Question: How many people use Amazon?
Answer: Tooooooo many if you are a competitor of any kind.
Amazon’s domination of the retail and now B2B distribution industry is as well known as Jeff Bezos’ badass quotes. One of particular significance to this blog posts is this:
“What we need to do is always lean into the future; when the world changes around you and when it changes against you. What used to be a tail wind is now a headwind – you have to lean into that and figure out what to do because complaining isn’t a strategy.”
Amazon continues to innovate and drive next-generation services for today’s consumer, including its recent launch of ‘try before you buy’ fashion in the UK, a feature that allows subscription members to try up to eight items before they commit to the purchase, once again changing the game for online B2C shopping.
It’s advances like this that have been forcing retail and ecommerce companies to re-evaluate their business operations in order to deliver on the consumer expectations Amazon has created for years.
But what about the business-to-business world? Perhaps less well known, but equally as prevailing, is Amazon’s recent move to B2B with the launch of the Amazon Business platform, a B2B marketplace where “more than half of Britain’s biggest listed companies” are buying their everyday office supplies according to a recent article in The Telegraph, and it is expanding rapidly across key territories in Europe. This evolution in Amazon’s portfolio is putting the same pressure on wholesale distribution and manufacturing businesses that retailers are now well accustomed to.
Launched in 2015, Amazon Business is already generating over $10bn in annual revenue. It hit $1bn in its first year alone in the US, and within its first year in the UK it had more than 100,000 customers. Check out this fascinating infographic by Oracle NetSuite charting the path to date. In 2017, Amazon Business in Germany was reported to have more than 50,000 business customers and 10,000 sellers, just one year after launch. It is undoubtedly a platform to be reckoned with. Wholesale distributors and manufacturers must pay attention if they are to effectively compete in this new age of B2B selling, or risk losing customers to Amazon.
What can wholesale and manufacturing companies do to compete?
Amazon attributes the success of Amazon Business to “the way it responds to customer needs” according to the UK Head of Amazon Business, in a recent article on The Telegraph. It is this sentiment that wholesale and manufacturing businesses must adopt if they are to compete in this new era. The customer is, and always has been, at the core of everything Amazon delivers. Using data to deliver a personalised experience, reacting to changing customer demands, influencing customer behaviour, and putting the customer experience first is what has propelled Amazon to the top of the retail world. And there is no doubt this ethos will be carried through to its B2B business.
If wholesale and manufacturing companies are going to stay in the race, they must give their customer base the same treatment, enabling the business to deliver on the needs of today’s B2B buyer. Technology is at the very foundation of this. Without the right systems in place, wholesalers and manufacturers will struggle to deliver the same level of service that Amazon Business can offer, and will expose themselves to a potential migration of customers to Amazon. To deliver the Amazon experience and respond positively to the Amazon Effect, manufacturers and wholesale distributors need improved business visibility of both customer behaviour and the business operations, strong inventory and order management and the ability to deliver personalised marketing campaigns. This should all be tied together with one integrated system that allows real-time visibility and enhanced business intelligence that will support continued growth and enable them to deliver on the expectations of the B2B buyer.