Bringing the store experience to fulfillment…close…but still long way to go.

I finally broke down and recently decided to upgrade for my iPhone. Side note, a few years ago, when the newest generation of iPhone was available it was treated like Christmas morning by some of us Apple fans. Some of us would literally wait online until the magic hour when you could pre-order the new version. Today, it is a non event. I will upgrade when I get to it, type event. For me, I finally broke down and upgraded after seeing the new phone at the Apple store, demonstrates the importance of a brick and mortar presence! Granted that pushed me to action, but I wasn’t as excited about it as in the past. But this post isn’t about the changes in behavior with getting a new iPhone. What this latest saga of upgrading my phone has provided an example of trying to bring greater experience to the fulfillment process. And how much we still have to learn.

Dreaming of the pacific…

Let’s set up the situation. My carrier is AT&T, I went through their portal to upgrade my phone. I went through the configuration – I went with the Pacific Blue option with 256 GB of memory. I selected my payment plan and then was told item could be delivered later in the week. Perfect. At least I thought. What happened next is a good effort by AT&T…but falls a little short. I was told that a customer representative would show up between 2-4 on Thursday, and spend 30 minutes with me. Hmmmm. Their tag line “we are bringing the store to you.” Makes perfect sense. I have been preaching the importance of making fulfillment a key part of the experience. Looking to replicate the in store experience at the last mile is a great example of this. However when it comes to the execution there remains much to be desired. While I appreciated the service, all I wanted was for the phone to be delivered to my address. I did not need to have a 30 minute tutorial on how to switch my phone. I realize I am not a millennial or a Gen Zer, but I can still switch my phone on my own, thank you very much. Additionally, I was told I would have to show ID and credit card…really? Are they delivering the Excelsior diamond to me? Finally they showed up, I was in the middle of all day meetings, couldn’t reach me and didn’t deliver the phone (mind you there is a perfectly safe location where packages are delivered every day). This started a cacophony of emails and messages from AT&T and their delivery service to try and reschedule the delivery. I also called AT&T customer service (the chatbot wasn’t working). Through all this communications gymnastics, I still don’t know when the phone will be delivered.

So what are some lessons from this awkward dance I am having with AT&T?

• Figure out how to bring added value to fulfillment: Clearly AT&T is trying to add value to the last mile fulfillment. But it is not one size fits all experience – some customers might want to be walked through the process of switching phones, others, like me, do not require this service. Make it an option. What about other value added services such as taking an old phone and recycling it? Could AT&T even offer to take back other small electronics for recycling or refurbishing? Headphones, chargers, tablets or even laptops that have accumulated in our homes. I appreciate the effort to add value added services to the delivery, but you must make sure that each customer truly desires and sees value in what you are offering. It cannot be a one size fits all.
• Communication is crucial: Like with many things in life, being able to communicate clearly is paramount. I appreciate AT&T and their efforts to communicate, however it has been disjointed and confusing. Between text messages from the delivery service, emails from AT&T, emails from the third party and a telegraph from Alexander Graham Bell, it has been clear as mud with regards to what next steps are. Even on the web site there is no clarity as to when delivery will be made. Have one central location to communicate – a centralized web location – so customers have a visual source of the truth. Any email or text message can always refer back to the location. If Fedex and UPS can do this, why can’t AT&T?
• Provide customers options…at the point of commerce: I realize that the goal is to simplify and reduce friction at the point of sale, so suggesting you ask for more decisions to be made might be counter intuitive. However, when it comes to decisions on delivery times and value added services at delivery, these are crucial variables that consumers will see value in. More importantly they impact the overall experience and need to be properly offered and accepted by the retailer before the “buy” button is pressed. I had no idea that I was getting a 30 minute session with delivery. I also did not realize having this service impacted delivery times. These need to be clearly explained and offered before the purchase is made. I am all for providing value added services tied to fulfillment, but you need to make sure your customer is aware of the offering, understands the value and is allowed to make a choice as to whether or not to leverage these options.

So I will see when this Pacific Blue iPhone arrives. Maybe 5 years ago I would have been more worked up about the delay and not having my new toy….errrrr…device as soon as possible. Today I just focus on the break down in the delivery and the effort by AT&T to make this a more valued experience. A for effort, no grade yet for execution.

The biggest challenge in last mile – labor.

Last mile delivery is all the rage. I attend a number of supply chain and retail events on an annual basis, and what is interesting is the explosion in vendors offering “last mile” solutions that dominate these shows. No surprise. Companies such as Amber Road (now part of E2Open) GT Nexus (now part of Infor) or new kids on the block Project 44 and Four Kites, offer some flavor of visibility for long distance movements of inventory. With the continuing evolution of connective technologies such as IoT, the ability to track “where my stuff is” has become much more accessible to supply chains. The challenge today is the last mile. How do I optimize and better route that inventory when it is on its last leg of its journey? Not easy to say the least. But one area that doesn’t get as much attention in this discussion is the labor aspect. What I mean by labor is not the ability to find drivers (we know about the impending labor shortage in the truck driver world) but how to better leverage the labor at that end of the supply chain.

The hidden challenge in last mile delivery lies not only in optimizing how you get the product to the consumer in a timely and cost effective way, but what you do with this customer touch point. As the amount of retail converted online cracked double digits, 10.2%, earlier this year according to the US Census Bureau – click here for report, the importance of how brands and retailers look at the labor that is touching their last mile deliveries will only grow in importance. So what might this look like in the near term?

Photo by bruce mars on Pexels.com

Be polite…delivery people are customer satisfaction ambassadors. Any time you have a situation where a product or good is being delivered to a customer, you are representing that brand. This might be the only time that particular customer ever interacts directly with a person from that retailer or brand. We all have horror stories of poor delivery. I had lunch with a good friend of mine the other day and he was telling me about the fiasco he went through with furniture delivery. I will leave the name of the company out of it to protect the guilty…but needless to say it took three visits to deliver what should have been a routine one time delivery. My girlfriend and I had a recent run in with a moving company – Transworld Vanline – that was some of the worst I have ever experienced. The entire time we felt as if we were being extorted by the driver, felt like we were having to pay ransom just to get our stuff! And it was 2.5 months late!!! (The worst moving experience ever, don’t even think of doing business with these charlatans) Sorry I had to vent a bit. These stories highlight the importance of having the right labor in place for last mile. They are your brand ambassadors. Yes they have to do their jobs. Yes they have to be professional. But most important, you need to ensure you have true brand ambassadors working for you.

Last mile delivery also means first mile service. Last mile delivery is, as the term states, the last part of the journey for the item that you are delivering. Those pair of sneakers might have started out their journey somewhere in Southeast Asia, made its way across the Pacific, been unloaded in San Diego, traveled by rail to Mexico City and finally delivered to the customer eagerly waiting their new pair of tennis shoes. The product has completed its long journey. But the first mile of the experience with the product has just started. Can retailers and brands leverage this opportunity to help launch the first mile of service, the first mile of experience with this new product? Think of it, when we first get that item we are quite possibly at our happiest moment, it is like Christmas morning for a 5 year old. The opportunity is for these brands and retailers to take advantage of this positive emotion to build “stickiness” with that consumer. What value add can you bring to the experience? Retailers such as Lowe’s and Home Depot try to do this when it comes to installing large appliances, with moderate success. Fashion brands such as Louis Vuitton are contemplating using their own labor to provide true white glove delivery. Not only would they take charge of delivering that Neverfull tote bag, but they would want to ensure the customer is satisfied with the product. Was it damaged in transit? Is it the right size? Might they want some tips on how to care for it? Louis Vuitton would want to be there for the first mile of usage of the item, demonstrate to the consumer that they are there for her with this product and hopefully others in the future.

Turn last mile into a stage for the circular life of retail. Another aspect of retail that is starting to gain more steam is the importance of returns and the circular flow of inventory. While retailers and brands see the “last mile” as the last step for the flow of inventory, it is becoming simply the midpoint of that inventories’ journey. As consumers are throwing away an ever growing amount of goods and products – North American consumers jettison over 70lbs of textiles a year, the importance of how we handle end of life for products is becoming a priority. While we traditionally do not see this part of the supply chain as a responsibility of the brands and retailers that produced the item, this trend is reversing. Consumers are beginning to demand that products are sustainable and governments are starting to ask that products can be disposed of in a sustainable fashion. No longer will the last mile be the last time brands and retailers care about that item. Savvy retailers and brands will get ahead of this trend and start thinking of how they can be proactive when it comes to helping with the end of life for their goods and products. Can the last mile delivery be leveraged to also assist with the end of life for other products? I mentioned Home Depot and Lowe’s who are delivering appliances, they are also offering to take back the old appliances. Why couldn’t this model be expanded to other products? We already see Madewell encourage clients to bring in used jeans to receive discounts on a new pair. What if they delivered jeans, and could use that packaging to encourage clients to send back some jeans for the Do Well program. Could last mile carriers FedEx, UPS, USPS or DHL begin to offer taking back items from customers for retailers and brands who develop a similar model? Truly empowering the circular life-cycle of inventory.

The last mile remains a hot topic. But we need to go beyond simply trying to optimize and manage the delivery aspect of inventory (still a challenge I realize). Savvy retailers and brands need to think about how they can take advantage of this customer touch point. What other services and experiences may they offer their customer? How can empower the labor at the delivery end to best represent their brand? Can third party service providers enhance their offering by working with these retailers and brands to ensure their delivery people offer value added service? The retailers and brands that begin to rethink the labor and services for last mile will find new opportunities to ensure customer satisfaction and repeat business.

We all love the convenience of eCommerce, but sometimes what we order shouldn’t simply show up in a brown cardboard box, unceremoniously dropped off on our front porch.

McDonald’s all day breakfast – the empowered consumer drives the bus

Yesterday McDonald’s took the bold move in announcing the availability of breakfast all day across their 14,300+ North American locations, starting on October 6th. Click here for the press release. Now patrons will be able to order hash browns with their McRib sandwiches or get a tasty McGriddle for dinner…all those calories and saturated fats are sure to help anyone fall asleep faster. By some estimates this move could increase the breakfast goods sales by 4%. It is also a reaction to customer demand as well as an attempt also to reinvigorate the fast food giant who has been slumping as of late.

Coming to a McDonalds by you…all day…

With the hamburger market shifting towards more fast casual offerings such as Five Guys, Whataburger, Shake Shack and In-N-Out Burger. As well as facing competitors focused on just selling chicken related fast food, such as Chick-fil-A, and the fact that Mexican and Asian based fast foods are outpacing the burger chain – McDonalds has to figure out how to turn the tide. While time will tell how the customers and the market reacts to this move, there are some lessons to be drawn from it:

• The empowered consumer strikes again. One of the major shifts we have seen with the digital economy is the increased power in the voice of the consumer. The customer has a voice – social, they have the reach – mobile, greater choice – the internet and thanks to folks like Amazon, have high expectations with regards to product variation. Consumers are no longer willing to accept a limited number of choices, rather they have been trained to expect and demand a large array of choice. With regards to the food industry this is no exception. Consumers don’t accept being limited by arbitrary time limitations on menu items or even not being able to customize their orders. All one has to do is listen to the orders that are throw about in Starbucks – grande skinny vanilla latte with an extra shot or venti soy latte with extra foam…it seems at times the options are endless. Consumers have been trained, in part by the likes of Amazon and Alibaba, to expect a high degree of choice. And by the likes of Dell to expect greater control in customization. The genie is out of that bottle, it will be up to retailers and consumer facing businesses to react accordingly.
• Supply chains get none of the glory but all of the work. It is easy for consumers to expect companies like McDonalds to “flip” a switch and add breakfast items to the all day menu. Consumers at times can grow frustrated as they see a lack of action on something that appears so “simple” to the outside. The reality is the supply chains are the ones that have to keep up, and that is not a simple endeavor. McDonalds will now have to rethink their replenishment and inventory strategies – ensure that they increase their stock of breakfast foods so sustain all day demand. McDonalds and their franchises will have to keep a eye on how their demand patterns shift as well. When they offered specific menus at set times, they could at least contain demand patterns to specific times. Starting in early October demand patterns could be turned upside down. It will be crucial for McDonalds to quickly understand how these shifts will impact their distribution models within the supply chain.
• Don’t forget the process changes to your supply chain. How about the manufacturing process, aka cooking? Each McDonalds kitchen is optimized to be able to cook breakfast and lunch/dinner using the same machines, but not at the same time. Stores will have to determine how to cook egg based products at the same time as hamburgers. Oh and you have to ensure raw eggs don’t come into contact with other food products. By some estimates it will cost individual stores up to $5000 to re-kit some of their kitchens to meet these new processes. Not a huge sum when you consider McDonalds corporate, but not a trivial amount at the franchise level. This will also change the business processes within the stores. Staff will be asked to mix and match breakfast and lunch/dinner items. New processes will have to be implemented and training will have to accompany those processes.
• Will this be successful? These types of strategic moves can, at times, appear simple and “no brainers” but the reality hits when the numbers are digested. McDonalds must ensure they have a keen eye on the metrics. Does this drive increased in store sales? Does it provide a lift for breakfast items? How does it measure up with other McDoanalds’ products? Are there complimentary relationships that emerge? Do Big Macs paired with hash browns become a big selling item? What is the impact on margin? I am sure that McDonalds has done some extensive testing and model building to make this move, but as with all plans, most rarely survive first contact with the consumer. McDonalds must have the systems in place to monitor and measure how this impacts the financials.

McDonalds’ breakfast all day…smells like a winner. Well at least for the consumer. Question is, like with any NPI (new product introduction), can the underlying supply chain sustain success and has the new offering addressed a need that was otherwise unmet? Only time will tell. But some valuable lessons non the less.

Hmmmm, maybe I will go get an Egg McMuffin and a 6 piece Chicken McNugget for dinner…

Be good to your customers…especially in the world of social media

There is a story about Lego responding to a client’s letter that has gone viral. The basic premise – a Lego fan builds a set, against his father’s wishes he takes the completed set out and ends up losing a mini-figure. His father suggests he writes to Lego, which he does, and Lego responds by sending him a replacement as well as extra Legos. Great story. And good marketing buzz for Lego. Not only did they make an even bigger fan of the 7 year old, but they got a tremendous buzz about their actions – outlets from Huffington Post to Yahoo! wrote about the story.

Be the ninja of good customer care

So what is the moral of the story? Take care of you customers…d’uh. Okay that is the obvious. But what this really shows is the greater importance good customer care takes with the rise of social media. Before blogs, Twitter, Facebook, Linkedin and other social outlets, the above story might have been picked up by a local newspaper reporter as filler. Good story, but buried in the business section of the Sunday edition. With social there is long tail as well as a wider reach. The originally story came out earlier this year, I just read about it and I am now blogging about it. Long tail.

Of course this sword can cut both ways. Have a bad customer care story and that could hang around your neck for much longer than it took to resolve the issue. Or if your fried chicken actually seems to be a brain or a kidney- aka what happened with KFC – click here, but be forewarned it isn’t too “appetizing” to view. Same holds true for Dell that dealt with huge headaches, both in terms of recall as well as image when one of their laptop batteries caught on fire and was videoed and spread like…ahem…wildfire on the web. This was the catalyst for Dell placing more emphasis on social listening.

These examples demonstrate the importance of being much more in tune with customer service and listening to what your customers are saying, and doing. Social media has given everyone a megaphone. Regardless of how loud or quiet that megaphone is, it is out there. End of the day customers will always vote with their wallets, but now they have another way to vote – with social media. One could argue that when it was only with a wallet, you could always expect to find another “sucker” for your products. The reality was the wallet voting is buried in the aggregate. Social media makes the vote personal and pointed. Take a cue from Lego and always treat your customer well – provide outrageous service and it will come back to you in spades. And take another cue from Dell – make social media key to your customer listening and service.

Customer service – a game changer?

I was having an interesting conversation with a friend of mine about our recent customer service experiences. And it dawned on me. Is good customer service really that important?

 

 

We have been told over and over about how good this company’s customer service is and how terrible this one was…but does it impact our buying patterns? No. At least not in certain industries. Take for example airlines. One of my recent experiences was with United. I was trying to get credit for some miles, I went online, tried their automated customer service. Nothing. Actually worse than nothing, it basically put me into a loop on their site and I could not get out! Finally I sent an email…still waiting to hear. But am I going to stop flying United? No. Why? Status and miles. I also recently called American Airlines, had a slightly better experience, but still not great. Again. Not going to leave them either for the same reasons I am stuck with United!

Same thing with Sirius satellite radio. I called them this week about a billing issue, one that I thought was fairly simple to resolve. They could not. Their customer service was less than helpful. But I am not going to cancel my service.

What about good customer service? The MacBook I am typing one was recently purchased at a local Apple store where I experience excellent customer service. But really, I wanted a Mac, if the “geniuses” that are running around the cool store in blue shirts were not as happy and nice would I go to Best Buy to get a Dell or Lenovo? No. Granted the superior customer service made my overall experience much better, but it would have changed my buying behavior.

Granted, customer service is part of a great equation. And alone it is not a differentiator or a deal breaker. While we would hope all our customer experiences are like those at Apple stores or at Tiffanys, companies do not have a real incentive to improve this area if their industry is not know for good customer service. Industries, other than retail, usually do not roll out customer service until the product or service is purchased. Therefore, you are already “captured” and you may be more tolerant of bad customer service because the switching cost might be too painful.

So before you get too excited about a company with fantastic customer service or whether or not you should invest greater capital in that department, think about what customer service really means for your business.