Jonathan Reeve - Jonathan Reeve Consulting - What's Next? How Google, Amazon and Uber Plan to Disrupt Online Retail Logistics

WHAT’S NEXT?

How Google, Amazon and Uber Plan to Disrupt Online Retail Logistics

www.jonathanreeve.com.auJonathan Reeve

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Agenda

ONLINE RETAIL LOGISTICS

Online retail’s last mile challenge

What is disruption?

3 potential disruptions of online retail logistics


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3The biggest challenge for the first online retailers was covering the cost of last mile fulfilment



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420 years on… and online retail still faces the challenge of unprofitable last mile fulfilment



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5With online sales doubling every six years, the economics of this unsolved problem are unsustainable


SALES THROUGH A DIGITAL CHANNELEx: PURCHASING ONLINE, DELIVERY AT HOME

2000 2015

1%7%

2030

?

Online accounts for 7% of retail sales and it’s doubling every six years

2/3 of online sales attract free shipping

Only 16% of online fulfilment is profitable

Amazon makes only 0.75 cents profit for every dollar of sales


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6Most current efforts are incremental


Today

Productivity

Required


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Things have to change


“We can not solve our problems with the

same level of thinking that created them“

Albert Einstein

We need to completely re-think online retail logistics


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Agenda



What is disruption?



Everybody is talking about disruption

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Source: HBR, December 2015 (Christensen, Raynor, McDonald)

NUMBER OF ARTICLES QUOTING “DISRUPTIVE INNOVATION” AND

“DISRUPTIVE TECHNOLOGY”



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10Disruption is when a low-end innovation is introduced

and refined and eventually takes over the market



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Incumbents have a “blind spot” for disruptors



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Agenda



What is disruption?



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Potential disruption 1: “Natural monopoly”



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Potential disruption 2: “On-demand logistics”



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Potential disruption 3: “Infinite variety at low cost”



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Summary


“People don’t want to buy a quarter-inch

drill. They want a quarter-inch hole.“

Clayton Christensen