouses worldwide will allow Amazon to leverage volume to reduce costs.”
With its gigantic fulfillment capabilities, Amazon is poised to make significant impact on the face of the retail industry. And they’re being given a run for their money by another tech-savvy behemoth – Google. According to ARC’s Chris Cunnane, Google is also making a play for last mile supremacy which is critical to retail ecommerce. It was more than a year ago that Cunnane detailed Google’s plan:
“Google’s model is different than Amazon. Google does not have distribution centers around the country, nor does it want to. Instead, Google contracts directly with local stores to provide same-day delivery (mostly). The advantage for Google here is that it can keep adding new partners without worrying about inventory carrying costs. As part of Google’s Shopping Express, customers can sign in through their Google account, use their Google Wallet to pay for the purchase, and select a delivery timeframe. Overnight deliveries are offered in select areas where same-day delivery is not offered.”
What is absolutely clear is that Amazon and Google are both applying their enormous technological power to their pursuit of a new paradigm in retailing. Does this mean that there will no longer be a significant role to be played by the traditional, brick-and-mortar retailer? Absolutely not! Just as radio didn’t kill print, TV didn’t kill radio and the internet didn’t kill TV, there will still be a market for traditional retailers. But only the ones prepared to compete on a new battlefield.
Forward thinking retailers have been rising to the formidable challenge by pursuing omni-channel strategies which include a wider array of sales channels and fulfillment options designed to compete on the same field as Amazon and Google. These strategies cannot and will not be successful without significant technological support in the form of logistics IT solutions like TMS, optimization tools, YMS and private fleet management tools. The retailers that secure their place in tomorrow’s landscape are the ones investing in Logistics IT solutions today.