Supply Chain Agility Can Fuel Delightful Customer Experiences

When a consumer thinks of retail purchasing in the current economic climate, there’s a very good chance they’re comparing their experience to Amazon.com or other titans of the industry. But how do those retailers keep their customers delighted and coming back for more? They exercise strict control over their supply chain.

The Customer Experience

Increasingly, consumers are willing to pay more for experiences. Fifty-two percent, in fact, say that they would pay more for "efficient and speedy customer service." When retailers provide that experience, it boosts brand loyalty and repeat business. Part of that customer service is having items they need in stock and available for purchase, and that comes down to the supply chain.

To understand the bottlenecks that cause poor customer experience, it's best to start from the consumer's perspective and work backwards. Consumers have become accustomed to seamless buying experiences, like one-click ordering or buy-online-and-pick-up-in-store options. They expect to get in, find what they're looking for, pay a reasonable price, and get out quickly. Retail has always been transactional, of course, but with today’s technology the transactions are more direct and faster than ever before.

While e-commerce hasn't killed off brick-and-mortar stores, customers now have a heightened expectation that what they want will be in stock and readily available at a fair price. If a store advertises a special on shirts, those shirts actually need to be available or the retailer has most likely lost a customer. In many ways, shopping at a brick-and-mortar store is about instant gratification. Waiting even a couple of days for merchandise is too long.

What can supply chains do to alleviate these pressures?

Supply Chain Excellence Drives Consumer Experiences

We’ve seen that inventory is accurate just 63 percent of the time, which often leads to disappointed customers. This type of misalignment between the supply chain (responsible for keeping merchandise stocked and correctly inventoried) and those whose duty it is to set customer expectations (e.g., marketing and sales) guarantees a lack of trust between a brand and its customers.

The problem with the average retail supply chain isn't that it lags in the technology available; the problem is the lack of agility. Companies need agile supply chains to keep abreast of factors that can negatively or positively impact their operations. Weather-related incidents are a perfect example. Everyone has seen news footage ahead of big storm predictions featuring rows and rows of empty essentials at the grocery store, from water and batteries to canned goods.

An agile and clever supply chain would divert needed essentials from an unaffected area to the storm zone. In other words, if a hurricane is about to hit Miami, one would think that people in Atlanta don't need a stockpile of bottled water and batteries. Diverting those shipments to Miami ahead of the storm creates a sense of loyalty among consumers, and you can be sure they'll remember that the retailer had what they needed, precisely when they needed it.

Supply Chain Comes to Life

The supply chain isn't some rigid, monolithic entity that only goes in one direction. Rather, it's a living, breathing ecosystem that's starting to branch out in new ways designed to improve the customer experience — and the bottom line. Different links of the supply chain are starting to watch competitors' stock levels to beat them to the punch in getting needed product to the most logical places. The days where you had "your guy" are gone. Retailers are finding that a more dynamic, agile and responsive supply chain can give them the flexibility to keep inventories up-to-date and customers satisfied.

Frank Kenney is director of market strategy for Cleo, a global leader in ecosystem integration solutions.