LL Bean to move away from legacy of customer care king?

LL Bean, a privately owned outdoor clothing and equipment company, has always prided itself not only in well crafted products but in having extremely generous policies when it comes to exchanges. The Maine based retailer had a “no questions” asked return policy…. with no time limits. Bought a pair of their outdoor boots in 1983, you can exchange them today. This was a brilliant policy of the company. It demonstrates outrageous customer care, no worries about receipts or time constraints. It implicitly told the market that they were confident in their product. That LL Bean was confident that the design, workmanship and supply chain was robust to create products that would last. Hopefully the vast majority of customers would never need to return their items!

Unfortunately, it appears that this policy might no longer be feasible, read article here. Why? LL Bean, similar to a plethora of other retailers are undergoing a change when it comes to how they manage their business. With their business faces a number of daunting headwinds, LL Bean is trying to find ways to keep their employees happy, continue to produce quality merchandise and compete in an ever chaotic world. But for a company that was a pioneer in focusing on the customer, it would be ashamed to see them cut the very service that more retailers are starting to slowly come around to.

Is this move also an indication of a greater issue that will grow in the retail supply chain? That of returns and reverse logistics? Retailers from LL Bean to Walmart have a growing area they must focus on – what happens to product post sale. By some estimates up to 12% of retail inventory is in the returns channel at any moment, for pure play eCommerce retailers that number might be as high as 50%.[1] That represents a tremendous opportunity and challenge for retailers. They have to plan for possibly having to re-slot some of this inventory, inspect and possibly refurbish product, and then possibly having to discount the product if it comes back too late in a season. I have seen some examples of retailers not even wanting a customer to return the item, they just refund the price and tell them to keep it. Costs too much to re-slot. It is also an opportunity. Can retailers become more sophisticated with their returns channels? Actually reallocated that inventory dynamically to go to other consumers rather than back to a distribution center? Can the returns channel as a whole become a discount/outlet styled extension for the retailers? Have the inventory in the returns channel create an after market for goods. Rather than taking them back into their normal supply chain, allow the purchase of this inventory to take place in a secondary market.

This future state for retail is possible but starts with greater visibility into the overall network, a network that must extend beyond the customer purchase. But retailer networks need to catch up, otherwise we will see more retailers putting a handbrake on customer service levels like LL Bean is rumored to be contemplating. That would be unfortunate.

 

[1] According to UPS presentation at RILA 2017.

NetSuite brings full retail experience to a tablet near you

Last week was a tad crazy when it comes to conference season, there were at least 4 conferences I could have and should have attended. However until I can figure out how to be in two places at the same time I had to pick which events I could attend. One of those events was NetSuite’s SuiteWorld in San Jose. Unfortunately I was only able to attend the first full day, but what I took away from the time I spent was their new offering for retail.

They announced SuiteCommerce InStore – a next generation POS (point of sale) and retail reporting tool that bridges the online and brick & mortar experience. Click here for press release. This new offering from NetSuite, which builds on their existing solutions, follows the mantra launched from main stage. Is it an ERP or a web site? At the core of this statement is the belief that you must treat your business from a unified view. There is no longer a view of inventory that is for the eCommerce engine versus one for the traditional brick and mortar world. There is only one view – one that takes a view at ALL inventory, regardless of what channel it is destined for. What this means for retailers:

• Retailers, by providing a more complete view of customers, can now empower their stores to better satisfy customer needs. For example, if Lawrence Williams walks into a Williams- Sonoma store to purchase a new Cuisinart mixer, if equipped with this solution, the store manager and associates will have access to all the data associated with Lawrence. Did he search the web site for the mixer? What color? Which model? Did he look for other products? The store associate can now anticipate and deal with Mr. Williams’ needs more effectively.
• Much better coordination between the online and physical world. One of the most frustrating issues retailers face is have a promotion for a product in a store that could also be fulfilled online, but not having that full view of the inventory. Companies that leverage SuiteCommerce InStore, will be able to react with much more flexibility to fluctuations in demand or inventory, regardless of where the drivers are coming from. This unified view of inventory and customer is key when it comes to meeting the demands of consumers.
• A greater understanding of what is happening on the ground. Retailers have always struggled with gaining a richer sense of what is happening within their stores. POS (point of sale) data is nice, so are orders and even advanced video technology. But what if you could add a rich layer of information that tied in the online and in store experience of the consumer? Retailers will not only be able to empower their stores to better manage the customer experience, but they will also be able to collect behaviors of those customers.

It will be interesting to observe how this solution progresses. It fits into our Matrix Commerce model that looks at the places where digital has allowed the customer and the supply chain to converge. This, edge of the retail network, at the store level, is one of these intersection points. NetSuite retail customers should see this as a positive evolution of the retail solution. Over the past few months, many of the retail executives we have met with expressed the desire to provide their store locations with a complete view of the customer. NetSuite’s SuiteCommerce InStore solution addresses the needs of the retailer to gain greater channel agnostic insights.

Inventory management taken a tad too far

Please bear with me for a moment, this is more of a rant than anything else. I want to relay a story from today which is all about taking inventory management a wee bit too far. The situation is as follows. I had to put my Ez-Pass into my car and I did not have the back velcro strips that would stick to my windshield. For a while I would have to hold up my Ez Pass to go through tolls, not always practical. You might scoff and say “well how difficult is that?” Easier said than done, especially for the EzPass tolls were you do not have an actual toll booth, the ones on the highway that you can just drive 55 mph through. Try holding up the transponder and knowing exactly when to do so and make sure the system picks up your transponder. Trust me a $35 ticket will attest to how difficult that skill is…So my prior job was in New Hampshire (I live in Massachusetts and that is where I got my transponder). My office was close to an EzPass office. I decide to go to said office and get a fresh pair of velcro strips. So far nothing to crazy. So I go there one afternoon after lunch, wait in line, get to the front of the queue, speak to a polite woman who tells me she would be happy to give me replacement strips…so far so good. But then asks me about my transponder, so I begin to explain to her where it is registered to which she says “Oh, I’m sorry, we cannot give away replacement strips unless we have a transponder from this state to match the strips.”

What? Huh????? Is the New Hampshire inventory control of spare EzPass strips that controlled???

Contrast that with my visit, today, to the Massachusetts EzPass office. Walk up to counter, ask for two strips (btw I am all ready to explain that I am a Mass resident with Mass transponder…) to which the kind lady behind the counter pulls out a bucket of strips, takes two out and off I go. Morale of the story the transponder strips inventory management in New Hampshire is so finely tuned, that they have a perfect 1 to 1 replacement inventory level.

Seriously, it got me thinking, what in the world was that all about. How come in Massachusetts I walk in and there is a bucket of these $0.93 pieces of velcro but in New Hampshire I need a letter from the governor to get 2 replacements. Is New Hampshire managing their inventory budget down to the sub-$1 level? Is there really such a high demand for this sticky velcro pieces that they must be protected and signed for like a loaf of bread during the Great Depression?

While the influx of data and technology to measure and monitor inventory, assets, workers to name a few are constantly getting better it does not necessarily mean we must manage things to the $0.93 piece of inventory level. Then again that was New Hampshire…lots of things up there I call into question.