140. Channel-Model Innovations Ahead

2020 Companies, AmazonBusiness, Big Data, Distribution Industry Sales, Line Item Profit Analytics, LIPA, Profit Analytics, Supply Chain Partners, WayPoint Analytics

BIG CHANGES BY 2020+?

Big players (Amazon, Walmart, Home Depot, etc.) are combining many technologies to create the onrushing Cloud Omnichannels to which B2B brands must respond.    

Amazon’s (AMZ) “doorstep-back-to-producers” value-channel is all in the cloud. It incorporates technologies like AI, machine learning, robots, and cobots. And, AMZ has already hugely pre-invested in exploiting 5G bandwidth, instant-startup-clone brands, info-videos with watch-me reward points, last-mile-uber-metro-delivery platforms, voice commerce, drones, fintech, blockchain, etc.      

 AMZ’s CLONE-PRODUCT CAPABILITIES

Besides the cost and value advantages AMZ has with its web-site and fulfillment execution, it also has the following less-visible logistics capabilities (and services for fees):  

  1. AI-driven, Kanban-pull-replenishment from customer-click demand to factory shipments worldwide. No buyers, paperwork, or excess stock from end-to-end with better local fill-rates.
  2. Automated, cross-docking Master DCs to Fulfillment DCs.  
  3. Enabling startup brands to use the entire ecosystem for only one (or more) SKU clone(s). Type in a specific brand’s SKU number. The brand and it’s SKU won’t be top-page unless the brand pays enough advertising dollars (in an on-going auction) for the spot. But, a clone(s) can instantly be there with 5.0 reviews for 50% less. Who needs “channels of distribution partners”?  

WHAT’S NEXT FOR AMZ BUSINESS?

AMZ-BIZ has, so far, pursued a “long-tail” SKU strategy. Resellers provide the majority of the universe of SKUs with content and dynamic pricing. AMZ Web Services has created free cloud “central-spend-management” tools that help AMZ win up to 20% of the total MRO spend from big institutions. These are mostly spot-buy sales.  But, reseller fees are good. And, expect AMZ to monetize its long-tail clickstream into advertising fees (at the expense of trade shows and magazines).

What will AMZ innovate next in the B2B space? Here’s one of many possible experiments they (or other  start-ups) might pursue: brokering whole-good, commodity items. Imagine a dynamic-quoting calculator that uses 3PL, a-la-carte pricing. Buyers could then order full truckloads direct; or, skids or mixed-cases indirectly through a bulk-break center. Add in an AMZ fintech, trade-credit service to appeal to most-creditworthy end-users, and you have a cream-skimming opportunity! 

B2B-CHANNEL QUESTIONS

  1. How much will your channel be strafed by customer-centric, digital cloud-channel intruders?
  2. Will your channel need new selling, business, and/or channel models to blunt AMZ (and others’) inroads; and, to beat un-changing, traditional competitors?  
  3. Will brands create vertical marketplaces in some channels? Why? How?  
  4. And, what SKU-level analytics will be needed for channel-partners to co-create new models?

Come and meet me at MDM’s Pricing and Profitability Summit, in Denver, on April 15-17. I’ll make it easier for you: use coupon WayPoint2020 to get 100$ upon registration. See you there. https://pnp.mdm.com/