December 2014 | Commentary | Checking In

Service With A Demand-driven Smile

Tags: Retail, E-commerce, Customer Service

Felecia Stratton is the editor of Inbound Logistics magazine.

What does it mean for retailers to deliver exceptional customer service? Is it matching expectations? Cost-competitive pricing? Dependability? Options? Most consumers expect "all of the above" and then some from their retailers and e-tailers.

Demand expectations are also hyper-sensitized because consumers are faced with infinite choices. SKU proliferation extends beyond the store shelf. However demand skews, retailers are intent to deliver. In a brave new omni-channel world, direct-to-home fulfillment can come from virtually anywhere—an e-commerce DC, the manufacturer, even a brick-and-mortar store.

That's why consumers are opportunists—proactive and passive as they click and collect their way to getting what they want with the speed and service they're willing to pay for. That's demand-driven logistics at its core. Retailers and service providers have to react in kind to meet those expectations. Those that do it well can use customer service as a competitive differentiator. But it's not always easy. And creating high expectations also increases risk.

Consider what happened during the 2013 holiday season, when customer service expectations went awry. Amazon was chief among a number of large-name brands that fell victim to the 2013 holiday humbug. UPS and FedEx accepted culpability. But that was little solace to customers who chose Amazon because of its guaranteed delivery cut-offs.

Think Amazon cares? You bet it does.

A recent Pitney Bowes survey reports that nearly half of surveyed U.S. consumers planned to buy gifts online earlier this year. Beyond that, 33 percent of respondents say they will pay more attention to shipping in 2014 compared to last year. Amazon has always had a captive market among procrastinators. But will 2013's lasting impression hurt last-minute sales?

If Amazon is vulnerable to epic customer service failures, then those kinds of events can happen to any company, regardless of size and technological acumen.

Last year's holiday parable—and this year's response—demonstrates how consumers and retailers are increasingly sensitive to service exceptions. As e-commerce and omni-channel raise expectations, and consumers become more impatient, there's pressure on supply chain practitioners to perform.

This pressure places a greater premium on technology for sure, as you'll read in Customer Service: It's the Thought that Counts (page 32). But it also demands that value chain partners pull in the same direction to increase visibility and demand responsiveness.