IT in Logistics

Industry View: Is Prime Day the start of a New Peak Season?

10th August 2018

Johannes Panzer (pictured), Head of Product Strategy for Ecommerce, Descartes Systems, says it might be and that businesses need to be fully agile…

On July 16th the hotly anticipated Amazon Prime Day kicked off, running for a total of 36 hours it was the longest Prime Day sale to date. In addition, this year, Amazon extended its reach by adding four additional markets; Australia, the Netherlands, Luxembourg and Singapore, making this sale the companies “biggest global shopping event in it’s Amazon history”. So, is the event spilling over to its competitors to create a new peak season?

The e-commerce mega-sale was launched four years ago in a bid to compete with the likes of Black Friday and Cyber Monday. Since 2014, figures have revealed a surge in imports ahead of the summer season as online retailers prepare for Prime Day. It could be argued that the Amazon effect is truly in action and will continue to gain momentum as participating retailers proactively import inventory ahead of Prime Day. Another key indication of the rise of a new peak season is highlighted by the increased amount of competing retailers timing sales close to Prime Day with similar deep discounts and quick shipping offers.

The Amazon effect in action: meeting customer expectations
Simply stated, the Amazon Effect is the ongoing evolution and disruption of logistics, supply chains, retail, consumer behaviour, markets, and more since Amazon’s debut in 1994. Take consumer behaviour for example, Amazon habituates consumers to expect a near frictionless shopping process. The e-commerce giant has helped to solidify the expectation for fast delivery, visibility, communication, and straight-forward returns.

Therefore, competing retailers must be fast and agile using digital systems. Peak seasons underscore the need to automate operational processes in the warehouse, ensure inventory visibility, connect to carrier platforms, deploy effective mobile-enabled solutions within the Warehouse and for drivers and implement an effective home delivery program – while seamlessly communicating with consumers. It is only by effectively streamlining internal operations that today’s online retailers and their logistics service providers can meet customer expectations.

Gearing up for Prime Day
While Prime Day is one option for online retailers to improve sales, it’s still critical to deploy a diversified sales strategy to stay agile. A best-in-class approach calls for systems that can automatically consolidate orders through a central platform regardless of sales channel, print shipping carrier labels, stream information into internal systems and confirm delivery options in real time. By applying a holistic approach to growth, tapping a broad range of marketplaces and channels, it’s easier for retailers to secure a sustainable business beyond peak.

In order to automate in-house logistics processes so that online vendors can be better prepared to meet delivery expectations, whilst cutting cost and reducing errors, a flexible and scalable Warehouse Management Solution (WMS) is essential. With the right WMS, online retailers can also meet requirements for the Amazon Seller Fulfilled Prime programme, and manage Amazon Prime orders accordingly, automatically importing and placing them on a fully-optimised list for picking.

With real-time, end-to-end supply chain visibility, retailers can deliver great customer experience and make important efficiency gains. Advanced route optimisation can, for example, transform the performance of in-house and third party transport operations with impressive efficiency gains – John Lewis Partnership increased their delivery capacity by 35%. However, this must be as part of a bigger picture, taking into account demand and ownership of all deliveries in order to best benefit from the efficiency gains to be had. This is where the WMS comes in.
Conclusion

The challenges posed to retailers to fulfil faster, more flexible delivery options at no extra cost are well known within the industry, and organisations of all sizes are under increasing pressure to find greater efficiencies within their supply chain in order to compete. With a dedicated e-commerce WMS, more organisations can become operationally ready to better fulfil orders, reduce error rates, reduce costs, increase sales and most important meet and exceed customer expectations.

In some ways, the Amazon Effect has levelled the playing field. Retailers can not only gain exposure from online mega-sales like Prime Day but they can also leverage the event as a springboard to boost brand awareness and product visibility. However, as the event continues to grow each year, the pressure is on for retailers to compete and provide a similar frictionless service. The execution of a retailers offering during peak is critical.

If the right systems are invested in, ones that are scalable, agile and provide real-time data visibility of all product handling throughout the supply chain, more and more retailers will be able to proactively respond to Prime Day and start taking full advantage of all potential new peak seasons.