As technology continues to grow at an unprecedented pace, organizations must optimize their supply chains to compete with the ‘Amazon Effect’.

The ‘Amazon Effect’ is a significant global movement that is shaping the way consumers buy and businesses sell. The term is linked to leading organization, Amazon, and the innovative and connected approach they take on selling goods worldwide. However, the disruption caused by this technological shift also impacts many industries, including supply chain and logistics.

According to Forbes Insights, the ‘Amazon Effect’ is one of four forces that will transform ‘logistics, supply chain and transportation’. The impact on supply chain stems from the rapid increase in consumer demand and output produced by online shopping. This requires the industry to take an innovative approach to the entire end-to-end journey of delivering a product to consumer fast and efficiently.

Technology has played an integral role in enabling supply chains to keep up with an ever changing global market place. In addition, an innovative and expert talent pool is also necessary to lead this industry into the future. However, there are hurdles and growing pains that come with any large scale change. This article by Morai Logistics discusses how the ‘Amazon Effect’ is shaping the supply chain and logistics industry. It also touches on effective strategies for change supply chains should implement to ensure organizations stay competitive and on top.

The Amazon Effect

The Internet and emerging technology platforms create endless opportunities for people to search and shop online. Last year, in 2018, ‘global e-retail sales’ generated USD 2.8 trillion. This number is forecasted to reach up to USD 4.8 trillion by 2021. In terms of the number of people expected to purchase product, there will be 2.14 billion global digital buyers by 2021. How do these figures relate to the ‘Amazon effect’?

According to Forbes, there has been a significant reduction in mall traffic over the years as a result of the convenience of online shopping. The article further emphasizes that purchasing products has also become ‘faster, easier and infinitely more convenient’. The ‘Amazon effect’ is a global phenomenon that is describes by Investopedia as,

The “Amazon effect” refers to the impact created by the online, e-commerce or digital marketplace on the traditional brick and mortar business model due to the change in shopping patterns, customer expectations and a new competitive landscape.

This causes an increase in pressure on retail companies to take a more innovative approach to selling at both the in-store and online level. However, there is also an incredible amount of demand on supply chains to meet these growing demands and expectations.

Supply Chain Impact

At the most basic level, supply chains enable the delivery of a good from point A to point B. From a retail perspective, this relationship is usually between a business and a customer. Between the fine lines, there is a cohesive interaction between manufacturers, shippers and possibly third party logistics providers (3PLs). However, what happens when a large increase in output occurs? According to Supply Chain and Demand Executive, supply chains that are ‘ill-equipped to administer efficient, high-volume production strategies’ suffer.

Strategies for Change

As online shoppers continue to seek companies that offer convenience and speed, supply chains must also integrate technologies that optimize their processes. Looking forward, supply chains must also evolve with external markets in order to remain competitive with the ‘Amazon effect’. In addition, there should be a focus on agility, efficiency, visibility, and end-to-end traceability. While the ‘Amazon effect’ is a disruptor, it also pushes organizations to think about the future and understand where the market is headed. By being aware of the growing expectations of customers, both retail and supply chains can thrive.


In last week’s post, we covered the reveal of Amazon Go.

This week, we’ll cover the steps Amazon’s competitors have taken to stay competitive. We will also be going into why with just a teaser video, Amazon may have already won the war for the future of retail.

Before we begin, we need to do a recap about what we know so far.

What the Reveal Video Tells Us

Amazon Go will work like this:

  • Amazon Go aims to give customers a ‘grab and go’ feeling similar to how its digital shop operates.
  • You enter the store by waving your smart phone across a scanner.
  • You will need an Amazon account (likely Amazon Prime) to use the store.
  • If a customer changes their mind about an item, he/she just puts it back.
  • The store will be using AI and facial recognition technology similar to that found in a self-driving car.
  • Seattle will be the first test city which makes sense given the city is also home to Amazon’s head office.

The video is meant to cement the idea of a friction-less retail experience. Simply go in, get what you want, then leave. The video makes the idea believable, influences buyer expectation, and affects the future of the industry.

Let’s look at the strategies Amazon’s competitor’s have been testing to expand their market share.

Competitor Response

Big retail and food companies are using a number of different strategies to stay competitive. Companies such as RetailNext, Euclid, Nomi and others are part of a trend that provides brick-and-mortar stores with analytics that looks similar to website traffic reports. The aggregate data is used to project purchasing trends, decide how to build a layout, and produce more detailed reports for shareholders.

Food heavyweights such as Tyson Foods Inc., Campbell Soup Co. and Hershey are taking a page from UberEATS with their strategy. They are trying to get into the home delivery and meal kit market as Wall Street Journal correspondent Kelsey Gee explains. They are working with online couriers to challenge companies like Blue Apron and HelloFresh that have carved out a $1.5billion market delivering parcels of fresh ingredients.

Wal-Mart is also making an aggressive push into online groceries. Wal-Mart Pickup and Fuel lets customers order their items online and pick them up when they are ready.

Future of Retail—Has Amazon Already Won?

While the strategies used by Amazon’s competitors are innovative, they haven’t had the same media buzz. With just a video, Amazon has created an expectation amongst consumers. They will expect greater convenience in the way the video promised. Companies using alternative models will need to work harder to convince their consumers that their way is superior.

However, being king of retail may not be Amazon’s true goal. Amazon Go is more likely to be a proof-of-concept and a retail model it can sell to other businesses as this video speculates.


The reveal of Amazon Go is recent, but it’s already beginning to disrupt the retail industry. Time will tell which new retail method becomes the standard, but one thing is certain—retail will be undergoing a drastic evolution very soon.

That’s it for us this week! If you liked this blog post, why not subscribe to our blog? If you’re interested in what we do as a 3rd party logistics provider, don’t hesitate to check out our services (as expressed above, we are very pro finding you the lowest total cost!). We’re also in the twittersphere, so give us a follow to get the latest logistics and supply chain news.


A couple of weeks ago, Inc. announced it will be opening a grocery store. This is an unexpected move for the e-commerce giant.

Amazon Go is the name of the name program. The reveal video promises “no lines, no checkouts, no registers”. It’s about to enter the pilot phase, being limited to a single store. The only customers to test it out will be employees.

So why the hype?

More Than Meets the Eye

It might seem strange that the announcement of physical store is having such an effect on news outlets. After all, e-commerce sales continue to grow each year. The sale of groceries isn’t new for the company as its AmazonFresh program made its debut back in 2007. This being Amazon however, means the project is more nuanced then it first appear.

A 2014 patent filed by Amazon gives more insight into how the store could work. Basically it involves a whole lot of cameras, sensors and tracking. Natt Garun, from the Verge, comments:

The patent describes a system where cameras could capture you as you walk into the store, then identify who you are based on an ID card that’s associated with your Amazon client

There are cameras lined within the store as well. They’d determine if multiples of the same items are taken. So if you took several bags of chips to get to one in the back and you put the rest back, then the cameras would recognize the action and keep you from being charged.

Sensors in the shelves are another way for the store to know what you have taken. They will check to see if the weight has changed from its original state.

Why Invest in a Grocery Store?

There are some unique ways Amazon Go stands to benefit the company.

Amazon Go, even if it were expanded far and wide, would generate a shadow of the sales of the parent company. E-commerce will have the advantage over physical stores because it isn’t limited by the geography of its customers.

What Amazon Go represents for the company, is valuable information on its customer’s buying habits. Customers would be enticed by the promise of a hassle-free grocery experience, and the cameras in the store would collect information about them. Nat Garun continues:

The patent says this is used to identify the shopper’s hand to see whether they actually pick up anything off a shelf, but combine that with the fact that Amazon knows what you’re buying and who you are down to your skin colour and this is pretty next-level market data

Information gathered this way could be used to strengthen its other programs, AmazonFresh in particular. The company would be able to see what works to move a product and what doesn’t. Having physical stores would also allow Amazon to broaden its influence in the retail market.


Time will tell how much of a disruption Amazon Go will be on the industry. The promise of “no lines, no checkouts, no registers” sounds appealing but customers may not like being always watched.

The store will also be a model for other industries to consider. In the same way the reveal of Amazon Prime Air made waves in 2013, the same will be true for Amazon Go.

That’s it for us this week! If you liked this blog post, why not subscribe to our blog? If you’re interested in what we do as a 3rd party logistics provider, don’t hesitate to check out our services (as expressed above, we are very pro finding you the lowest total cost!). We’re also in the twittersphere, so give us a follow to get the latest logistics and supply chain news.

It was just under three years ago that CEO Jeff Bezos revealed plans for “Amazon Prime Air,” a drone-based delivery system that would’ve been a game-changer for delivery services. At the time, there were a number of news outlets and commentators divided on the topic, with some being excited at the implication of drones that could theoretically reach you anywhere, while others had safety and privacy concerns. 

This week we thought we’d focus on the impact drones are having on the future of supply chains.

The Fight For Flight: Commercial Drones May Soon Deliver Your Next Order Online


That’s it for us this week! If you liked this blog post, why not subscribe to our blog? If you’re interested in what we do as a 3rd party logistics provider, don’t hesitate to check out our services (as expressed above, we are very pro finding you the lowest total cost!). We’re also in the twittersphere, so give us a follow to get the latest logistics and supply chain news.


Flying high

So it’s not really a surprise at this point, but e-commerce giant did well over the holidays, very well. Not only did it manage to ship packages to 185 countries during the holiday season, but it also managed to expand its Prime subscription service by more than 3 million people (and sell an Adele CD every 3 seconds on Cyber Monday).

According to an article on The Verge, over 200 million items were shipped for free to Prime subscribes. With another successful holiday season under its belt, it also isn’t a surprise that Amazon is expanding in new areas to better manage its business in the coming years. It looks like that this year, Amazon is focusing on innovating the transportation and delivery of its packages. Amazon is currently in talks to launch its own air freight line which it would start by leasing 20 Boeing 767 freighter jets.

The company is currently heavily reliant on UPS, FedEx, and the U.S Postal Service for its deliveries, but it looks like it would like to exert more control over its product especially for its Prime members. This is likely due to avoid another debacle like that of two year ago when the holiday crunch delayed UPS from delivering important Christmas gifts before the holiday leading to Amazon refunding shipping charges and offering customers a $20 gift card.

According to this USA Today article, Amazon building its own transportation logistics network would mean three things:

  • It gives the company capacity. Amazon needs to in-source more of its transportation logistics so it can continue to grow
  • It gives Amazon control over delivery, which is a large part of the customer experience.
  • Amazon is a master at building infrastructure for itself and then selling excess capacity to others at a profit.

Although having its own transportation logistics would be helpful, it doesn’t cheap. Leasing newly built Boeing 767F jets runs $600,000 to $650,000 a month. “Used converted freighter jets, which Amazon will likely have to launch the cargo business, cost about $300,000 to $325,000 per month to lease” writes the Seattle Times.

Flying higher

Leasing a fleet of Boeing 767F jets isn’t the only reason Amazon is in the news currently. Thanks to a project called “Blue Origin” with which Jeff Bezos is involved with, Amazon may someday also have affordable commercial suborbital to orbital flight to make it’s deliveries. The company tested out its New Shepard rocket last month which is designed to carry six passengers.

The rocket reached an altitude of 62 miles (100 km) – breaching the boundary between Earth’s atmosphere and space – and landed back at the launch site eight minutes later, the company said.
“Fellow billionaire entrepreneur Elon Musk, founder and chief executive officer of rival rocket company Space Exploration Technologies, or SpaceX, used his Twitter feed to congratulate Bezos and the Blue Origin team on the landing, a technology that SpaceX is also pursuing” wrote Supply Chain 247.

That’s it for us this week! If you liked this blog post, why not subscribe to our blog? If you’re interested in what we do as a 3rd party logistics provider, don’t hesitate to check out our services (as expressed above, we are very pro finding you the lowest total cost!). We’re also in the twittersphere, so give us a follow to get the latest logistics and supply chain news!


In the past, we’ve discussed how drones and RFID technology are set to impact the logistics industry. These technologies, along with Amazon Robotics (previously Kiva Systems), would have been considered speculative science fiction less than decade ago. These technologies are either only a few years from revolutionizing the supply chain landscape, or have already begun transforming it.

The many logistics, business, and technology articles on the subjects make the three seem like the industry is only weeks away while ignoring some very real gains this past year in some other potentially game changing technology.

For this week, we’d like to discuss the potential impact of things such as mass produced cheap 3D printers, and uberfication. These two innovations are quickly bridging the gap from speculative opinion pieces to best practice!

Mass produced 3D/4D Printers

So this first piece of technology is much closer to being a reality as working 3D/4D printers already exist and are being used in a limited capacity across multiple industries and creative novelties.

This isn’t surprising. The technology is almost four decades old and for most of that time it has been prohibitively expensive with many items produced in that time being little more than talking pieces.

It is only recently that companies such as Nike, Gillette, and Mattel have started investing heavily in 3D printing with even Google joining in with a plans to mass produce 3D-printed smart phones.

With some commercial 3D printers now retailing for less than $100, and newer models such as Hewlett Packard’s Multi Jet Fusion on the horizon however, it won’t be long before the technology starts becoming a viable alternative to traditional shipping.


In the time span of 3 short years, the international transportation network company of Uber Technologies Inc. went from launching its app to having an estimated worth of $50 billion.

It did this by not necessarily offering a new product or service (vehicle-for-hire business models have effectively existed since the idea of transportation has existed), but by streamlining the entire process. Uber tapped into the frustration that many felt with the process of hiring a taxi and instead offers a cheaper, quicker, much more personalized experience which all start with a swipe or two on your phone.

Although many may view Uber as a taxi app, its valuation is indication that investors instead see it as a logistics company according to Adrian Gonzalez, president of consulting firm Adelante SCM.

The soon-to-be launched UberRUSH expands the Uber services to allow customers to get “pretty much anything in minutes” according to the their site:

If every local business delivered, we’d all save time and energy. But most simply can’t. Day-to-day operations are already complicated and delivery can cause all sorts of logistical headaches. There has never been a simple local delivery solution. Until now.

UberRUSH aims to steam-line delivery services much in the same way the company has done to the taxi industry with business owners using Uber drivers to deliver products to customers.

The site also boasts that UberRUSH will allow both customers and businesses to: “order and track deliveries instantly, expand delivery zones, and integrate with existing tools and platforms”

It’ll be interesting to see what customers of the near-future will prefer, the go-anywhere mechanical Amazon drone delivery, or the personalized (though less versatile) Uber delivery of a package and a hello.

That’s it for us this week! If you liked this blog post, why not subscribe to our blog? If you’re interested in what we do as a 3rd party logistics provider, don’t hesitate to check out our services (as expressed above, we are very pro finding you the lowest total cost!). We’re also in the twittersphere, so give us a follow to get the latest logistics and supply chain news!


Ever since Amazon made it big on the e-commerce market over 20 years, there have been countless competitors, start ups, and imitators that have tried to take a piece of the trillion dollar plus pie.

Enter, a new start-up by Marc Lore (former founder of which aims to be a blend of Costco and Amazon. Costco with its membership benefits, and Amazon with its selection of goods.

What is Jet? is the brain child of Marc Lore, who has something of a history with Amazon. Prior to Jet, Lore was the co-founder of Quidsi, the parent company of a family of websites as and In 2011, the company was sold to Amazon for whopping $545 million. After the sale, Lore worked for Amazon for two years before heading for other pastures.

Lore’s goal for the budding company is ambitious. Jet is projected to incur heavy losses until 2020, by which point Lore expects the company to sell $20 billion worth of products annually “ a threshold he expects to hit by 2020. Only Amazon, eBay Inc. and Apple Inc. have higher online “gross merchandise volume” in the U.S”, writes this Wall Street Journal article, quoting analyst Matt Nemer:

Membership fees will be Jet’s sole source of profits, since it says it will relentlessly undercut rivals on product prices and offer free shipping on orders of more than $35 and free returns. Overhead expenses alone are expected to climb to about $150 million a year

As for business model, it requires a $50 annual membership. With it, customers would be able to buy diapers, cleaning supplies, sporting goods and more.

This article on CNNMoney goes into detail as to what the service offers and doesn’t yet offer:

  • It costs $50 a year to join. That’s slightly less than a Costco membership, and half the price of Amazon Prime.
  • Like Amazon and Costco, Jet allows individual retailers to sell products through its platform.
  • You can buy anything from groceries and appliances to furniture, books, clothing, and gadgets on Jet.
  • On average, Jet says you can expect to save $150 per year.
  • Discounts are applied based on a few factors.
  • Shipping and 30-day returns are free for orders over $35..
  • Deliveries arrive in two to five business days
  • Jet currently doesn’t offer same-day delivery service.
  • Jet offers a rewards program
  • Jet will only serve customers in the U.S.

Although Jet has incurred heavy losses, and projects to continue incurring heavy losses, it has still managed to obtain the highest valuation ever among e-commerce start ups according to an article in the Wall Street Journal. At the time of writing this article, Jet has managed to raise $225 million in capital.

Jet’s Projected Path to Success is Not Without Obstacles

Of the 10 million products listed on their, only 25,00 are from Jet’s own warehouses. The rest of the items are bought from other companies and then shipped directly to the customer, which is expensive for Jet as it often ends up paying high shipping costs plus any difference between its advertised price and the amount charged by the outside website.

Also, it’s business plan to undercut all its competitors is something to be cautious about as even e-commerce giant Amazon with all its volume, generally loses money.

Despite these barriers, its hard not to get excited about what Jet promises to customers. Who doesn’t want cheaper goods?

The articles linked to in this post admit that there are already things about Jet that should at least give way to at least cautious optimism about the company.

That’s it for us this week! If you liked this blog post, why not subscribe to our blog? If you’re interested in what we do as a 3rd party logistics provider, don’t hesitate to check out our services (as expressed above, we are very pro finding you the lowest total cost!). We’re also in the twittersphere, so give us a follow to get the latest logistics and supply chain news!


Blowing up Big, But Not as Expected

“Prime Day is a one-day event held on July 15, 2015, where Prime members can find more deals than Black Friday” announced Amazon on its North American sites prior to the event. It wouldn’t be just an unofficial commercial holiday, but a “global shopping event” the company stated in a press release.

However, shortages in popular sale items and mediocre to miniscule discounts on other items led to a strong social media backlash to Prime Day which included hashtags such as #UnhappyPrimeDay, #AmazonFail, #GoBackToSleep, and #PrimeDayFail.

Some of those tweets can be seen here:

An article on which cited data released by Adobe which aggregated counter sales across over 4 million social mentions on blogs, Twitter, Instagram, WordPress, Reddit, Foursquare and elsewhere, gave interesting details regarding the nascent holiday.

  • By late afternoon on Prime Day, the event had 90,000 social mentions, but by the same point, Black Friday 2014 had seen 20 times the number of mentions during the same time period (or 1.6 million)
  • Half of the social media mentions in the U.S expressed sadness as many of the negative tweets it found were pointing to less-desirable items, like socks, microfiber towels and Adam Sandler movies
  • Sentiment for the #PrimeDay hashtag went from 10% negative sentiment before the sale to 24% negative once sales launched
  • Combined @Amazon and the #PrimeDay hashtag have had a sizeable dip in sentiment since the sales launched receiving a combined 41,434 negative mentions from users

All Style, But Where’s the Substance?

Amazon obviously put a lot of time and money into promoting their Prime Day event. The company hoped it would eclipse Black Friday as the premier shopping holidays.

In their effort to make Prime Day big, Amazon seems to have forgot a simple logistical concept regarding inventory management 101 – knowing what they had.

As an article on points out, the reason for ho-hum attitude of some customers had to do with lower-than-expected inventory for popular items, and unimpressive “discounts” such as these.

The frankly bizarre items with massive discounts was neither here nor there, but it did lead to some amusing screen captures and captions.

Boom or bust for Amazon?

Amazon did well. Very well in fact. Hiroku Tabuchi, wrote in this New York times article,

Independent data confirmed the sales surge. ChannelAdvisor, which tracks third-party sales on Amazon, said that Amazon’s sales on Wednesday jumped 93 percent in the United States and 53 percent in Europe compared with the same day of the week last year

Despite the sales number, many analysts agree that Prime Day has been a PR disaster for Amazon, a fact made worse because as of this article, the company has offered no apologies.

“In the long run, that means Amazon’s decision to ignore the backlash could have longer-lasting effects beyond the Prime Day sales boost”, writes Sarah Perez of “Consumers who were on the fence about the value of Amazon Prime may think poorly of Amazon’s brand following the bad social media buzz”.

The question now is: “Can those spurned Prime members muster enough goodwill to stay signed up after their trial expires?”, only time will tell.

Until then, we’re left with some amusing tweets.

That’s it for us this week! If you liked this blog post, why not subscribe to our blog? If you’re interested in what we do as a 3rd party logistics provider, don’t hesitate to check out our services (as expressed above, we are very pro finding you the lowest total cost!). We’re also in the twittersphere, so give us a follow to get the latest logistics and supply chain news!


A little under two weeks ago, the Federal Aviation (FAA) granted approval to e-retailing giant to test-fly their new advanced drones, under certain provision, for potential delivery. This latest petition received quick approval from the FAA compared to past efforts this year, such as the six month delay in approving an earlier prototype for which the FAA received a lot of criticism.

“We’re pleased the FAA has granted our petition for this stage of R&D experimentation, and we look forward to working with the agency for permission to deliver Prime Air service to customers in the United States safely and soon,” said Paul Misener, Amazon vice president for global public policy.

The FAA said Amazon was one of 30 exemptions the agency granted a day earlier for commercial drones, bringing the total to 128 according to this RTT News article.

The article is one of many recent stories involving drones. An increasing number of industries outside of logistics and e-commerce are looking at drones as the technology of the future.

Danny Vogel of JUDSPURA Business Advisor outlined some examples from other industries that have already started to seriously consider utilizing drones:

  • Law enforcement agencies have shown strong interest in using drones for surveillance and public safety while other government agencies have found drones useful in fighting fires, search-and-rescue missions or catastrophic events
  • Construction companies have already begun using drones for mapping sites and monitoring progress, and mining companies have used drones to map the insides of mining tunnels
  • Media companies have also begun testing drones for filming reports and news coverage

What it all means for logistics reliant businesses

Back in February of this year, a number of articles reported on Amazon’s inability at the time to get approval from the FAA to test their drones on American soil. At the same time, one of the company’s major international competitors, the Chinese online giant Alibaba, was ready to test their own drone delivery program by delivering tea to 450 of its Chinese customers in a trial run.

The reason why both companies’ drone delivery programs were so heavily compared to one another was because since Jeff Bezos, CEO of, publicly revealed the Prime Air program in late 2013, Amazon has been in the press as the main proponent of utilizing drones for commercial purposes. Although many companies since then have started their own drone testing, seeing a competitor such as Alibaba made the public all the more aware of how far drone delivery programs have come in two short years.

Many news articles, industry discussions, and blog posts related to logistics discussed how drones would be a hot item discussion in 2015. However, with each passing month it becomes more and more apparent that the discussion around the requirement for drones was settled even before the start of the calendar year. Instead, the real discussion is centering around which companies will come up with the best solution to the problem of possible collisions and best marketing strategy.

That’s it for us this week! If you liked this blog post, why not subscribe to our blog? If you’re interested in what we do as a 3rd party logistics provider, don’t hesitate to check out our services (as expressed above, we are very pro finding you the lowest total cost!). We’re also in the twittersphere, so give us a follow to get the latest logistics and supply chain news!


Target, the U.S retailing giant has recently been getting a lot of attention from the Canadian press. Unfortunately for Target, the discussion has been how in this year alone, it had a $941 million loss in the Canadian market due to the baffling mismanagement and miscalculations it made it its first foray into a foreign market.

While Target had peers that failed in foreign markets for similar reasons it could’ve learned from, the biggest lessons it should’ve studied were those of Amazon’s which managed to not only capture 7 % of all e-commerce in Canada, but also has the potential to account for 1% of total retail sales in the country. Although the business models of the two companies are different, the obstacles, opportunities, and logistical limitations are not.

Planning vs. Buying

Amazon did a lot of preliminary work before opening its first Canadian distribution center in 2010.

  • It had eight years of goodwill and visibility in the Canadian e-commerce market through
  • It worked closely with the Canadian government to override certain Canadian foreign-ownership rules that would’ve been barriers to its expansion
  • For its part of the partnership with the Canadian government, Amazon gave a $20 million investment commitment into Canada, $1.5 million of which went to cultural events and awards
  • It ran a number of interviews and press releases addressing a number of concerns and criticisms from its critics while also communicating its intentions of gradually branching product categories

Target’s approach was considerably different. Instead of a slow province-by-province rollout, it tried to achieve “critical mass” from the onset by sinking $1.8 billion into buying out Zeller locations (which didn’t include renovation costs) and opened 124 stores across Canada in 2013.

Logistical Adaptability

Both companies faced logistical complications when they entered the Canadian market because of the country’s vastly differing regional tastes, strict trade and wage laws, and geographical vastness. As a result, the initial offering of both Amazon and Target for Canadians was paltry, and priced higher than their respective American counterparts.

Amazon’s approach to offset this problem was to offer a modest selection while maintaining the convenience it’s known for. It focused mainly on books and smaller items and overtime, introduced 14 new merchandise categories that would receive a lot of Canadian press attention. Through this, was able to build for itself a loyal customer base. This approach also drew attention away from the inflated prices, which is a common technique amongst the successful American-based companies doing business in Canada.

Target hadn’t really planned outside of creating a Canadian specific brand (which failed to launch on time), and sticking rigidly to the management, sale, and promotional models that it had in the U.S., even when it clearly wasn’t working.

Differences in Canadian packaging laws, protectionist tariffs on some foods and exclusive wholesale arrangements also meant that the Canadian stores couldn’t be serviced from the company’s American distribution network. Many of the 124 Target stores had whole sections that were empty of products, while other items were overstocked and congested the supply lines further.

The empty stores led to customers instead focusing on price, which is an area a U.S based company can’t compete in for the reasons mentioned earlier.

Lessons Learned

When comparing Amazon’s success in Canada with Target’s failure, there are several lessons that can be learned

  1. Do your homework –Amazon did a lot of preliminary work before it entered into the Canadian market whereas Target simply assumed the business climate would be similar enough to its home base.
  2. Be flexible—Amazon success international is largely due to its ability to adapt to changing tastes and trends. Target’s failure in Canada is in large part due to its insistence on rigidity.
  3. Patience—Target sought to control a portion of the Canadian retail market at the onset. It failed to remember that entering a foreign market is a patience game, and as a result it lost billions.

That’s it for us this week! If you liked this blog post, why not subscribe to our blog? If you’re interested in what we do as a 3rd party logistics provider, don’t hesitate to check out our services (as expressed above, we are very pro finding you the lowest total cost!). We’re also in the twittersphere, so give us a follow to get the latest logistics and supply chain news!