Wednesday, August 22, 2012

Creating Compelling Customer Experience

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When retailers think of customer experience, supply chains are generally not the top of mind. It is all about the glossy catalogs, slick web-sites, product images, interactive product experience, videos and all the other technology, media, and communication glitz bundled together and thrown on the consumer to make the sale! But what happens after the sale is secured? Is customer experience truly limited to slick product presentations and glitzy web-sites? Or is there more to it beyond the glitz, glitter, and glamor?

We believe that great products and presentation is simply a good start for a great customer experience. A truly compelling customer experience goes deeper, substantially deeper and is only enabled when the underlying supply chains can keep the fulfillment promises made and meet the customer expectations of time, quality, and service.

How can your supply chain make a difference in creating compelling customer experience? Supply chain competency affects all the stages of customer experience.

  • Promise: Imagine you were looking for some curtains to freshen up your room. You spend a good half an hour to search for the right size, material, design, pattern, and color. You check the hanging style, rings, tabs, and eyelets. You make sure it matches the d├ęcor and the valence. You compare it with alternatives, review prices and customer comments, and you are all ready to make the purchase. And then it happens – it is out-of-stock! This scenario plays itself all over the retail stores and online channels every day. And, nothing is more frustrating to a customer than the out-of-stock experience after investing a sizable amount of time to decide what they wanted. In most cases, this is a supply chain planning failure. A well functioning supply chain would enable accurate demand forecasts and well-stocked inventories at all the right locations in the chain to maintain a desirable service level to reduce the “out-of-stock experience”. When inventories are well planned, accurately tracked, and visible across the chain, faster replenishments, alternate sources to rush product to locations/channels with higher sales velocity, dynamic deployment of inventory-in-transit, and alternate fulfillment options (buy-in-store, ship-to-home) become available to save the sale.
  • Fulfill: What happens after the sale has been secured? For all non-store channels, the fulfillment typically is a process that requires coordination among several departments and processes across your organization. Is the payment confirmed? Has the credit been verified? What about fraud? Are all the products on the order available? What is best location from where to ship? Free shipping? Expedited shipping? One shipment or many? Promotions, returns, gifts: There are just a lot to consider between closing the order and the physical fulfillment. And, the expectations have never been higher, the best retailers are working on fulfilling the orders within two hours after receiving the order. Amazon is trying to provide same-day-delivery. Can you match your orders to the available inventory? How quickly can you do it? Can you optimally select the fulfilling location to reduce your shipping costs? Can you keep the promised delivery date to the customer – remember that is the only criteria that matters to the customer. What about alternate delivery options? Buy online, pick-at-store? Can you confirm the availability in the store before accepting the order? Can you hold it? How soon the order will be ready for the pick up? How about Buy in-store and deliver-at-home? Once again, the key is to have a well-oiled supply chain. Perfect order fulfillment is no more a pipedream, if you have a supply chain that is well designed to support your needs.
  • Keep it Visible: Finally, doing a great job on promising and fulfilling is not enough. Compelling customer experience means that the customer feels in control! Every step of the way, can you keep her informed? If one of your shipments go missing, will your customer know? What about delays? Recalls? How good are your processes in capturing exceptions and alerting all stakeholders inside and outside your organization?
  • Returns: Make sure handling customer returns is not an afterthought! It is an integral part of the customer experience (and should be an integral part of your supply chain). How flexible are your policies? How flexible is the process? Can you handle cross-channel returns seamlessly? Even if your customer-facing processes for returns are taken care of, managing an effective reverse logistics function can be a challenge. Once again, a well designed supply chain not only supports flexible customer-facing operations, but also a cost-effective reverse logistics function that works equally well for the retailer. It must enable all the processes for handling credit, exchanges, disposition determination, reselling, re-packaging, refurbishing, returns to vendors, storage and management of returned hazmat materials and so on.

So next time you think of creating a compelling customer experience, think beyond the glitter. Think mundane! Think well-oiled operations enabled by a well-designed supply chain.

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Want to know more about supply chain processes and supply chain strategy? Check out my books on Supply Chain Management at Amazon.

© Vivek Sehgal, 2012, All Rights Reserved.

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