Amazon’s Customer-centric Evolution

Let’s be honest, Jeff Bezos, Amazon’s CEO, is a visionary with a master plan and that somewhere in his R&D department, predictive ordering will be coming very soon.

Huh? Said differently, Amazon’s artificial intelligence (AI) will use past data to predict your future needs.

Bezos Knows You More Than You Do.

Amazon knows its customers VERY well. Some would argue that Amazon’s data on its customers is unmatched to any other company (or even any government agency). Amazon’s AI has reached a point where it is able to make some bold moves based on the confidence of their data. Amazon not only will predict what a customer will order before they even think about it, this predictive AI is essentially picking which products and ultimately brands will succeed before they even launch!

In other words, Amazon has so much confidence in its ability to predict the future, they will be able to tell brands notto launch products, and what products customers actually want before it even happens. This can have some huge implications for brands in terms of production, demand planning, research and development, and even finances. A brand can spend tons of money on R&D or production, only to find out that one of their main selling channels is rejecting the product because its predictive abilities already know the product will fail. Let that soak in for a second.

This ultimately means that Amazon is less of a level playing field for all sellers, and products success will be determined through predictive AI. Evidence of Amazon’s confidence in their predictive AI can be found in the following events that lead us to believe that the is time is now.

Amazon Apple deal– Apple is selling on Amazon directly, and Amazon is removing other distributors from selling Apple products.

Amazon One Vendor– Amazon is approaching supply chain in a new way where they are dictating if a brand will be a vendor or seller.

Amazon CRaP Clean-Up– Amazon removing CRaP items from its catalogue, forcing manufacturers to refresh packaging, and kill production of less successful products.

Why AI?

We are entering an era where Amazon’s technology and algorithms are starting to do the thinking for the customer—as opposed to a customer having to choose brands, products and sellers on her own. Amazon is confident with its own data to dictate products, pack types, sellers, vendors, fulfillment and even brands to be sold on its site.

Some would say that Amazon is going to a more traditional retailer model; I would argue that Amazon is doing its best Walmart meets The Matrix mash-up to create a mass retailer model that is infused with technology and data.

The bottom line? Amazon has reached a point of confidence in their predictive AI where they are able to make supply chain decisions for manufacturers, and fulfillment methods in the name of customer-centricity.

Velocity believes that there is common ground where Amazon, the customer, and a manufacturer can profit. Want to talk about what you can do to be on top of the upcoming changes? Reach out to us here with questions.