Your Silos are Costing You Customers

With news of Amazon around every corner, it’s clear that the retail behemoth is doing more than just expanding its own eCommerce market share. As consumers start to imagine a “Prime” world, every supply chain, logistics, customer care, and eCommerce leader knows the realities of having an “Amazon strategy,” whether that means competing with Amazon, leveraging Amazon for traffic and sales, or simply just trying to understand their tactics.

Supply chain and logistics teams can definitely thank Amazon and the last mile for moving front and center in the office, according to IBM VP of Enterprise Operations and Services, Joanne Wright. In other words, supply chain is cool again. Being “cool” in this scenario, however, requires bearing the burden of a lot of responsibility.

As every leader reflects on how Amazon has changed their roles over the last ten years, they need to also accept that expectations around the last mile will continue to rise and will continue to put the customer front and center. It’s up to them to create a balance between rising transportation costs and customer demands.

Roadblocks in Digital Customer Experience

According to our most recent survey with EFT “The Perfect Order: Overcoming Roadblocks in Last Mile Experience,” most logistics teams understand that meeting customer expectations is more important than ever, and more are even being held accountable for CX metrics such as NPS and CSAT in their KPIs. Still, most (89%) don’t feel confident that their current tech stacks, data, and information will help them improve. Only 5% report that their current systems fully support efforts to improve the customer experience, compared with 3% two years ago.

Without control over the delivery experience, brands are setting themselves up to lose in the last mile, the leg of shipping that gives the customer the first interaction with their brand and product. Especially when 94% of consumers will blame the retailer — not the carrier — for any issue that comes up in this leg of the delivery, it’s imperative that brands get the delivery experience right the first time, or else risk losing customers. 84% of consumers will not return after just one poor delivery experience.

When Dealing with Spreadsheets Turns into Analysis Paralysis

With a new focus on the ever-evolving, ever-demanding customer, supply chain leaders need to merge their infrastructure and data to form a more cohesive culture. With technology advancing rapidly, any laggards in this regard risk losing out on customer acquisition and customer loyalty.

The EFT survey showed that although shipment exceptions (which occur in the forms of delays, damages, and more) can affect 12% of all deliveries, many companies lose any semblance of control over the delivery experience once shipments are out of their hands. ⅔ of supply chain and logistics leaders said that connecting disparate data quickly is among their top three challenges, and 18% reported that they had zero visibility into distressed shipments. Even if there are issues with deliveries in-transit, only half of supply chain leaders surveyed did not have a process in place to support escalations with carriers.

SCM leaders and their teams face daily analysis paralysis as they aim to quickly pull reports and improve delivery conditions in real-time. During 2018’s CSCMP, DC Velocity’s David Maloney warned that companies who use spreadsheets are bound to organizational fragmentation. In order to optimize spend and carrier mix while managing customer expectations, companies will need to expand beyond this horizontal view.

According to Forrester Principal Analyst and expert in the retail space, Sucharita Kodali, the cost of silos can really add up for retailers. She says, “It [Investing in the last mile] is something that is important, and it drives a lot of costs for retailers, especially when consumers don’t know where their package is.”  

Dropping Money on the Floor across Your Organization

But how does the inability to connect disparate data all add up into organizational costs? In addition to inefficient transportation management, it amounts in a very confusing digital customer experience and additional costs and time for retailers who have to answer “Where is my order?” (WISMO) calls.

“It [Investing in the last mile] is something that is important, and it drives a lot of costs for retailers, especially when consumers don’t know where their package is.” -Sucharita Kodali, Forrester

These “moments of confusion” that exceptions or miscommunication cause place the burden of responsibility on your customers. Not only do they place additional costs on your Customer Care team, but you risk losing customers, affecting your Digital/eCommerce teams as well. These teams, who are spending time and money acquiring customers, will finally get customers to convert, only to lose them to a negative shipping experience that could’ve been avoided.

In the EFT survey, Kodali says, “One of the single biggest reasons that retailers get calls to their call centers is that consumers often want to know where their package is, or why it’s late. So having visibility into that last mile and having better processes around it are things that can be really helpful to the customer experience, at least in eCommerce.” 

Collaboration is Key in Last Mile Success

According to our survey with EFT, supply chain and logistics leaders know that collaboration across internal and external teams needs to be a source of truth — 87% believe access to shared data and improved collaboration between teams is important to long-term success.

That’s why it was so surprising to learn the following from our survey:

  • 53% don’t make delivery data accessible to their marketing or eCommerce teams
  • 60% of customer service and logistics teams don’t share delivery feedback or data about distressed packages with each other

Logistics and supply chain teams impact a critical touchpoint that can make or break the customer experience, and interaction with other teams is necessary to make improvements. If any delivery exceptions occur, customers want to know about it, but having a tracking page is just the bare minimum. They don’t just want their brands to let them know that a damaged item is at their door, or that their delivery will be late. That just leads customers to call in, costing brands additional time, money and customer appeasements. 

“One of the single biggest reasons that retailers get calls to their call centers is that consumers often want to know where their package is, or why it’s late.”

Most of all, customers want to know that brands have a plan of action if their delivery goes off the rails. When 93% of customers want to be notified of delivery exceptions, retailers should not only monitor shipments for damages and issues that happen in-transit, but use connected data to trigger automated actions, such as alerts, to improve customer communication.

By proactively notifying customers and making changes in-transit, brands can divert money spent from customer appeasements and reactive issue management — both traditionally thought of as the “costs of doing business” — into initiatives that grow their business. But they can’t do it without seeing and understanding delivery issues that are making them lose money and customers.

Jump over Hurdles to Effective Delivery Experience Management

Many brands, such as Grove Collaborative, have seen that successfully taking action not only results in happier customers, but also in increased efficiency across the board. Grove created a small Exception Resolution team dedicated to tackling their top customer-facing exceptions: damages and incorrect addresses. Due to this change, their team has been able to solve over 110,000 points of contact in a single month, increase their NPS scores by 9.4%, and save $65 per shipment from proactively handling damage claims and $23 per shipment from resolving incorrect addresses. It gave them the time back and the budget necessary to take on customer engagement initiatives that would eventually improve AOV by 50%. 

Improving the digital customer experience requires a fundamental shift in culture, measurements, technology, and processes. When Supply Chain, Logistics, eCommerce, and Customer Care work together to access — and correctly utilize — data, they are empowered to transform CX and retain loyal customers.

Download our report, The Perfect Delivery: Overcoming Roadblocks in Customer Experience, to get more insights and tips on how to perfect your last mile experience.