The 2020 Mid-Year Economic Update_long

Unstoppable Amazon? Not So Fast

Online retail giant vulnerable to mobile purchasing trends.
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In this season of good tidings and cheer, here are a few thoughts for distributors dealing with disruptive technology to consider as we end the year. Based on a growing number of articles and a highly publicized battle with book publisher Hachette, more analysts and industry observers are getting tougher on Amazon. The latest is an article in The New York Times, "Amazon Not as Unstoppable as It Might Appear."

It’s worth a read. Author Farhad Manjoo makes an interesting point from a distribution point of view: Similar to the way that Amazon disrupted big-box and local retail models via technology, the same could happen to it. Amazon could become vulnerable to mobile purchasing trends, which the company has not co-opted until now. Smaller startups are already working with small local retailers to provide logistics efficiencies via mobile platforms that level the playing field or even tip it back in their favor.

The article also addresses a few other potential weaknesses that reduce the mythological status some have given to Amazon, and which they have gladly accepted. That has given it a lot of runway to figure out how to make a profit and, in some cases, it seems just as susceptible as bricks-and-mortar companies to loving a problem to death.

What shift in new technology, platforms, B2B purchasing and the economy will take place over the next few years? I won’t rule out a swing of the cycle back to support the power of multichannel strategies, which we cover and advocate for extensively at MDM.

I won’t minimize the long-term impact Amazon will have on industrial product markets. But we all have experienced how quickly market conditions shift. It’s important to keep perceived threats in perspective. Too many companies overfit a solution or strategy to find they gave too much weight to a competitor. I’d argue that distributors have an opportunity over the next few years to be more adaptive and innovative than Amazon to strengthen the powerful differentiators that have always been the source of their value.

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