Learning from Amazon and Generating Ideas

Over the past couple of years there has been a number of initiatives, as well as much time and money invested, into ecommerce. While essentially everyone feels that this is an essential service to offer for longer-term growth (or survival),  Unfortunately success for many, if defined by percent of sales, is lacking, however, as an alternative order entry system, it can blossom. Some of the drive for ecommerce is due to Amazon launching AmazonSupply and now Amazon Business.

Once projects, commodities and recalcitrants (from a customer perspective) are excluded, however, online “hunt and peck” ordering may not be significant, however, as an eBusiness that utilizes product content to support multiple initiatives, direct customer and marketplace punch-outs or direct connections with customers through estimating systems and other initiatives including mobile for on-site changes / last minute needs … all could be significant.

Perhaps you can learn from Amazon. Perhaps they can be your “innovation generator” or broaden your frame of reference.

But it can take some time.  Amazon’s history may shed some ideas. Consider:

• The company started with books but always planned for product diversification as it initially considered 5 product categories. As part of your longer-term strategy, have you considered product diversification? For your online strategy, are you thinking of “one store” or “multiple channels” or “multiple sites”?  Amazon started with virtual inventory.  Could you?
• The company was incorporated in July 1994 (which probably means product content was developed sooner) and went online in 1995.  In other words, it takes time to develop a site (and back then they were not aesthetically pleasing and attracted a select audience as evidenced by the fact that the first order was for “Fluid Concepts and Creative Analogies: Computer Models of the Fundamental Mechanisms of Thought” (sounds like a niche book to a very specific type of person!)
• Sales come “slow”. For the first couple of months Amazon only sold $20,000 per month.  It takes time to ramp the business up and gain adoptees.  Building brand awareness communicating about the offering take commitment.  Amazon had the benefit that online was its only business. Electrical distributors need to be cautious of expecting significant returns for a number of years. This is a long term investment, akin to starting a new location.
• This was the beginning.  The company went on to make a number of acquisitions and expanded its offering.
• It also decided that, since it had invested in the infrastructure, why not be the host for competitors (and we’re not talking about Amazon Web Services).  Did you know that Amazon operates retail sites fro Sears Canada, bebe Stores, Lacoste, Marks Spencer (in the UK)? It used to do it for ToysRUs, Borders and Target.  Here’s the thought. Should yo u only be selling to your typical customers (i.e. contractors, industrial end-users, etc) or can you be supporting others. If you have pricing advantages, superior operational skills or other competitive differences and could make money selling to a different audience, should you? This could be a way to leverage your strengths.

And now comes a different method.

Many have heard of Amazon investing in additional distribution centers

And Amazon has upped the ante for delivery with Prime, Prime Now and now Prime Air. As well as how they utilize the United States Post Office. Are you reinventing your delivery systems? Leveraging other companies that do this better? Perhaps you’ve heard that Uber and some other services are getting into the delivery business. Maybe it doesn’t work for pipe and wire but could it work for smaller deliveries? Less expensively?

And now comes a report that Amazon is investing in “thousands of trailers” (the 18 wheel type).

They haven’t invested in cabs (yet). Notice the “advertising” on the side of the truck (and Prime is a great frequent buyer strategy for Amazon … Prime customers purchase more frequently, generate more revenue and more profit than non-Prime customers).

While they claim that this is for delivery to and between distribution centers, could it become the first step to a broader fleet that can handle local deliveries for larger items? Initially retail, potentially for the pro market (in the article they reference that Amazon may want to eventually reduce its dependence on other delivery services.)

If they become very efficient, could they do deliveries for their suppliers? Pick up and back-haul?

The point is that other industries represent learning opportunities to help set expectations, emulate, consider as “innovation” sources and much more. Just because they are in another “industry” or “go to market differently” doesn’t mean that there isn’t a potential application.

While others suggest that as an industry we need to “innovate”, perhaps alternatively we need to broaden our frame of reference and borrow from other industries. It may be new for this industry, but may not be “new”.

How can learning from Amazon help you differentiate yourself to capture incremental share?

Where do you generate ideas?