Upping the Ante: How the Amazon Effect is Changing Everything

Hyper-efficient customer service in the form of online ordering, free same- and next-day delivery, and other conveniences made possible by modern technology drives the trend known as the “Amazon Effect.” Defined by whatis.com as “the ongoing evolution and disruption of the retail market, both online and in physical outlets, resulting from increased e-commerce,” the name acknowledges Amazon’s “early and continuing domination in online sales.”

Despite the name, this sea change in the market is not only about Amazon and equally massive competitors such as Walmart and Target. The disruption to the retail and consumer goods industries extends all the way to mid-sized and mom-and-pop retailers, manufacturers and suppliers that must find a way to keep pace. While every move of the retail giants is well-documented and dissected, the impact on everyone else goes far less recognized. Worse yet, many of the companies deeply affected by this rapid and massive change in basic business operations were unprepared for it and remain at a loss for how to respond.

To avoid being a collateral casualty of the Amazon Effect, retailers and consumer goods companies need to fully grasp how the new realities of ecommerce truly affect their business, and then devise a strategic response uniquely suited to the characteristics and challenges of their business.