The August 30th Wall Street Journal’s article “Amazon Effect” Engenders Deals for Tracking Firms highlights the fast changing demand for real time parcel tracking. The essense of the article is the effect that Amazon is having on leading (aka forcing) companies to be able to track shipments in a real-time manner. This is driving investing interest in a number of the software and hardware firms enable this capability. For 20 years, Amazon has been improving and innovating the same basic category of “Where’s My Stuff” capabilities. The customer experience journey is never done. The Internet of Things (IoT) is now opening up scenarios like real-time inventory tracking. Improving customer experiences, driving operational improvements and building new business models are the “triple threat” of IoT. In my book, The Amazon Way on IoT, I explore the principles of how IoT enable the triple threat of IoT, and helps answer the question “what should my IoT strategy be”.
“Amazon Effect” Engenders Deals for Tracking Firms
by Jennifer Smith
A growing number of companies are paying to track in real time everything from truckloads of pork chops to shipping containers full of exercise equipment.
Logistics providers, retailers and suppliers are inking deals with software firms that use location data and weather and traffic information to monitor shipments and alert customers to events that could hold up delivery, such as a loaded truck sitting in a yard for more than an hour.
This month, supply-chain software firm Descartes Systems Group DSGX +0.89% bought MacroPoint LLC, which provides location-based truck tracking, for $107 million. Descartes already tracks ocean, air and parcel delivery for customers such as Home DepotInc. HD +0.64% and CVS Health Corp. CVS +0.97% , as well as some trucking. Other “visibility” startups are broadening their scope, adding services like real-time temperature tracking.
The need for these services is growing as retailers and shoppers demand faster, more-precise delivery. Many Amazon.com Inc. AMZN -0.12% customers have become accustomed to reliable two-day shipping, forcing other retailers to offer similar service. Businesses are making new demands of their suppliers as they trim inventories and reduce supply-chain costs. Wal-Mart Stores Inc. in July said it would penalize companies that made deliveries too late or too early.
“It’s the Amazon effect—customers are putting more pressure on their supplier to know where their product is,” said Bart De Muynck, a supply chain analyst with Gartner Inc.Mr. De Muynck said he expects more tracking startups to get snapped up by larger software companies.
On Tuesday, logistics software company Convey, which specializes in last-mile delivery tracking, said it raised $8.25 million in a Series B funding round led by Techstars Venture Capital Fund. The firm, whose platforms are largely used by retail clients such as Wal-Mart’s Jet.com, plans to focus on international supply chains and expand into additional markets, such as medical devices and construction and building materials.
Read the full article HERE