How was your online shopping experience during lockdown?
Shopping online increased markedly during lockdown and it was a mixed experience from both anecdotal and quantifiable evidence. Many customers have been less than delighted by their experience buying items from high end smartphones to simple mops and buckets[1]. The commerce commission have seen a significant rise in consumer complaints about selling online in the last month[2]:
“Complaints include traders advertising goods that are no longer available, claims about delivery timeframes that are not being met, cancelled orders, general frustration about lack of communication and extensive delays in getting a refund, processing orders and receiving goods, including click and collect orders.”
The easy part is launching a website, app, social media page, opening up a call centre or putting a new salesperson on the road. The hard part is actually having the supply chain behind this, the capability, capacity and process to deliver the fulfillment of an order and a delightful customer experience. This is challenging to do at speed while under the stress of a pandemic. Even mature retailers with good supply chain discipline for bricks and mortar stores learnt the hard way that they ‘need to sharpen up, particularly in the back-end processing’[3]. However, some have done it and been successful at changing their business model[4]. Most of us could have been better prepared and changed at a measured rate; this should not have been a surprise with online shopping growing back in 2018 and a call to action from Neilsen at the time[5]:
“When it comes to shopping, New Zealanders are increasingly digital, with two-thirds shopping online in the last 12 months – up from 37% in 2006 and expected to hit 83% by 2026.”
So, if you want to rectify problems, get ready for the continued digital purchasing trend or look to continually improve as we all should be as a standard practice, then please read on and challenge yourself as to how you can delight your customers and become as competitive as you can.
Whilst online shopping has been a current topic, it is part of an ongoing challenge for businesses who have to think about the many different channels available now, through which customers want to interact with them. Customers can hop between channels empowered by the ease of the phone in their pocket, compare products and services, and have an expectation for time sensitive deliveries and free shipping[6]. You may have many channels to market, but today people tend to not stay in one channel, so it is no longer a multichannel approach you need, but an omnichannel approach[7].
''Omnichannel customer experience is defined as a cross-channel customer-centric approach through which a company aims to provide a seamless, unified and contextual customer experience, irrespective of device, channel or platform of interaction.''[8]
There are subtly different implications of this concept if you are servicing customers directly or indirectly:
From the perspective of B2B businesses it is important to grasp the new dynamic your B2C customers are facing and anticipate how you can help them. Do you need to package your product differently for different channels, or hold stock in different locations and of different sizes to aid their agility? The other option is that B2B businesses go direct to market themselves, if they have the supply chain agility in place already.
As a B2C business you need to know who the customer is, help them decide the product to buy, whilst knowing the status of their order in whatever channel they are in.
The need for agility is not a new concept. Harvard Business Review predicted this back in 2011, but New Zealand has been behind the adoption curve in many ways. This was changing slowly, but due to Covid-19 there is an imperative to change. Indeed, DHL say Omnichannel is a must-have for businesses to solve in the next 3-5 years[9].
The recent pandemic has shown us that we need to be agile enough to be in whichever channel the customer wants to transact with us via, and to beat the competition we must be able to delight the customer. So, how do we enable this business agility? The agility comes from your supply chain capability, whether you make it your core competency or engage a partner, it needs to be able to allow you to pivot quickly.
We should not constrain our thinking of omnichannels to the large product retailers. Today this could be any type or size of company, such as a ‘ghost kitchen’ who may supply take-aways via a fulfillment partner and be a customer facing restaurant at the same time[10]. Hence, New Zealand companies in their small competitive pools are ripe for being disrupted if someone else enters the market or changes it. Intent has developed a model from their experience in supply chain and business process excellence to help you understand where you are on the journey towards delighting your customers. The questionnaire below is an introduction to the model and is designed to prime your thinking and highlight areas for you to focus on.
With consumers out in front leading the need for the change, it is only right that the customer segmentation and understanding should be central to the first few questions that lead into the model. A good supply chain is aware of the demand, where it is, what it is for and how much[11].
1. Does your strategy include thinking about what channels you will utilise and what level of service you intend to provide?
2. Is your strategy driven by data insights[12] about your customers, channel use and product sales?
3. Have you segmented your customers into one of the four behavioral segments and the resulting four supply chain types to service them: Fully Flexible, Agile, Lean, Continuous Replenishment?[13] [14]
4. Do you have an agile integrated solution to deliver in any channel?[15]
5. Are your warehousing, distribution centres and logistics functions fit for purpose to deliver a meaningful fulfilment process?
6. How mature is your Sales and Operational Planning team and process? This is pivotal to success[16].
7. Are you convinced that you have kept the promised delivery timeframe and quality expected by every customer?
8. Are your customers delighted when they use your product or service for the first time? Can you measure this?
9. When faulty product has been dispatched, how well do you re-capture your customer, using efficient logistics to collect product and provide a replacement?
10. To make lasting and successful improvements in your business, are you ready with your project team and change management approach?
11. Do you know where to start?
Challenge your leadership team with the questions above. Once you understand where you are collectively, think about areas to focus on and see if you can define a clear plan of action. The end result you are looking for will be a more secure and resilient business, underpinned by a capable supply chain that is closer to its customer and one that can delight them in the way they expect and will pay for. If you need support, Intent Group has a strong team of capable and experienced supply chain experts who can help you to drive your improvement journey.
If would like to talk to one of our Supply Chain experts, then please give us a call. We can have an informal chat which may satisfy you that you are on the right track, or it might lead into some deeper thinking with our model.
[1] https://www.stuff.co.nz/business/121401867/online-shopping-still-fails-to-capture-kiwis-enthusiasm
[2] https://comcom.govt.nz/news-and-media/media-releases/2020/commission-reminds-retailers-of-their-obligations-when-selling-online [3] https://www.stuff.co.nz/business/121371750/covid19-catastrophic-briscoes-says-as-it-reveals-sales-drop [4] https://www.stuff.co.nz/business/121401867/online-shopping-still-fails-to-capture-kiwis-enthusiasm [5] https://www.nielsen.com/nz/en/insights/article/2018/online-shopping-seeing-huge-growth-in-new-zealand/ [6] ANZ Transport and Logistics Report: At the crossroads Oct 2019 [7] https://hbr.org/2011/12/the-future-of-shopping [8] https://marketing.toolbox.com/articles/what-is-an-omnichannel-customer-experience-definition-journeys-and-examples [9] https://www.dhl.com/global-en/home/insights-and-innovation/insights/logistics-trend-radar.html [10] https://www.stuff.co.nz/business/113175178/the-benefits-of-running-a-virtual-restaurant [11] https://en.wikipedia.org/wiki/Demand-chain_management [12] https://www.mckinsey.com/business-functions/mckinsey-analytics/our-insights/achieving-business-impact-with-data [13] https://www.gattornaalignment.com/wp-content/uploads/BLOG-4-Future-proofing-enterprise-supply-chains-managing-in-a-parallel-universe-12-May-2020.pdf [14]https://www.ceda.com.au/CEDA/media/Attachments/pdf/10328~gattorna_nsw_presentation_20060726.pdf [15] ANZ Transport and Logistics Report: At the crossroads Oct 2019 [16] https://traccsolution.com/blog/supply-and-demand/