Understanding the Impact that Amazon Has Made on the FMCG Industry

on April 11 | in FMCG | by | with No Comments

Amazon has not only made Jeff Bezos a billionaire, but it’s also revolutionized the fast moving consumer goods (FMCG) industry completely. Starting out as just a small platform that sells library books, it’s grown to encompass various categories.

Amazon was also one of the first platforms that introduced fast shipping, same day shipping and revolutionized how we look at online shopping.

Suffice it to say that without Amazon we might have a very different FMCG industry. But, what exactly has Amazon’s impact been on the FMCG industry?

Introduced Online Shipping

Before Amazon’s online shipping feature, there were probably just a handful of stores who were offering this option. Amazon not only revolutionized this aspect to the point where now all most all stores offer this option.

Big stores like Walmart, Target, and others have utilized Amazon’s delivery system into their business as well. There have definitely been some positive changes introduced such as digitizing their warehouses to improving storage, and adopting good practices for supply chain management. It would be remiss to say that Amazon didn’t have a role in this area too.

In-store Mobile Technology

One of the best things about Amazon is its in-store options that have also forced retailers to adopt them as well. Today, most brick and mortar stores adopt an approach that makes their in-store and site experience seamless.

Additionally, data reveals that consumers also respond positively to such stores. 92% of consumers prefer shopping with stores that also have an online presence. Another 65% prefer using localized coupons for their shopping experience. Successful retailers are able to offer all these features and more for their shops.

Same Day Delivery of Perishable Goods

Shipping, storage, and management of perishable goods was a problem in the past but today, this isn’t an issue. Amazon’s algorithm can also be applied for perishable goods and same day delivery. It should also be noted that Amazon consistently seeks to improve and today, their delivery speed is faster than it was 2 years ago.

On average, Amazon has been able to cut out almost 1.5 days out of it’s usually delivery time. When applying that to perishable goods, it prevents shelf time or storage issues and ensures that products get delivered at maximum freshness levels.

Online Reviews for Products

Product reviews are now the lifeblood of online sales. It also makes a significant impact on the demand for a product. A good review can increase sales by as much as 10% to 20%. Amazon’s star rating and product review system have slowly impacted other markets as well.

Most buyers nowadays will not purchase anything that has a bad review. With good reviews, you’re able to improve your product’s demand. It’s a small thing but it actually has a big impression on the overall supply and demand system.

By taking a look at these changes, you can see that Amazon has had a revolutionary effect on the FMCG industry. However, these changes aren’t over yet. With each year, the industry is evolving and businesses must evolve with it too.

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