The Customer Value Funnel

Factors for Customer Value in the Grocery Last Mile

For customers’ satisfaction to be fully achieved, a number of factors have to be put into play. These factors have been clearly explained by the Customer Value Funnel. Business units need to focus on the aspects in the Customer Value Funnel to facilitate value maximization; an approach that takes into consideration both macro and microeconomic factors for a business unit to succeed. For the case of Amazon.com, a lot has been put to place to promote the Grocery’s Last Mile. Amazon.com intends to maximize customer value in terms of the quality of groceries delivered and the speed of delivery. Drawing focus into the macroeconomic factors, Amazon is considerate of the community and the environment at large; seeking to sell or deliver mostly fresh organic foods. The company seeks to steer away from processed foods, mainly because it is environmentally conservative and because the customers prefer fresh foods. Amazon gets its supplies locally, regionally and within the national borders; this helps to maintain cultural ties with the society. Consumers, in this case, will receive groceries and fresh produce that they are familiar with. Foreign products may not attract the dwellers much (Wilson & Hollensen, 2013).

Expansion of Amazon’s Grocery Business

Amazon sells its products in many states. It has a big coverage in terms of customers including global cities like London; even though at some point it had to shut down business in five states. Such a move would have probably sparked fear or lack of confidence from the consumers.

Importance of Technology in Amazon’s Last Mile

Not to mention, technology is one vital element that if ignored may take a business unit to its knees. State of the art technology is preferred; it boosts efficiency and effectiveness in terms of production. With good technology, a lot is done effectively within a short time. Amazon, in one of its outlets, Amazon Go, cashier-less systems has been adopted. Bagging of consumer purchases is done by conveyor belts and is closely monitored by few staff. Since this doesn’t involve human strength, bagging takes place quickly and effectively. A technology of such kind also allows for the elimination of courier services which cause delays. Customers easily get to the stores knowing they will take the shortest time possible to be served (Weinstein et al., 2015).

Microeconomic Factors and Strategies in Amazon’s Grocery Last Mile

Taking a closer look at the microeconomic factors, Amazon effectively employed some of the strategies. There were competitors like Walmart, Albertsons; and it is such competition that helps company’s units to stay in the business. Competition creates room for new ideas and strategies that if correctly employed might boost sales. To deal with the competition, Amazon opened up many outlets to deliver different good; this move resulted in speedy deliveries to clients. With competition, the fresh produce sold by Amazon were of the best quality possible. Since most of the products are perishables, cold storage was paramount to keep the produce fresh and fit for consumption. The company at some point had to cut down its prices; a strategy that is meant to draw more and more customers into the business.

Supplier Strategy and Collaboration for Fresh Produce

Amazon looked for quality suppliers of its fresh produce to ensure customer satisfaction. Because of the bulk involved, the company often got its supplies directly from growers and third parties. Goods received directly from growers is considered first hand and fresh since it has not changed many hands, and has not stayed for long. This strategy enabled Amazon to keep customers close and enjoy customer loyalty and retention (McFarlane, 2013).

At some point, Amazon collaborates with Whole Foods; a company with its own brand name, and eventually purchases it. Since Whole Foods is known all over the states, there is not much marketing needed to create its awareness; this helped Amazon with boosting sales over time. The collaboration between the two companies made business easier and more fruitful.

Regulations and Political Stability in Amazon’s Operations

Being dealers in fresh produce, the company had to follow regulations regarding the production of food. All perishables were to be under cold storage to keep them fit for human consumption. Violation of such regulations could lead to termination of operational licenses since such practices are a danger to human health. Cleanliness of the premises where the fresh produce is stored is paramount; which still ensures the product is not contaminated and is fit for consumption.

Amazon is somewhat not affected by the political-legal state of the United States. Since there is good political stability within the United States, a business unit like Amazon is bound to operate smoothly. There are no sudden fights or business shutdowns that will affect the business negatively in any way.

Customer Relationships and Challenges for Amazon’s Grocery Last Mile

Above all, Amazon has tried to maintain good customer relationships through discounts and free deliveries once in a while; retaining most customers hence the loyalty. With a view to maintain or achieve the grocery last mile, Amazon is said to be in the right direction. Challenges such as allowing customer choice should be looked in to. Customers prefer to see the fresh produce before they make purchases. The company can come up with a new strategy or application that shows the exact nature of the product; this will allow customers to make their choices from afar and still be satisfied with their pick (Ilieska, 2013).

References

Ilieska, K. (2013). Customer satisfaction index–as a base for strategic marketing management. TEM Journal, 2(4), 327.

McFarlane, D. A. (2013). The strategic importance of customer value. Atlantic Marketing Journal, 2(1), 5.

Weinstein, A., & Pohlman, R. A. (2015). Customer value: a new paradigm for marketing management. In Proceedings of the 1997 Academy of Marketing Science (AMS) Annual Conference (pp. 132-133). Springer, Cham.

Wilson, J. A., & Hollensen, S. (2013). Assessing the implications on performance when aligning customer lifetime value calculations with religious faith groups and after lifetime values–a Socratic elenchus approach. International Journal of Business Performance Management, 14(1), 67-94.