Mastering Customer Experience in the Supply Chain: Strategies for Success

Ready to revolutionize your supply chain's customer experience? Discover the secrets to transforming every touchpoint into a seamless and satisfying journey for your customers. I'm Tony Hines, your guide on the Chain Reaction Podcast, where we unpack the intricate details of enhancing customer satisfaction from initial product research to the final purchase decision. By stepping into the shoes of your customers, we dissect the ease of navigating your website and the quality of customer service interactions, ensuring a transparent and straightforward experience. Reflect on the strategies of other successful companies and gather actionable insights to elevate your own supply chain efficiency.

But that's not all. This episode dives deep into evaluating company reputation and reliability, essential for informed business decisions. We explore the challenges of global procurement in the fashion industry and the pivotal role of buying offices in maintaining quality and compliance. High return rates in online shopping are a significant pain point, and we tackle this issue head-on, discussing its impact on customer experience. Finally, we examine the complexities of retail returns, particularly in the fashion sector, and offer strategies to optimize customer satisfaction while minimizing returns. Tune in for a comprehensive guide to mastering customer experience in the supply chain.

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Chapters

• 0:04 Customer Experience in Supply Chain
• 8:06 Supply Chain
• 15:21 The Challenges of Retail Returns

Transcript

Tony Hines: 0:04

Hello Tony Hines, here You're listening to the Chain Reaction Podcast, all about supply chain advantage. Great that you could drop by today. We've got a great episode coming your way in just a few moments and if you want to find out more, then stick around, stay tuned, get informed. Hello Tony Hines, here You're listening to the Chain Reaction Podcast. Now tell me this Is your customer coming back, or is it simply goods that come back?

Tony Hines: 0:36

Well, it's all down to experience the customer experience, chain Reaction. Well, I'm going to ask you to put yourself in the shoes of a customer today and think about your supply chain and how it works for that customer. If you were the customer, would you be pleased with the service that your company offers? That has to be a key question, doesn't it? Whoever that customer is, whether it's a business to business customer or a consumer, whoever that customer is, whether it's a business to business customer or a consumer, are you providing the service that you would expect if you were that customer? And if you can't honestly answer that question with your hand on your heart with a big yes, then you want to look for reasons why you've answered the question the way you have and if you think about answering those questions in detail. You might begin by following the whole process of the customer experience, from start to finish, and that's a really useful way to think about whether your company, your organization, your particular supply chain is serving the customer as well as it could. So that's what we're going to talk about today, and I'm going to give you some prompts and some questions that you can answer along the way, and you can think about investigating your supply chain as if you were the customer. So let's think about what the customer journey looks like and we'll start from there.

Tony Hines: 2:02

Well, you'd often start with somebody sat, maybe at a terminal, browsing for a particular product or service that they want to procure, and at that point, the customer's exploring products on your platform. If it's an e-commerce website or a physical store, they do the same process. So, as a customer, it's taking a look at what's on offer, and some of the questions for you might be are you easy to find? Is your website navigable? Is it easy to find the way around your website? Is it too cluttered? Is it difficult for people to find products or services on the website? Do the menus link together and do you have links to help the customer find their way through that website or is the website confusing and difficult? Now, if you answer any of those questions and you say, well, the website is a bit tricky, it's a bit difficult, it does have a lot of stuff on the front page, on the landing page, and once you hit that there are too many things for the customer to look at rather than the thing that they've perhaps searched for. And if you answer yes to that particular question, then you might want to rethink or redesign your particular website.

Tony Hines: 3:23

And this is the first point of entry. Remember the first contact that they make with your organisation? Now, it may not be a website. The first point of contact. It could be a phone call. And again, is it easy to get through to a department or a section that they need to get to to find out about the product? Is the quality of advice that they will receive when they've made that call sufficient for them to want to do business and progress further with your organisation? Is the voice at the other end friendly, informative, not misleading, not rude in any way, not off-putting, but actually suggesting that to do business with us, we will look after you and your needs?

Tony Hines: 4:09

Now, you might think this is superficial and some of you out there will probably think well, that's sales, that's marketing. Well, yeah, it is. But guess what? It's also the start of the supply chain and it's the start of the journey of someone getting to know your business. So it has to be quality, it has to be a good experience, it has to be well thought through and you have to avoid simple errors, simple mistakes, confusion or chaotic contact points and, of course, in our days, or chaotic contact points and of course in our days we talk about omni-supply chains or omni-contacts. And what we mean by this omni-phrase is that people come in different directions to your organisation. They come through different channels and we talk about the omni-channel experience. There are lots of touchpoints at which customers reach out to your business and each one of those touch points has to be fully operational and it has to be clear to the customer that they are able to get the information that they need to make a decision For the customer remember it begins with the product research.

Tony Hines: 5:24

They'll compare features, prices and reviews of your product before they make any informed decision and in making those judgments from the research prior to contact, when they do make contact, you have to capture their interest and help them understand how you work, how you will supply those goods and how you will be reliable and deliver on time at the prices that you've advertised or committed to during the contract. After that browsing and product research stage is over, they decide whether they're going to buy or not, and that might mean on a website adding something to a cart as simple as that. Or it might be that they have to speak to you to set up a contract for supply, and the steps in that have to be clear too, and it has to be easy. Remember all the time. These things have to be straightforward, easy and clear, have to be transparent to the customer.

Tony Hines: 6:30

What's happening Now? I just want you to reflect at this point for one moment and ask yourself this Think of a company that you bought something from, either as an individual or for your own business, and answer the question what did you like about the way that company dealt with you? What were the key things that really struck a chord with you that you thought, yeah, these are a good company to deal with? And just pick those out for a moment. We can learn a lot from our own interactions with other businesses, and there'll be things that we really like about the way that business handled our first inquiry, our first order, the processing, the information that we received and the knowledge and perhaps the satisfaction that they delivered on time at the price agreed and there were no glitches. It was a very professional operation and that really strikes a chord when that sort of thing happens and everything goes smoothly and you might not learn the lessons at that point in time, you might not even reflect back on your own business, but some of you will, some of you will, some of you will be thinking, gosh, I wish we could do it that way. I wish we did that so you can learn in this process of purchasing yourself from somebody else and the way they deal with you, and there'll be companies that you admire and companies that you really would never do business with ever again from the experience that you had as a customer.

Tony Hines: 8:06

Now, one of the other things you do when you're investigating a company and you're looking at the background, you'll think about their reputation and you might look for reviews about what others have said about that company or the dealings with that company. Or you listen to people that you know in your industry, in your businesses, that you're in contact with and you might ask about their experiences with dealing with that company Are they a good company to deal with? And when the replies come back and they say, oh yeah, they're great, you know, they're really good, they did everything that we asked and they went beyond to do this and do that, then you get a feeling of, yeah, I'm making the right decision by going with this company or no, there are some big question marks here. I need some further information before I do any business with this company. Or it may be that you pull out at that point and say, well, I'm not going to risk this, there are other players out there, other suppliers, and I'll go somewhere else. It's just not worth the hassle. And you get a feeling about which are good companies, which are good businesses to go for. But it isn't just feelings, because if we made decisions just on feelings although sometimes we do but if we made them just on feelings, then we'd be remiss.

Tony Hines: 9:22

As a professional buying goods for our business, we should look at the data, look at the facts, and we should also perhaps employ the technology that's available to help us make that decision, providing us with data around that company and some of the issues that they face, and we'll look at things like certifications. What do they have? Do they have all the quality certifications that we require for the purchasing of the equipment or the services or the goods that we're actually interested in buying? And that should be a given that they have those before we proceed. So how are you doing so far, putting yourself in the shoes of the customer? Do you think your company is doing well against the sort of criteria that we're discussing here? Are you a good company to approach, to deal with? Is it a pleasure to do business with you? I mean, that's what you want it to be, isn't it? No-transcript.

Tony Hines: 10:38

Now, companies spend an awful lot of money procuring and sourcing goods around the world, and the bigger you are, the more you spend goods around the world, and the bigger you are, the more you spend. And sometimes those companies will have buying offices in faraway places where they have staff who will look after every detail of that procurement exercise. The fashion business is an interesting business because that's typical of some very large retail organizations where they have buying officers in global locations around the world where they source their goods from, and I've spent some time with lots of people in buying offices in faraway places in South Korea, in China and, of course, in Sri Lanka, and those officers perform a very important task for the brand. It's not just about buying, of course, or procuring, but it's about observation. They're research posts as well, because they see all kinds of companies operating in the sphere of operation. Many times they work in the same production units.

Tony Hines: 11:51

So what I mean by that is they will source product from the same supplier and they will see how those different suppliers respond to the different organizations they work with. And, of course, they might socialize and they might talk to other people. So there's a hidden discussion, a hidden conversation, perhaps hidden from the public's eyes, about what's going on in any particular place at any one time, and the industry itself will share to some extent some of the secrets that they've acquired. Of course, they won't necessarily share trade secrets, unless it's in error, but they will share conversations about who's good to deal with, where you can go to for a particular design, a particular fabric, a particular style of operation that suits your business. That might include how they work with you, how they design the product, how they work to the specifications that they're given and the kind of failure rates that they have. How often do they fail to deliver on time, complete? How often do they need to take retrospective discounts from particular suppliers? Suppliers and there's a whole way of working and they have manuals that tell them how to work with the brand or the retail organization in these supply companies and they have to comply. There are whole lists of checklists for them to comply and make the product in a particular way, and these arrangements are all designed to bring the customer experience that consumers want when they buy fashion goods in their retail stores. So it's a complex business.

Tony Hines: 13:37

If we pursue the fashion industry for a second, just bear with this and we think about that customer experience in a retail store. People go in, they see goods and the things that they like on the rails. They'll grab them off the rails and they'll go to a changing room and try them on and they'll perhaps buy one of the items or two of the items or three of the items, a number of items that they actually like, and they'll take them away from the store having bought them. Now, they don't always stay bought, of course, because one of the big problems in this industry is the level of returns, so they might take them away. They might have bought them on a Friday or a Saturday to wear that day later or for an occasion that's coming up, and they'll try it on, and over the weekend they might change their mind and decide to take those goods back. And this industry suffers from about 30 to 40% returns. But of course, it's even worse because those returns can be higher when they're bought online. So people will often look at something online and think, yep, I'm going to buy that particular dress, that particular jacket, those particular trousers and so on, and then it'll get delivered to the home and they'll try them on, and they might even buy two sizes of the same dress or the same jacket, but they're not going to keep them both. They might only keep one. In some cases, when they actually get the jacket or the particular item of clothing and they have it at home and they don't like it, they'll send them all back. And so thereby hangs a tale of the high level of returns in this industry.

Tony Hines: 15:21

Now, returns, of course, are a double-edged sword for the retail organization. On the one hand, you want to be selling the goods, but on the other hand, you don't want to have to be taking them back. And of course, many of those returns come back at no cost to the customer, but at quite a big cost to the retailer. Because the retailer has to do one of two things they have to check those goods, see if they're resaleable, see if they're clean. If they are, they might be able to replace them on the shelf or on the hangers after they've taken precautionary steps to ensure that they are. But of course, that's no mean feat and you need staff to do that, and you need staff who are experienced and qualified. You might also need cleaning facilities if you're going to clean materials, and many retailers can't be bothered with having those processes in place.

Tony Hines: 16:16

So what they will then do is they will simply discard them and they'll either sell them off in other stores, maybe an outlet store, maybe sell them in bulk to somebody else who can sell them on when they've trimmed all the labels out of them, or they might have to just throw them away. And in the worst cases, when they throw them away, where do those clothes end up? Well, they'll end up in landfill, and you might wonder why clothes are so expensive at times, and that's one of the reasons why there's a higher cost in landfill and you might wonder why clothes are so expensive at times, and that's one of the reasons why there's a higher cost in clothing because retailers are working on tight margins and they're trying to make sure that they achieve those margins. And if they can achieve those margins, all well and good. But if they can't, then the rest of the range that's in the store carries the cost and it might mean turning a profit across the range into a loss across the range because of the high level of returns.

Tony Hines: 17:17

Many retailers have recently been attempting to actually charge for those returns, but the problem with that, of course, is that consumers have become used to no cost for those returns. But the problem with that, of course, is that consumers have become used to no cost for those returns. So it's a very tricky decision to go out and charge for returns. The customer experience generally is good because they know they're going to purchase an item and they can buy it with safety, in the full knowledge that if it doesn't fit or for some reason, they need to take it back to the store. They can do, and when it's free it's easy, and many question whether it's really worth returning to the days of when people used to not accept returns or charge a premium for them. The other side of the coin is this those returns cost money, yes, to the retailer. So here's the thing. Do you remember that Elvis Presley song Return to Sender? Well, part of the fashion industry have adapted that song to Return to Lender because the customer has taken him for a ride.

Tony Hines: 18:27

They also cost the loss of the production and that means higher prices for everyone. And not just that, it also adds to the waste, and the waste pile in clothing and fashion is high. So if we had a way to reduce waste, limit waste and match directly production with consumption, then that makes an efficient market, and in many industries that's possible. It's easier. It's easier than it is in fashion. But fashion's been a bit lax in the sense that they have simply produced mass garments for the public to consume and they've made it very easy to buy because they know by making it easy they can make more profit. But in recent years, with the increase in online sales, that equation is becoming even more volatile.

Tony Hines: 19:30

Now the customer experience is about service, and it's service from the organisation, and that means service from the supply chain that's behind the delivery of the product to the customer. People create a brand, they create an image, they create a marketing message. They create an image, they create a marketing message and they create an environment, either in-store or online, to make the customer feel at home and want to purchase goods from that organisation. And that's whether they're a customer, as we've talked about, in the retail sense and we've given the example of the fashion industry, or whether they're an engineering company selling products business to business. There are similarities in the approach here to satisfy the customer and to give that customer a good experience with your organisation.

Tony Hines: 20:20

And so when we think about the customer experience, we design it. It's a design problem and we design and we optimize. We optimize our inventory, we optimize our service engagements, and that makes the processes efficient. And so it's very important to think about how we design the customer experience, whether it's online, face-to--face or in any other situation. We must design it carefully. We must design it so that we funnel the customer through the process to where they want to be and that appears seamless to the customer, so that they think well, I could come back to this company and do a lot of business, because you want returning customers.

Tony Hines: 21:07

You don't want returned goods, you want returning customers, and returning customers means more profit. Returned goods means more cost and there are all sorts of reasons why customers return goods. It's not just those instances we've talked about in the particular case in the fashion industry, but there are other reasons too. There might be defective products. Often when people don't pay, it's because they've got a beef with the company. Usually there's something wrong with what they've bought and they want to have a replacement or they want to return the goods for that reason. So anything you can do to avoid returns in the process by designing your systems better and avoiding any damage in getting those goods to the customer by having good delivery services and efficient delivery services that minimize the time that that product is in transit to the customer is important.

Tony Hines: 22:05

The longer goods are in transit, the more risk of something going wrong, either the goods being damaged or going missing and there's lots of theft, of course that takes place between the point of supply to the transit companies who deliver and somewhere between there and the customer. Goods can go missing. And of course this means another choice for the supplier organisation. They need to deal with reliable companies in their logistics functions. If they don't manage their own logistics, they need to deal with companies that are reputable in 3PL, 4pl, and there are plenty of reputable companies and they need to deal with local delivery companies again, who are reputable, to protect their brand, and that's important too. Don't forget damage to your brand can come from somebody that you've employed in the organization, that is, not just the employees in your organization. I'm talking about contract firms, firms that you do business with, and so it's very important to establish relationships that are going to work for you and the partner in the supply chain, going to work for you and the partner in the supply chain.

Tony Hines: 23:26

Even if you take all these steps, of course, there are no guarantees, because we can still have volcanoes, tsunamis, climate problems, we can still have ships that sink, trucks that crash a whole host of other things that can happen. We can have theft from a ship, from the cargo, from the trucks, and so on. So there are many other problems which can still occur, and that's, of course, why we have insurance to take care of some of those matters. It's also why we manage and optimize our inventories. So then, if we do have those sorts of problems, we've still got inventory somewhere that we can supply to our customers. What we want to establish with customers is that seamless relationship between the supplying organization that's very reliable, on time and always complete and at the prices agreed, rather than somebody that's unreliable. So that establishes our brand and our reputation.

Tony Hines: 24:35

So that's it for this episode. I hope you've enjoyed it. I hope you've perhaps learned something, or even if you haven't learned something new, you've revisited something that makes you think about something you can do in your organization. And if you liked the episode, don't forget to give us a like on your platforms. And if you want to listen to more, then drop by the website and pick up those episodes that you want to listen to and subscribe so that you're always first to know about new episodes. So I'm going to leave it there and I'll be returning with another episode of the Chain Reaction Podcast shortly. I'm Tony Hines'm signing off. Bye for now, thank you.