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Home » Watch: The Prime Problem With Amazon Prime
VIDEO

Watch: The Prime Problem With Amazon Prime

March 28, 2022
Russell W. Goodman, SupplyChainBrain

You might not be able to beat Amazon Prime, but you can make the supply chain changes necessary to be competitive, says Jason Murray, chief executive officer and co-founder of Shipium.

Price, selection and convenience are the big levers that retail has, but the first two have pretty much run their course, Murray says. “They're really hard to compete on now for several reasons, including private label and a large influx of options from foreign manufacturers. At the end of the day, you're left with convenience to compete on.”

Convenience has two main aspects: the shopping experience and the shipping experience. The last piece — how fast a consumer gets delivery — is where Amazon has dominated the last 10 years with Prime. For Murray, the shipping piece is the key.

“Everything else being equal — like the way that you search, browse, find things, check out, et cetera — all things being equal, because of fast delivery consumers are buying four times as much.”

Others retailers are stuck to some degree, Murray says, because they're behind on the technology required to compete directly with Amazon on delivery. “They've got to find a way to bring their delivery experience up to par if they're going to compete in a modern e-commerce marketplace.”

At Amazon, where Murray worked for 19 years, systems were connected. “We built everything in house, everything talked and played together. That coordination played a huge role in making the whole thing work in tandem and be overall efficient.”
 If everything is coordinated, the magic happens, he says. “You're able to decrease shipping cost and increase speed, because inventory is closer to customers. You're using carriers that are faster and cheaper. It's that technology piece that needs to be there for retailers to really compete.”

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