The Internet has ushered in a new era also for the design of customers’ shopping experiences. Today’s consumers expect to be able to buy products and services in their own individual way and also to have insight into every step of the buying process. This is particularly true for the delivery part of the order.
In order to remain competitive, companies must recognize and meet these new customer expectations. Considering customers’ needs in the design of their supply chain will make them not only customer-oriented but also more efficient. This, however, requires a commitment to innovation not only from logistics service providers but also from all other parties involved, from the manufacturer to the retailer.
What is a customer-specific supply chain?
A customer-specific supply chain starts where customers shop online, which is mostly on their smartphones. Today’s customers are informed consumers who read up on products, reviews and prices on their mobile devices before buying. 45 per cent of people in Switzerland stated that they shop on-line at least once a month (as of 2017). So today, working customer-oriented means using digital technology in all stages of the purchasing process and optimizing them for the smartphone. A supply chain that is truly customer-oriented, however, does not end when an order is placed. It includes the delivery process as an important part of a customer’s shopping experience, and a decisive factor in a company’s competitiveness.
Today’s customers want their orders delivered when they want and where they want.
Aike Festini, CEO LuckaBox
The large online players set the standards
The standards in this field are set by the major online players, above all Amazon. The world’s largest online retailer claims to be consistently customer-centric. This includes ongoing service innovations, disclosure of most of Amazon’s supply chain and a logistics service that is unrivalled in its efficiency.
Taxi service Uber has also completely changed customer expectations with its business model. Uber clients can learn about the location of available or already ordered drivers and the remaining time until the driver’s arrival on their smartphone in real time. In online retail, tracking the delivery status of a shipment on a smartphone is becoming an increasingly common standard of service – and the decisive point in a customer-centric supply chain. Here, it is not the live tracking of a shipment that is most important but rather knowing the exact time of delivery and being able to rely on it.
Three prerequisites for a customer-centric supply chain
In order to make their supply chain customer-centric, companies must fulfil three important prerequisites:
1. Know the location of deliveries at all times. This means that all delivery vehicles and all delivered shipments must be integrated into the company’s warehouse management.
2. Let the sending company track delivery drivers’ activities throughout the delivery process. This often means keeping track of rather big fleets and knowing: Which drivers are on duty? Which customers are they headed to? Is everything going to plan or might there be problems with the delivery?
3. Seamlessly integrate external logistics service providers into the management of all data and activities to ensure that the supply chain remains customer-oriented also on the “last mile”. All parties involved (manufacturers, retailers, logistics providers, customers) receive information from the cloud, allowing for maximum transparency and visibility at all stages of the entire supply chain.
The customer-centric supply chain – convenience, speed, individual service
Customer-centric supply chains enable manufacturers and retailers to meet their customers’ expectations in different shopping channels. Imagine a customer of an electronics retailer making and paying an order online, but wishing to pick it up in a store close to his home. He needs to know when the product is available there. Similarly, in a customer-oriented supply chain, customers must be able to track the status of deliveries to their home at any time. A particularly customer-oriented service is giving customers the option to communicate directly with the driver of their shipment to ask questions or give instructions for delivery.
Pressure is increasing on both brick and mortar and online retailers. They can no longer rely on prices being the main competitive factor, but must stand out from the competition by additional services like fast delivery.
Maite Mihm, COO LuckaBox
Creating an entirely customer-centric supply chain takes new ways of thinking and, yes, investments, but it has the potential to significantly strengthen a company’s position in the market, particularly because most customers are willing to pay for an extra service like this.