What Customer-Centric Means for Today’s Retail Supply Chains
Dispatches From RILA Retail Supply Chain Conference 2017
The customer is king (or queen). The customer is always right. The customer is at the center of everything we do.
Platitudes, to be sure. But within these tired phrases lies a fundamental truth: customers can do whatever they want. And in a world with no shortage of retail options, where the consumer is constantly bombarded with persuasive marketing and endless discounts, if a retailer can’t make a customer happy, it’s easy for that customer to take their business elsewhere. Retailers understand this. And they’re aware that once customers leave, it’s hard to win them back.
Walking the floors and attending sessions at the recent RILA Retail Supply Chain Conference in Kissimmee, Fla., one senses the industry is moving past buzz phrases like omnichannel and free shipping. That’s yesterday’s hype. We live in the age of experiences.
Now, the idea of customer experience is nothing new. Retailers have been in the business of curating stores and training associates in the art of customer service for as long as there have been stores. What’s different now – especially for those retailers who juggle geographically diverse stores and multiple brands – is a genuine concern about consistency in the customer experience. Consistency that goes beyond simply launching a new website or a mobile app that’s been painted with the right logo and colors, or adopting new technologies or services just for the sake of keeping up with the likes of Amazon and others.
“There’s no question a Dewalt drill or many other things can be bought from Amazon or even directly from the manufacturers,” Greg Sandfort, CEO of Tractor Supply told the audience at RILA. “But through the store experience, we can direct you to the right thing, the right accessories. And if you want to buy online and pick up in store, we’re closer to you.”
For the likes of Tractor Supply, Cabela’s, Gap, Neiman Marcus, and others who spoke at the event, customer experience isn’t created solely by having stores or ecommerce, telephone services or even a clever Twitter account. It comes from a clear understanding of who their customers are and what it is they’re looking for, a sense of purpose that stretches beyond what goes on the shelves, and the ability to stretch the same type of service and experience offered in stores across whatever channels they serve. And while supply chain is part of it, it isn’t everything.
“It’s not about the supply chain,” says Doug Mean, Chief Supply Chain and IT Officer at Cabela’s. “You have to make it about the customer. Every time we wanted to make change about the supply chain, it failed. We had to make it about the customer.”
Know Yourself, Know Your Customer
You don’t get very far in business (or in life) by pretending to be something you are not.
Few will argue that Cabela’s, Tractor Supply, and Neiman Marcus are totally different brands. From geography, to demographics, all the way to inventory they sell, there isn’t much overlap in what they do.
Each company presented at RILA, and while they spoke in different sessions and on different topics, one thing was clear. Whether it was an IT officer, a logistics director, or even a CEO, representatives from each of those companies were attuned to what it is that sets their brand apart. It often starts at the store.
“We still believe stores matter,” Sandfort says. “Why do we say that? If you shop our stores you will see customers helping other customers. You will see them helping each other, as well as our employees.”
What happens as more commerce happens outside of the controlled environment of stores? Customer experience shouldn’t end once an item is packed into a box.
“The reality is we all know today extending that experience from the store is important, but it’s easy to fail when you ship,” says Willis Weirich, VP of Logistics at Neiman Marcus. “When you think about that brown package sitting on your doorstep it’s hard to connect with the experience in the store.”
For an internet-native retailer like Gilt or (up until recently) Warby Parker, the box is the store. And for traditional or non-traditional retailers, the digital shopping experience is becoming more important each year. About one-third of shoppers anticipate doing more shopping on computers this year, according to the recent UPS Pulse of the Online Shopper report. About 25 percent expect to do more shopping on smartphones, while 24% will increase the time they spend shopping on a tablet. Some 11 percent see themselves visiting the store more often. But that doesn’t mean retailers should sacrifice who they are simply to get more product moved online.
“As consumers, we value consistency and reliability that we know the experience that we’re going to get,” Weirich says.
Customers don’t go to Neiman Marcus looking for a fly rod any more than they visit Cabela’s expecting to find a Tom Ford suit. But as Doug Means notes, his customers stick to Cabela’s because the supply chain understands what they want, when they want it, and the company is able to deliver a level of product expertise few other brands can deliver.
“For supply chain people, it’s really, really important that we speak ‘customer,’” Means says. “What it really comes down to is, are we doing the things that make our customers happy…. We as supply chain people play a huge role in that.”
Know the Journey
If the supply chain is a means to an end, the end is not a retailer’s stores. It’s the customer.
And as several executive speakers at RILA noted, you can’t win investment and executive sponsorship of a major supply chain transformation without making the case for how it will impact the customer and, ultimately, the bottom line.
To that end, Praveen Kishorepuria, a Managing Director at Kurt Salmon says there are six keys to success inherent in any supply chain transformation:
- They are led from the C-suite
- There is buy-in at all levels
- Companies bring in the right mix of talent
- The process allows for collaboration across all functions
- Partnerships are extensive
- They include sustainable and measurable business practices
And, importantly, as more of the business extends beyond the store, retailers can’t forget who they serve.
“Build loyalty, build a relationship with the customers,” says Tractor Supply’s Sandfort. “We believe over time it will give you a differentiator.”