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Amazon Prime

30,000 ft View of Amazon’s Prime Day

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Each year Amazon says their Prime Day shopping holiday held in July is their biggest sales day(s) of the year and 2019’s initial stats are in line with that statement.

Since Prime Day’s debut in 2015, projected global sales have grown significantly each year in Amazon’s top domestic and international markets.  

Some of the leading product categories from Prime Day 2019 were laptops, televisions, headphones, luxury & beauty products, pet products, household cleaning supplies and over one million toys.  Projections are that Prime members all over the world purchased over 175 million items in 2 days.

Amazon Prime Day Sales Recap

Projected Global Sales (in $billions)Percentage of Sales Domestic vs. International
2015$0.9 B78% Domestic / 22% Intl’
2016$1.52 B76% Domestic/ 24% Intl’ 
2017$2.41 B66% Domestic/ 34% Intl’
2018$4.19 B58% Domestic/ 42% Intl’
2019$5.8 BAwaiting figures

Two large factors contributing to significant year over year sales growth for Prime Day are longer time for the actual sales event and more countries are included than ever before.

Prime Day was typically held for 30 hours and in 2018 was extended to 36 hours; now in 2019 it is a 48 hour sales holiday with new deals posting every 5 minutes in an effort to keep shoppers coming back to the marketplace.

Over 18 countries are included which is double the number from 2015; Prime membership overseas is also growing consistently in top markets like the UK, Mexico, Australia and India. 

Amazon’s goal with Prime Day isn’t just to make Billions of dollars in a short period of time.  They use that intense volume to test their capacity, changes in their network, investments to their in-house transportation and logistics and growing their Prime membership base.

It is estimated that roughly 53% of U.S. households have a Prime membership and Prime Day is one of the best events for Amazon to grow that loyal customer base and profitable annual dues. 

The Prime Membership charge is $119 per year with students paying a discounted fee of $59 per year and plans are also offered on a monthly charge.  Revenue from Prime membership fees is estimated to bring Amazon roughly $12 Billion this year and the perks associated with Prime Membership are expected to improve significantly so Amazon can grow their customer base beyond its already titanic size.

Truck

4 Tips to Improve Carrier Relationships

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To some shippers, the utilization of freight carriers has been a called a “necessary evil.”  “We make stuff and we need to ship that stuff.” Shippers with this attitude, and there are many, enter the marketplace with the perception that there really is no difference between the various carriers serving their company. To them, the only real thing separating one carrier from the other is price.  

The main reason for this thinking which has existed for decades, (and will continue to go on forever), is the fact that many of these shippers have not placed any real value in the services their carriers provide.

Let’s be honest here, pricing is important, but it cannot be the most important deciding factor in selecting the best carriers to handle a shipper’s business.

So we recommend a change in how shippers not only view their carriers, but more importantly how they measure the true value of the services being provided by those carriers.

Shippers need to be more strategic in the carrier evaluation process by looking beyond traditional cost-cutting and establishing several carrier selection initiatives to comprehensively evaluate how best to select and interact with their freight carriers for long term joint business success.

  • Determine appropriate Goals AND share those goals with the carriers

What are the shipper’s goals in establishing a relationship with a specific freight carrier?  Share those goals with the carrier or carriers. Does the carrier have the ability to meet those goals?  If not, it’s time to move on; and don’t just take the carriers word that they can meet the required goals, perform your own due diligence.

  • Set targets for key performance metrics

If the shipper’s due diligence has been successful and there is true confidence in the carrier’s ability to perform to the goals set out by the shipper, the next step is to create key performance metrics to continually measure all of the service attributes of those carriers. This includes on-time performance, zero claims initiatives, accuracy of billing, prompt problem resolution, easy to do business with and any other metric a shipper feels is necessary to track total performance of their carrier partners.

  • Measure variances over time

Once shippers start to monitor all of the key performance metrics they have established for their freight carriers, they usually find that the carriers are spot-on target out of the gate, but over time things begin to splinter and this is where relationships quickly come to an end.  It’s usually not a total meltdown across the board but small indications that somewhere along the line, focus has been lost. And if that’s the case, shippers and carriers must nip it in the bud to make sure this little pimple does not become a huge boil. Gut feelings are so critical in evaluating what’s going well and what isn’t.  Therefore, be sure to trust you gut.

  • Implement best-in-class scenario’s

So, at the outset of these business relationships, it’s important for both shippers and carriers to establish exactly what best-in-class actually looks like. Remember, to really be successful in establishing and maintaining best-in-class business relationships for the long haul, (no pun intended), both the shipper and carrier must be involved.  Both sides must be intimately involved in establishing exactly what they both agree best in class actually is; how it will be measured and should things start to go off the rails, how both parties will work to reverse the trend and get back on track for a truly successful long term business relationship.

How successful are your company’s carrier relationships?  Can they be better, should they be better?

Success concept

Three Key Principles to Achieving Logistics and Supply Chain Success

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Today’s logistics and supply chain leaders are constantly implementing strategies to manage their daily challenges to ensure their businesses succeed.  We believe there are three core principles that must be adhered to in order to ensure that success is in fact achieved, and here they are:

  • Constant and Never Ending Improvement – Unlike creating a work of art, to be successful in business a company can never be “finished” with their logistics and supply chain improvement processes.  It is a constant work in progress. There must be ongoing and creative initiatives to continually seek out and implement improvements throughout the logistics and supply chain areas of the business.  Improve today and continue improving tomorrow and every day thereafter. It is never a one and done process.

If attitude dictates altitude then all members of the logistics and supply chain teams must truly buy into the process to achieve success.  They must feel it and do what is necessary to not only achieve success today, but more importantly, to work towards continually improving every aspect of their operations.  

  • Create a Plan with Capable Teams to Implement Those Plans – Having a plan of action will always make teams work harder and help them stay focused on their core missions and competencies.  There must also be total cooperation and buy in collectively from all teams. Teams must also learn to work collaboratively. Remember, it’s all about the “Yes.”  Yes, we can be successful if we make this operational change; yes, we can be successful if we implement these new business strategies; yes, we can be successful if we on-board this new 3PL business partner or implement this new software application.  

Teams must be relentless in their goal in achieving success by building high performance teams and encouraging everyone on those teams to be the best at what they do.

  • Continually Challenge the Status Quo – By challenging the status quo, logistics and supply chain teams will ensure they are in fact the “best they can be.”  Logistics and supply chain teams must continually strive to be creative, persistent, entrepreneurial, and always profit minded.  They must focus on key business drivers and never forget that they are in fact in the sales game; selling to their customers, continually selling to management and selling to each member of the various teams.

The logistics and supply chain teams must not be afraid to take risks, they must be willing to positively communicate ideas; they must not be afraid to challenge one another and, they must become change agents so they can create an amazing future for the business.      

We’re sure there are additional principles to achieving business success in the areas of logistics and supply chain management and we’d love to hear about your team’s experiences.

Leading in Times of Change, (AKA) Business Disruptions –Part 4

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This is the fourth and final part in our series of articles challenging businesses to properly identify and collaboratively react to change management and/or business disruption situations to assure on-going business success and avoid potential business failures.

When businesses work hard to properly identify and deal with sudden change and business disruptions, especially in a coordinated and collaborative effort, they immediately gain the ability to achieve the following powerful results.

  • First – Team members begin to adopt and share a common language and establish goals for assessing and raising the performance standards of their entire corporate culture
  • Second – CEO’s and other corporate executives, immediately begin to gain strong confidence in their corporate leadership in an effort to drive more and successful accountability
  • Third – The entire corporate team finally understands how to systematically create a clear line of sight right down through their organizations. They make simple yet highly effective sequential investments in allocating time, assigning talent requirements and committing financial resources to create conditions for success

Highly successful corporate teams charged with identifying and resolving business disruptions also benefit by removing many former constraints, such as ineffective mindsets which cloud thinking and prohibit success.  These successful teams immediately gain the ability to practice and adopt feedback and conflict resolution protocols, thereby clearing any remaining obstacles to achieving success.

In turn businesses typically find themselves with new business leaders with restructured rolls. And, teams begin to align themselves to assure that not only are growth strategies met, future business disruptions can be immediately identified, properly acted upon and resolved without any fear of disaster.

Key Takeaways for Successful Business Disruption Performance

  • Clearly and immediately identify all of the support capabilities within the organization
  • Determine where all of the current primary and potential future constraints are
  • Identify who owns those constraints
  • Determine what, if any investment(s) in time, talent and/or finances are required to immediately and permanently resolve those constraints
  • Decide what metrics will ultimately be used to confirm that all constraints present and future have in fact been resolved
  • Assess if there is a chance that current constraints of any kind will move to other areas of the business
  • Finally, what “ahead of the curve” initiatives can be implemented to eliminate any future constraints that might impact business disruptions

Seven Questions Every Successful Change Management/Business Disruption Team Needs to “HONESTLY” ask themselves

  1. Are we a strong team operating with a clear purpose and do we have high expectations for the team leader as well as for all team members?
  1. Do we have aligned priorities driven by real and timely data on our current state and are all of our priorities aligned to ensure a successful future outcome?
  1. Do we think and act with full accountability and clearly demonstrate leadership qualities, keeping everyone inspired and continually inspiring others?
  1. Does every key strategy and decision have a single owner who is totally accountable for execution and owns driving key issues for a successful resolution?
  1. Are we clear where shared work exists; are we innovating and collaborating effectively, and do we have clear, concise and effective rules for engagements as well as business protocols?
  1. Are all team leaders advocating their strategy and then aligning positive ways forward, each from the perspective of their role in service of achieving successful business results?\
  1. Are we engaging and communicating a compelling way forward, taking immediate action when and if necessary, changing course direction when needed, and delivering tangible results in a way that creates collaboration, confidence and trust?

We truly hope that these series of articles outlining the keys for success to handling change management and business disruptions will be useful in your business.  We would really like to hear from you as to how you and your company overcame its business disruption challenges, or perhaps what didn’t work and why. We are sure there is much we can learn from everyone’s individual experiences.

Leading in Times of Change, (AKA) Business Disruptions – Part 2

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In our part 1 article challenging businesses to properly identify and deal with change/business disruptions, we focused on specific traits business leaders need to possess to be successful in leading their companies through difficult change management.  We also highlighted several key barriers businesses will encounter as they navigate through change and business disruptions.

In part two of this article, we continue to discuss the importance of “Change Leadership” and fundamentals for leading a company through change and business disruptions.

The Landscape of Change: “…I was never the smartest person in the room, and from the first person I hired, I still wasn’t the smartest person in the room. And, that’s a big deal. But right now everybody in the room thinks and behaves like they’re the smartest one there…we can’t agree on anything…I can’t get traction on anything we need to do….now I’ve got real problems…this needs to change…” —CEO Financial Services Company

Sound familiar?  Many businesses have tremendous management talent.  However, when their businesses are suddenly struck with a business disruption which they have never encountered before, are they really capable of rallying all the troops in a coordinated same direction effort?  Do they have the ability to immediately create cross functional teams to not only clearly identify the business disruption challenge, but more importantly, handle that disruption so that it does not “kill” their business?  

So where do company’s start?  Here are some questions businesses must consider:

  1. What really happened, are we sure?  
  2. Why did it happen; could it happen again?
  3. Was it something the company was totally responsible for, or was the disruption generated by circumstances completely outside the business’ control?  
  4. How will the company be affected by this change/disruption; are we sure?
  5. Does the company fully understand the magnitude of this business disruption?
  6. Why is it important for the management team to immediately address the issue(s)?
  7. Can the company be successful in handling this disruption with only company resources?
  8. If not, who does the company need to hire, or partner with to ensure the business’ survival?

As we see it, there are three key critical components for determining the extent of the disruption and setting the framework for leading change management initiatives to resolve any problems:

  1. Gap Analysis:  Where is the company today; what is the current state? Where does the company need to be to ensure the businesses’ survival?
  2. Mapping the Journey Forward: Businesses need to have a clear vision of what lies ahead.  What are the challenges the business will face in the short-term as well as the long-term? Are there any constraints now; will there be any constraints in the future; if so, what are they and how does the company navigate through those constraints to ensure success?
  3. Create a Compelling Vision for the Future: Businesses need to create a successful path to ensure their short-term and long-term survival; one which is based on analyzing rational business models and performing on-going analysis; creating buy-in from all key stakeholders and building strong coalitions.  The death knell to any change or business disruption initiative is the lack of total buy-in. Companies need to align purpose, mindset, roles, strategies, performance, and, ultimately rewards.

Performing Gap Analyses and Journey Mapping most likely will require businesses to move into uncharted territory, the unknown as it were, and that can be a very scary place to operate in.  It will almost certainly include moving from the company’s comfort zone to a very complex environment. How a company navigates between these diverse zones will determine just how successful the company will be in succeeding in their change/disruption management initiative.

Some of the changes a business might encounter include merging teams or organizations that may be very diverse in nature and culture.  It may include significant downsizing of organizations. It may include the need to immediately outsource key operations. It may include the need to immediately remove or add a new product or products, or services to a company’s offerings.  It may even mean changing a company’s value proposition; one which perhaps guided the company for decades.

In order to successfully and properly map a company’s journey forward in times of change, companies will need to clearly identify and resolve primary and secondary constraints so they can achieve higher performance levels. They need to identify which condition or conditions are the weakest; is it people or the process, or perhaps a combination of both.  They will need to resolve all of these constraints to achieve the highest ROI for the company, but more importantly to ensure the company’s survival.

And finally, the company needs to create a compelling vision for the future.  In order to do this, companies will need to be successful in creating high performance teams that are capable of continually identifying these business disruption threats and have the ability to resolve all constraints each and every time they are encountered.  This requires corporate investments in time, talent and finances, all in a collective effort to ensure a successful future.

Leadership in Times of Change

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Business Disruptions are inevitable in any operating environment but your reaction can be the difference between business success and failure.  This is the first in a series of articles challenging businesses to properly identify and deal with change/business disruptions that are sure to come in 2019.  

“When the rate of change outside exceeds the rate of change inside, the end is in sight.”  Jack Welch

Talk about some incredible business insight!  As we enter 2019 we believe the word “change” is synonymous with the words “business disruptions.”  There isn’t a business operating today that will not be dealing with some form of change or disruption in their everyday operating environment.  Businesses must Identify and react to these changes and disruptions throughout the coming year and beyond in order to ensure their long-term survival.   

The reality is however, that many companies may not be able to properly and exactly identify what change or disruption is coming, but they must be savvy enough to understand that they’re coming anyway.

First and foremost, what leadership characteristics are needed from the management team to successfully deal with these changes and disruptions?

  1. Competency – If management cannot deliver and act on the message, no one will follow the plan
  2. Composure – Change and business disruptions comes in many forms.  What leaders do during these times will ultimately define their long-term business success
  3. Courage – The need to always do the right thing; the ethical thing. Sometimes leaders need to make decisions that may be unpopular, but those decisions may be the right decision for the continued success of organization and for its shareholders; it’s never personal

So assuming a company’s leadership has at least these three skillsets, what obstacles might a business encounter that will inhibit them from being successful at times of change or business disruption.

Typical Barriers to Change and Business Disruptions

  • Resistance to change; denial that immediate action or any action for that matter is required. It’s simply human nature and ultimately the number 1 barrier to successful change and business disruption management
  • Limitations on existing business systems to properly identify and potentially challenge any change or business disruption strategy
  • Lack of corporate management’s commitment to immediately and properly deal with the change and or business disruption
  • Lack of cross functional teams to completely identify and implement the required change or business disruption strategy
  • Lack of technology to identify and pinpoint the areas in a business that must be changed in order to immediately overcome the disruption and ensure ongoing business success  

Once the barriers are identified and there is a complete and concerted effort to meet the change and business disruption challenge, the next steps are:

  1. The need to always be one step ahead of the curve; to continually keep pace with any change and business disruption challenge the company will face in the immediate and not too distant future
  2. More importantly, every business must have the foresight to anticipate what is coming down the pike; this is called a “sixth sense” mentality
  3. Finally, trust the teams gut.  Most of the time these gut feelings are initial indicators of what is actually coming.  However very often companies and their executives fail to properly react to these gut feelings and therefore miss opportunities to properly address change and business disruption actions

Stay tuned for more insight into change management and business disruption challenges.