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?

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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.

Self help – not what it used to be

A big trend when it comes to customer service is to leverage online chats. I get this with my bank, I forget a password or have a question and I can instant message with someone. Granted they are walking through a script just like what happens when you actually speak to someone on the phone, so it take sometimes just as long. But at least you are not sitting on the phone listening to horrible 80s soft jazz.

But I had another experience with the same system, this time with one of the airlines I fly – United. United Airlines had rolled out Alex, she is an avatar that is suppose to help you with navigating through the United web site and supposedly answer questions. Recently I had a question about some miles I wanted credit for (need to get to the next status level!) I went into the web site and of course they always want your ticket number, reservation number, three pictures of the actual plane you flew and a signed note from your mom. And of course I no longer have my ticket. So I clicked on the “contact us” link on the United site hoping I could send and email or call someone that could assist me in getting my credit…but the only option seems to be our friend Alex.

So I did as she asked, and typed in my question…to which she “directed” me to the section of the web site that has all the information about asking for a credit…which I had already gone to on my very own! When I typed in a more specific question about not having my ticket information, Alex just sent me back to the same page. Ugh.

I realize companies are trying to avoid incurring costs associated with actual people in customer service, I realize companies are looking to stream line the experience. However when your solution is what appears to be chat, which we are all accustomed to, and all that chat does is send you to links that you could have navigated to on your own. That is called poor or a lack of customer service!

Airlines like Banks like the multitude of vendors that have an online presence must realize is that while they no longer rely as heavily on brick and mortar, there remains a brick and mortar element. Human assistance. I realize that United does not want to be inundated with calls. But not answering my question, whether via an avatar or an actual person, is not the way to provide customer service.

Come on United, give Alex a real voice!

The opportunity cost of customer service – the good, the bad and the ugly

I am sitting on hold with Best Buy, a retailer I tend to have good experiences with, except when it comes to customer service. I have purchased a LOT of goodies from Best Buy over the years, from flat screen televisions, laptops, DVDs, Blu Ray players, video games, consoles, phone accessories…you get the  picture. I am technology grabber and do a lot of grabbing at Best Buy. For the most part the experience has always been good. They have a lot of inventory and selection to appease my technology addiction. Their prices are competitive. However when it comes to service after the sale, there is something lacking. I have also leveraged their Geek Squad services, for the most part the experience has been adequate but by no means exceptional. A few examples, and I realize some of this might sound like belly aching…which it is, hey why do I write a blog if I cannot use it to vent from time to time!

• I brought a television, purchased from Best Buy, back after a year when the picture went dead. Of course I did not have he receipt anymore so they were “limited” with what they could do…hmmmm ever think of keeping a digital copy of receipts for your clients, especially those who are members of your reward program? After telling me they would farm out the television to determine what could be done to fix it, I was put in a bit of a black hole. No idea when I would get a response. A few weeks later I get a call from someone, not Best Buy, telling me that my television would need $500 repairs…not worth it. So I told them no thanks. Of course the television gets returned to Best Buy where I told them to dispose of it as they saw fit, what was I going to do with a dead television? I realize that some might take it to another repair center to see if someone else could solve the issue, but give the customer the option. I am sure Best Buy has an after market business, why not offer consumers an option – you do not want to service the product, do you want to take it back? If not we will dispose of it and give you a 10% off coupon if you purchase a similar product within our stores in the next 30 days. Drive some sales! Make the consume happy, and not feel harassed to come back and lug a piece of electronics that will most likely end up in a land fill somewhere. Instead Best Buy can dispose of the electronics in an appropriate manner and drive some sales.
• Another example: my car stereo went kaput. It would cost me way too much to replace it via my car dealer so I purchased a car radio via Best Buy and had their installers put it in. So far so good. Except when it was discovered that we needed another piece for the antenna…I was not getting AM radio and poor FM reception. Uh oops. I head into Best Buy and the technician is very helpful at identifying the problem and ordering the appropriate part. I am told that I will be receiving a call once the part arrives and to schedule the install. Unfortunately that puts me back into a black hole. Radio (pun intended) silence. Has the part arrived? Can I schedule my next appointment? Have I been forgotten??? Of course when I call Best Buy I get put on hold, sent to an extension that does not pick up nor has voice mail or speak to someone who clearly doesn’t do what it takes to assist. I was told – “Um oh the parts person will call you…” no call, at least no voice mail to tell me they called. So now I am stuck waiting and playing phone games. By the way, have been on hold this entire time I am writing this post! Maybe Best Buy could automate this via the web…how is that for a novel idea? I could log on, as I am rewards member, and see where my part is and even, gasp, schedule an appointment based on the technicians’ availability.

These are just two examples of where Best Buy has fallen short in my eyes with customer service and after market handling. As technology is fast moving – the cycle times of new product introduction is shrinking. So what? If the distributor of that technology can provide good after sale service I will be willing to spend more money on higher margin items: installs, training, servicing and replacements. Let us look at another technology player – Apple – and what they do.

• I purchased an iPad last September and had to go to San Francisco for an event…on the flight the iPad went dark. Ugh. What did I do? Went to the Apple store with my sick iPad, after a short wait (there were a lot of people at the Genius Bar and I was a walk in) I was met with a personable technician who looked up my information (I bought the iPad at a Best Buy…the irony). He told me that they would take care of the problem, and simple swapped out my iPad with a brand new one. Problem solved.
• I have had to replace 2 iPhones, again simple phone call, time schedule with the Genius Bar. New phone. Problem solved.

Now I realize that Apple stores’ inventory is on a very different scale than Best Buy, however the service and process does not have to be complicated simply because of inventory issues. Apple will continue to get my business, granted they also have outstanding products, but knowing that I can walk into any Apply store in the world and have my products serviced is an incredible value add. My iPhone has issues and I am in the middle of Paris? No problem I go to the Louvre Apple Store and have it fixed. The same cannot be said about the likes of Best Buy. Which is surprising, Best Buy should know how important that customer life time proposition is for any electronic distributor and vendor.That is the reason they acquired Geek Squad! They knew that services is where the money was to be made.

Fix your problem Best Buy, otherwise you might suffer the same fate as Circuit City. With the likes of WalMart and Target competing on price and Apple of service, Best Buy must defend their position and provide exceptional service.

Oh and I am still on hold with Best Buy…that is 45 minutes, 48 seconds! #fail!!!

Customer service…learn from Starbucks

Okay, this is a blatant plug for my local Starbucks, but this morning I experienced great customer service and made me think about how other companies and industries could learn from this. The situation – I ordered my coffee drink, which was served to me barely tepid, and it was suppose to be hot. I informed them of this problem and was immediately told I would get a new, hot drink. No surprise there.

What was pleasant was the other worker who was running the cash register overheard this and immediately fished into the food case to give me a complimentary pastry. Now let us put aside the fact I did not need the extra calories nor sugar, but ensuring client satisfaction was exemplary. Regardless of having to make me two drinks and give me a free pastry, Starbucks still made margin off my sale and I knew that, but the anticipation of what might become a disgruntled client is a lesson we can all learn.

Thinking back to my former life in supply chain, that is one of the promised capabilities with good supply chain planning, execution and monitoring. For example, you are a computer chip manufacturer and realize that you will have a shortfall with delivery of your product to certain consumer electronic manufacturer. If you had good front and back facing visibility you could reach out to that consumer electronic manufacturer’s end client and offer a 10% rebate on their next order…or pay for the shipping due to delay.

Not only will you make the end consumer happy – you anticipated a delay and gave them something of value – but you also make your client happy since you made their customer happy. Oh and you gain some brand recognition with a client who otherwise might not know about you.

Of course companies will need the appropriate systems in place to anticipate and act on such situations. Something to think about next time you are at Starbucks or wondering about how to generate better customer service.