By Bill Wade, Wade & Partners
At the recent AAPEX/SEMA Show in Las Vegas, I heard endless versions of a popular Wall Street gam: ask every CEO of every company threatened by Amazon: “What’s your Amazon strategy?”
And, the typical ‘this great industry of ours’, get me out of here corporate-speak answers aren’t helpful. Mostly a dodge to let field people take care of this annoyance.
Distributors of all sizes accosted me with another well put question. “I’ve read your Amazon article. Great job, but what the hell should I do?”
For the past two years, my partners and I (most importantly distribution guru Bruce Merrifield) have encouraged legions of distributors in various specialties to follow this service-value innovation recipe:
- Do a customer profitability ranking;
- Sort the top 100+ into different niches;
- Pick the historically most profitable niche and within it 5+ most progressive, cooperative customers;
- Visit them to discern what next-level service value definition and metrics are.
Self-Analysis Is Cheap!
Great questions beg for answers that can’t yet be known, but they will help new visions to emerge. Then smarter, fail-forward experiments can begin. Here’s a starter list to modify your business plan and/or vision continuously. Involve your smartest people (not necessary just top execs), research, debate and act on any insights that surface.
- What are your estimations for the exponentially-growing data driven trends in trucking. Can your group think through:
- How to be doing more online and less offline as digital, wireless bandwidth explodes while costs drop
- Learn the future of synthetic intelligence and predictive maintenance. This application of ‘data science’ is fewer than two years away.
- Acquire knock-off mobile devices that can get and receive 5G downloads of exponentially growing product information starring video?
- Do you agree that digital platform companies in heavy-duty parts and service can grow and operationally scale with these trends at a market-dictated pace?
- What is the group’s feeling about the power and potential reach of Amazon’s rapidly-evolving, integrated and snowballing platforms that include: (a) Prime Members; (b) AWS-powered web-site capabilities and experience; (c) Marketplace: 2 MM resellers with 350MM SKUS (d) third-party product-information explosion; (e) Fulfillment by Amazon; and (f) Alexa/Echo converging with 5G phones and service in 2020 to enable Voice Commerce in the workplace?
- When and why will more factories cut a direct, content-management deal with Amazon that may also include selling hottest items to them? This practice is growing like a weed today.
- What channel conflicts will then ensue between producers and their distributors/dealers? Can they be minimized? What distributor/dealer disintermediation and (simultaneous?) win-win, re-intermediation do you foresee?
- How will distributors and groups identify their most profitable, customer-niches to invent next-level value that Amazon can’t match? What chronic losing, customer and product activities, will distributors exit to better reinvest talents into renewing value for best customers?
- If digital marketplaces are booming, then what small-bet experiments are you considering surfing this wave as either an Amazon reseller and/or a player on other potential, emerging, channel marketplaces?
- By 2020, 50 percent of B2B purchasers will be Millennials (currently ages 19-35). Surveys inform us that they see both outside and inside sales reps as 9-5, Monday to Friday, and prefer faster, online, 24/7 product discovery and rebuying.
What is your 2020, sales force vision to: partner best customers; accommodate shifting customer preferences; and compliment the exponential increase in on-line product education?
My real question is: What new analytics will factories and their legacy channel partners need to unweave their existing channels and reweave new ones to both cooperate and compete—via vertical channel marketplaces—with Amazon?