Will Silverwood, Managing Director (UK) at iris Concise ponders the key components of a supply chain model and what retailers might consider to maximise customer satisfaction.
Father Christmas grabs a cocktail and strolls along a Barbadian beach on 4th January, while many of us head back to work. Smugly contemplating another successful Christmas in 2015, he muses, with a glint in his eye: “After 600 years, I think I’ve nailed it!”
With over 15 billion presents delivered and a 100% delivery success rate Santa has proved yet again that his supply chain model is world class.
Owning the last mile of delivery, which he personally oversees from his sleigh, isn’t the only reason Santa’s supply chain has stood the test of time. He also owns the ordering process, manages the stock (and expectation) he (with helpers) picks, wraps and packs the goods, he coordinates delivery timing to ensure that the end customer is in the right place (bed), at right time (later every year) and when things do go wrong, he has the autonomy to manage customer issues (swap / replace / bribe). Happy customers believe in him and as a result they keep coming back for more.
Santa has successfully led a much written about end-to-end organisational transformation over recent years, with Omni-chimney Delivery in 2012 followed by a Multi-channel customer experience in 2013. “It’s beyond me why so many businesses still struggle with the last mile,” Santa bragged “some of them create the most fantastic customer experiences, with great products and competitive pricing and then let the customer down with the delivery.”
This was borne out by my recent Christmas experiences. One present for my niece got lost over the eBay of Biscay arriving well into January. Another one was ‘delivered to recipient’, according to the very efficient ‘parcel track texting service’, – except it wasn’t, and still hasn’t materialised. Such a shame as in both cases the choosing and buying experiences had been faultless, just the delivery leg - the part retailers couldn’t control - that let them down. The cost to retailers of failed deliveries in 2015 is thought to have fallen since the £3/4billion reported in 2014 (IMRG 2014), thanks to more intelligent technology and increased consumer control over delivery times. However, it is the cost to a brand’s reputation that may be the real cost of disappointed customers.
With ecommerce expected to top $2.4trillion globally by 2018 (eMarketer2014), the efficiency of the ‘last mile’ is surely becoming a key battle that retailers need to win in order to ensure they keep their customers happy. While most businesses will never want to, or be able to, own the whole supply chain. It is key that they put in place processes and systems to manage and recover the customer experience when it goes wrong. Because as the bearded man has proved over the years: satisfied customers continue to believe and come back for more, and more.