Recommended Reading: Industry Feeling 'Pressures from Amazon' - Modern Distribution Management

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Recommended Reading: Industry Feeling ‘Pressures from Amazon’

Online seller ventures into grocery stores, so is distribution next?

As Amazon's reach extends into grocery stores with its purchase of Whole Foods, distributors are growing warier that the online seller – and specifically its lightning-fast delivery ability – will threaten their industry next, according to executives in Amazon Elevates ‘Right-Now’ Expectations.

“In my last quarterly manager’s meeting, it was the first time that we had felt some pressures from Amazon,” says Rolly Dyck, vice president, general manager, Schilling Supply Co., La Crosse, WI. “They were in small accounts, where the customers say, ‘Hey, I can get it in the next day versus waiting a week for you guys.’”

Amazon-phobia is on the rise across distribution once again. It follows a couple of quieter years where the company didn’t appear as often in survey responses, but it now appears the Amazon Business model, revamped from AmazonSupply in 2015, is directly targeting distributors by beating them on delivery and selection, as well as price.

The company is changing the way many distributors view their delivery capabilities, in part because B2B buyers are so used to getting shipments delivered quickly at their homes and now want that at work, says Paul Giler, regional industrial sales manager, Mayer Electric Supply, Birmingham, AL.

“Customers are expecting more from us than they ever have in the past,” he says. “Part of that comes from the Amazon model.”

The Amazon model also favors the generational shift, which is happening every day as baby boomers retire and millennials take on procurement roles, according to Scott Bebenek, president, Independent Distributors Inc., Mississauga, ON.

“I know that distributors who don’t adapt to this will be catering to a shrinking pool of end users that are all really closer to retirement and they are going to lose touch with the people that are taking those people’s place,” Bebenek says.

Read more about how companies can adapt to this threat in Amazon Elevates ‘Right-Now’ Expectations, part of MDM's 2017 Distribution Trends Special Issue.

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