Advice for Distributors in the Age of Amazon
Science fiction writer H.G. Wells is credited with uttering the famous quote, “Adapt or perish, now as ever, is nature’s inexorable imperative”. As purveyors of technology that would have been considered a flight of science fiction fantasy even 30 years ago, we live and die by this maxim. However, our customers are not necessarily tech mavens, science geeks or propellerheads. So, it may not seem as obvious to them when progress demands they adapt to new and sometimes unsettling developments in the beverage alcohol industry. Whether they know it or not, the specter of change is at their threshold and it is time to adapt or perish.
The big news? Seattle distributor, Columbia Distributing has entered into a relationship with Amazon to support beer delivery to homes in limited trial markets. Amazon, which recently acquired Whole Foods in order to achieve an instant distribution network for grocery delivery, is obviously serious about this trend. They wouldn’t have invested this significantly if they weren’t. And they did so largely to compete more effectively with Walmart home delivery, which has been the dominant player in this burgeoning segment of the market. Amazon’s intent to offer beer through its home delivery channel is a potential game changer for distributors. Yet, as Beer Business Daily notes of the development, “some distributors regard Amazon’s experimentation with beer delivery in some markets as they would the boogeyman”.
Why then, is Columbia Distributors receptive to this innovation while the preponderance of other distributors sees it as a threat? While we don’t claim to have any relationship or interaction with Columbia or its CEO Chris Steffanci, it is safe to surmise that he is not uncomfortable with the speed of change driven by technology. Any worthy CEO looks at a company like Amazon with some degree of admiration. They have, after all, leveraged technological advances to literally transform the retail industry and global supply chain management. Staffanci is likely correct to conclude that in all likelihood Amazon will exert similar effect on the grocery (and by extension, the beverage sales) industry too.
BBD reports that Columbia’s key account management and category management resources are already supporting Amazon with a dedicated team. They’re fostering increased understanding between Amazon and the brewers and suppliers in their portfolio, bringing suppliers up to speed on ecommerce – an area typically falling outside the purview of suppliers. Columbia for its part, is certain to gather very potent operational and market intelligence as well as practical experience in a field no other alcohol distributor yet inhabits. At the same time, they’re making themselves a valuable resource to an enormous industry-leading disruptor by helping them to understand the intricacies of the three-tier system.
Skeptics suggest Amazon may not succeed in this somewhat risky endeavor. Columbia is betting on the inexorable imperative of change that Wells warns must presage either adaptation or death. As customers of GreatVines already know, there is far more to be gained by embracing new technologies than by avoiding them, clinging instead to comfortable, if outmoded, ways of doing things.
