Outsmarting the Amazon Logistics Onslaught

This morning it occurs to me there is a business model that just might disrupt the disruptor – Amazon.  Maybe, and that is a strong MAYBE - but hey, it’s worth exploring.

One of the highly successful strategies of Amazon has been to embrace technology and to build a persistent and progressively compressed logistics capability.  Two day delivery, one day delivery, same day delivery and drone delivery – we’re all aware of the ever shortening delivery cycle from Amazon.  This entire process generally brings a great customer experience (minus delivery failures, etc.)

This highly sophisticated logistics system is impressive, disruptive to competitors and moves entire industries to try and compete on the terms and capabilities Amazon has built – and continues to build.

So what if there is a strategy that disrupts the great disruptor?

I’m not saying there is or guaranteeing there is – but let’s play with the idea for a moment and you can decide how or IF this is a thought that warrants consideration for your business or industry.

The Amazon model has compressed and continues to compress the time from order placement to order fulfillment.  What if the bunker head you need to disrupt the disruptor is to change the order in which the customer experiences the order fulfillment process.  Huh?

Yes, instead of compressing the time from order placement to order fulfillment, reverse the order of the customer experience so that order fulfillment happens before order placement.  Sounds weird right?  And is it even possible?

Yes – I would suggest this is possible – and maybe even more advantageous to the customer than the ever persistent and impressive delivery capabilities of Amazon.

Fastenal has 100,000 (and growing) vending machines installed at customer locations.  This army of equipment is positioned as a vending “platform”.  The machines are free, but do require a service agreement and software.  Machines are serviced and product is delivered to those machines on the customer site – before the customer places an order.  Product fulfillment is instantaneous from the vending machine, supplies are re-stocked based on customer buying patterns and multiple configurations of the machines are available for a wide variety of products.

In the simplest terms, the warehouse has been distributed to customer sites, big data analytics can be used to analyze and predict customer needs and product fulfillment occurs before an order is place by the customer.

Is there an impressive array of logistics capabilities (ala Amazon) built to support these 100,000 distributed inventory locations?  Yes, there is, but the order placement and order fulfillment process is just the opposite of the currently dominant Amazon model.

Can this solution work for your industry?  Perhaps, I don’t know - but it is fundamentally different than the Amazon model and may be one of the solutions worth exploring that helps your company compete and win in an Amazon disrupted world.