Retailers are pushing hard to achieve a ‘frictionless’ customer experience – but in too many cases, the emphasis is on the initial interaction with the rest of the experience woefully inadequate. What is the point of embracing seamless click-through options on Pinterest or Facebook, when the delivery experience is flawed? Or investing heavily in a frictionless instore experience that leverages ‘pick and go’ technology to avoid queues, yet offering no easy way to return goods?
Too many frictionless investments are ignoring one of the fundamental truths of modern retailing: customer experience needs to be consistent across all sales channels, from instore to telesales and online. Frictionless retailing is not just about leveraging innovative technology to make it easy for customers to spend their money once: it is about ensuring the entire, end to end experience is frictionless, seamless and enjoyable to make it easy for customers to spend again and again.
Andrew Tavener, Head of Marketing at Descartes Systems UK explains why retailers leveraging virtual real-time stock and delivery capacity information to continuously optimise the delivery model are fundamentally changing the customer experience while also reducing costs and improving delivery productivity.
Flawed Fulfilment Models
Instore and online purchase experiences have undoubtedly improved in recent years, as retailers have invested in any number of innovative solutions to achieve a high quality initial customer interaction. Yet delivery horror stories are still endemic. From the parcels left in wheelie bins and emptied before discovered by the customer, to deliveries that arrive on the wrong day, with no notification, and the ’signed for’ items left on the doorstep. Nor is the option of click & collect meeting customer expectations with one in seven UK customers clicking but never collecting their deliveries from a store, due to the quality of experience. And, of course, returns – a process that is hugely expensive for retailers to offer and often inconvenient for customers.
While some retailers will admit their instore experience needs further improvement, far too many abdicate delivery responsibility because they use a third-party logistics (3PL) provider. That simply is not good enough – for today’s consumer every aspect of the experience will reflect on the retailer. A company that fails to effectively manage its delivery model, whether handled internally or via 3PLs, yet is investing in a ‘frictionless’ customer experience is essentially misunderstanding the concept of seamless, frictionless retail.
Add in endemic driver shortage and the emerging challenges of diesel vehicles being banned from city centres during daytime hours, as well as rising customer expectations regarding retailers’ environmental commitments, the entire delivery model will need to become more intelligent and effective. For frictionless retail to succeed, retailers need to take ownership of every step of the experience from the initial interaction all the way through to delivery and, if required, return.
Virtual Real-Time Model
Imposing control over customer fulfilment will require a significant mindset change in many cases, but retailers have the chance to leverage strong buying power to drive better delivery performance. What standards of delivery are important to the brand? What Service Level Agreements are required to reinforce the quality of frictionless experience customers expect? Critically, can the retailer continually track and monitor in virtual real-time to enforce the quality of delivery experience?
The importance of virtual real-time information has gained ground in recent years. Retailers increasingly recognise the value of a complete and up to date picture of the current stock position – across distribution centres, warehouses and stores – to better understand fulfilment options. But that is just part of the picture. To achieve frictionless fulfilment across all channels retailers also need to understand the stock that is in transit from suppliers, with accurate Estimated Time of Arrival. With a complete and virtual real-time picture of all stock, including expected deliveries, retailers can embrace far more intelligent fulfilment models across every channel, including instore.
Adding virtual real-time delivery capacity information and, critically, proposed route information enables retailers to completely transform the way delivery options are offered to customers. Rather than set very specific ‘same day’, ‘one day’ or ’three day’ delivery options with a sliding price model, retailers can leverage real-time capacity insight and intelligent algorithms to offer delivery options and prices that reflect actual delivery capacity available.
For example, a customer could be offered free delivery next Wednesday because the retailer is already making a delivery in that area on that day; while Thursday could be more expensive because the customer lives outside the projected route for that day. Ultimately, of course, the choice is still the customer’s but by leveraging real-time information in this way a retailer can make the process work far more efficiently, using incentives to encourage buyer behaviour that will reduce costs and emissions, while minimising delivery van downtime and improve productivity.
Continuous Optimisation Extends Experience
To achieve this continuous optimisation of the customer offer, retailers need to work with logistics providers – internal or third party – that have evolved beyond the blunt, daily batch route scheduling model. Using real-time demand data to continually refine delivery routes not only enables retailers to use pricing to influence customer behaviour to improve optimisation but also allows companies to offer far more specific delivery times, including half hour windows. In addition, by continuously assessing capacity and fulfilment requirements in advance, logistics companies can better forecast resources – a key consideration given the shortage of HGV and van drivers.
In addition, real-time route data provides essential information to keep customers up to date on the progress of the delivery. From ‘you are next on the delivery list’ to apologies for delays due to accidents, timely and relevant communication is a fundamental component of a good customer delivery experience.
Furthermore, with the ability to continuously optimise a route, even on the day of delivery, retailers can begin to effectively combine deliveries with returns collections, further enhancing the customer experience. By extending this information on inbound stock deliveries plus delivery/return options to instore staff, Store Associates can replicate this frictionless retail model, reinforcing the consistent customer experience across all channels.
A frictionless experience is without a doubt key to retaining customers in a challenging market but it is essential to consider every aspect of that interaction, from social media posts to customer delivery and return. Blanket delivery pricing options are no longer good enough – for either customers or retailers. Retailers that actively use virtual real-time stock and delivery capacity information can not only transform the customer experience but also encourage customer behaviour to support specific goals – such as reducing emissions.
Indeed, the improvement in productivity and reduction in empty miles is just the start – the future will be far more collaborative. With this level of real-time information 3PLs can start to share deliveries to improve the experience, using intelligent routing to avoid city centres, reduce inefficiencies and cut emissions. Retailers can work together, sharing click & collect services, for example, to improve the customer experience. Effective utilisation of virtual real-time data is providing retailers with the chance to re-imagine frictionless retail and truly deliver an experience that will delight the customer.