It’s no surprise that customer satisfaction with online retail took a dive over the last year, as delivery delays and supply shortages originating from the COVID-19 pandemic were further compounded as companies rushed to replenish inventory. According to the American Customer Satisfaction Index (ACSI) Retail and Consumer Shipping Report 2020-2021, customer satisfaction in the retail sector overall dropped 2.3% to a score of 75.5 (out of 100), the industry’s lowest score since 2015. Despite retailers’ efforts to accommodate shoppers during the pandemic, such as expanding popular services like Buy Online Pick Up In Store (BOPIS) and curbside pickup, customers still remained largely unsatisfied across the board, with the ACSI reporting that 86% of retailers suffered from declines in customer satisfaction year over year.
While the pandemic may have accelerated e-commerce growth, consumer demands for a seamless omnichannel experience are here to stay. As retailers strive to satisfy customers, here are three areas that are often overlooked but heavily impact customer loyalty.
Supply Chain and Inventory Optimization Software
When looking to improve the customer experience, most companies think about point-of-purchase technology, such as their e-commerce website and contactless payment systems, but many overlook the importance of sophisticated supply chain management solutions. Not having the right product may be frustrating for customers but being told an item is in stock only to find out it’s not is even more infuriating. A seamless online checkout experience can be quickly spoiled if immediately after placing an order a customer learns that the product is no longer available, or shipping is longer than promised. There are a variety of inventory management and optimization software solutions available today to help companies ensure they have the right product in the right place at the right time to preserve customer satisfaction in the face of rising customer expectations and market uncertainty.
Companies need to deploy advanced technology, such as control tower solutions, that offer complete visibility, real-time planning, collaboration, and execution across all functions, suppliers, and partners within the supply chain. These control tower solutions provide total visibility and collaboration across the entire network and utilize artificial intelligence (AI) and machine learning (ML) to predict and resolve problems in real time. With an end-to-end view of the entire network, companies can quickly identify and correct issues to minimize risk, profit loss and service disruption while maximizing efficiency and customer satisfaction.
Creative Fulfillment Partners and Strategies
On top of dealing with higher order volumes and limited labor availability, retailers faced additional fulfillment challenges as many carriers began implementing price hikes and parcel limits during the pandemic and holiday peak season. In addition to being the most expensive and inefficient part of the shipping process, last-mile delivery is also responsible for customer dissatisfaction, with the ACSI data revealing that timeliness of delivery is now the least satisfying aspect of the customer experience.
When it comes to getting products to customers faster, retailers need to think outside of the box. Major drugstore chains like CVS, Rite Aid, and Walgreens have recently expanded their same-day delivery options by utilizing on-demand services like DoorDash, Shipt, and Instacart. Target is also testing out new fulfillment methods by utilizing dedicated sortation centers and contract workers from Shipt to fill online orders even faster. And just in time for Mother’s Day this year, Estee Lauder Companies launched a partnership with Uber Eats and Postmates to provide next-hour delivery in select cities.
Investing in Employees
While product selection, price, and delivery speed are top priorities for customers, customer service still plays a major role in driving loyalty. Sixty-three percent of US consumers will switch to a competing company after a bad customer service experience, while 78% will forgive a company for a mistake if the customer service is excellent, according to research by Microsoft and Salesforce, respectively.
Technology and processes are only as good as the people behind them. While automation can relieve workers of many tasks, it can’t fully replace humans in the workplace, especially when it comes to customer service. With today’s labor shortage, employee retention is more important than ever. While financial incentives are always great motivators, companies can also boost employee morale with non-monetary methods, such as improving internal communication processes and soliciting feedback from frontline workers.
Delivering a seamless omnichannel experience in rapid time is challenging for many companies. As consumer demands continue to grow, it is important to invest in the right people, technology, and processes to build customer loyalty and gain a competitive advantage in the new normal and beyond.
Kimberly Strausser is a Principal of Supply Chain Consulting Services at Tompkins Solutions (www.TompkinsInc.com). She can be reached at kstrausser@tompkinsinc.com.
This article originally appeared in the July/August 2021 issue of PARCEL.
