How is Amazon Changing the Face of Logistics?
Thanks to innovations such as our battery-powered tugger carts, supply chain technology has improved the physical efficiency of warehouse and logistics workers. Today, Amazon is once again in front of the industry with using technology to refine inventory management, a job long considered the exclusive domain of human retailing experts.
Amazon Expands Its “Marketplace”
During Amazon’s infancy, when they began to branch out beyond books, the company struggled to convince companies to sell their products through the online platform. Amazon decided to recruit the best and brightest of business-school graduates and retailing veterans to build their own retail team.
Spurred by that success, Amazon started developing their marketplace concept, spearheaded by Fulfillment by Amazon. With independent merchants able to sell their products on a completely self-service basis, the retail team became less valuable.
By 2015, marketplace sales exceeded retail sales while also generating twice the operating profit margin. While retail vendors once enjoyed preferred status, the playing field leveled as marketplace vendors began receiving the same perks and benefits.
Reaching New Heights of Data Accuracy
At the same time, Amazon rolled out an initiative known as “Hands Off the Wheel” in which demand forecasting, ordering and other inventory-related tasks were moved to algorithms. Initially, humans had the power to override the software, but that changed as the system achieved unprecedented levels of precision.
In what seems to be an inevitable move, the retail and marketplace teams are now merging. As customer demands continue to grow, less reliance on humans keeps Amazon far ahead of competitors such as Walmart and Target.
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