By 2021, 71% of logistics leaders believe their supply chain will be a key driver of quality customer service. But there’s a disconnect. Fewer than half of those same leaders view the supply chain as a key brand differentiator. We’re living and operating in the age of the consumer. Today, customer demands influence business decisions more than they ever have before. How companies deliver their goods, the experiences and value-added services they provide are now as important as the product itself.
Shoppers want options and personalization. Companies like Stitch Fix and Imperfect Produce differentiate themselves by adding more value to the customer through their logistics. Stitch Fix delivers curated clothing and a personalized note from the stylist in every box. They also offer convenient try-on-and-exchange options to make the purchasing experience effortless. Imperfect Produce salvages ugly fruit and vegetables that otherwise wouldn’t make it to store shelves and delivers it to customers’ front doors. Subscribers can select the produce they want, including type, amount and where it’s sourced, and Imperfect will total how many pounds of food waste they save each week.
Why go to these extra lengths? Why risk complicating an already-complex supply chain? Because it adds an invaluable personal layer to each purchase, reinforces a company’s brand promise, and demonstrates the intent to build a lasting customer relationship as opposed to a one-off transaction. Your supply chain is more than a support function or cost-efficiency driver. It’s also a crucial part of shaping your customers’ experiences, and has the potential to be your competitive brand advantage.
It’s no secret the future of commerce is omnichannel. In fact, 73% of customers use multiple channels during their shopping journey. What does that look like? 38% of consumers have used their mobile device to check inventory availability while on their way to a store, 34% have used their mobile device to research products while in a store, and 49% of consumers value “reserve online, pick up in store” options. This new omnichannel norm stems from the rise of the connected customer and the proliferation of e-Commerce — all of which has fueled an increasingly complicated logistics landscape.
While managing an omnichannel supply chain may seem daunting, multiple touch points with a customer actually present a valuable business opportunity. Omnichannel shoppers have a 30% higher lifetime value than those who shop using only one channel. Why? Consider the buy online, pick up in-store example. That additional in-store touch point drastically increases the chances that a customer will complete another purchase. It’s why the likes of Ulta, Nordstrom, Home Depot and Target are focusing on cross-channel inventory optimization for online and in-store purchases. Furthermore, customers today know they can get what they want, when and how they want it. Companies that can consistently deliver on this expectation will continue to earn a customer’s business.
Though brands are facing ever-rising customer expectations, access to new technologies and logistics solutions can equip them to not only face the new omnichannel reality, but to embrace and translate it into real business value.
Prioritize Delivery Experiences
All too often companies focus on a consumer’s first impression — a web site homepage, a storefront or a targeted advertisement. Yet consumers’ final impressions, from checkout to unboxing, is also paramount. The delivery experience can either drive customer retention and future sales or sour the entire relationship.
More than half of customers will abandon a potential purchase due to additional delivery costs, and 60% of consumers won’t do business with a retailer again if their order arrives damaged. On the other hand, 76% of consumers say that high-quality packaging helps brands build trust. Clearly, there’s an opportunity to take advantage of final touch points along the customer journey to make a lasting impression.
One way companies can cultivate a positive delivery experience is to champion eco-friendly delivery methods. For example, Square Baby recently announced that it will use compostable insulation for its packaging. Beyond preserving the perishable baby food within each box, Square Baby is delivering a meaningful message to parents — for them, sustainability is equally important as their bottom line.
Because fast, inexpensive shipping is now assumed, businesses must look for additional opportunities to upgrade the delivery experience and earn customer loyalty.
Invest In Supply Chain Talent
Robotics. Automation. Artificial Intelligence. Logistics leaders are investing in new technology to improve their supply chain processes. However, businesses must also remember to invest in people. Businesses can’t meet the customer demands of today without the talent behind the technology.
From warehouse workers to project managers to engineers, an efficient supply chain depends on a unique and diverse range of skills. And the industry is growing. Between 2010 and 2020, the number of available jobs in the supply chain industry is estimated to grow by 26%. Yet the logistics talent pool is facing a shortage of qualified candidates.
Companies are hard-pressed to recruit and retain talent, in part due to misperceptions about supply chain roles in the market at large. Remember, less than half of logistics executives believe the supply chain will be a brand differentiator. College graduates today want to change the world, they don’t want to be a part of a support function. Walmart’s in-house incubator, Store No. 8, is a perfect example. It focuses on developing next-generation technologies to fuel retail and the logistics behind it, stating on its web site “we have the opportunity to make a positive impact on a massive scale.”
Aside from standing up a state-of-the-art innovation lab, what can companies do to attract top talent? One approach would be to cast a wider net. When hiring, consider candidates from different backgrounds with diverse experiences.
Create Competitive Advantage With Your Supply Chain
In the past two decades, supply chain managers have had to use a clunky, outdated process to support an entirely new business model. With e-Commerce, moving goods from point A to point B won’t ever be the same. Customer standards demand more flexibility. Your supply chain is more than a business niche; it’s the undercurrent of your brand and customer loyalty.
Karl Siebrecht is a seasoned tech executive with experience at both startups and large global corporations. With FLEXE, Siebrecht is building the world’s largest open network of collaborative warehousing. Before co-founding FLEXE he served as CEO of AdReady, a Seattle-based ad tech company, and was President of Atlas at aQuantive prior to its $6B acquisition by Microsoft.