December 2013 | Commentary | Checking In

Visions of Customer Service

Tags: Retail, Supply Chain Management, E-commerce, Customer Service

Keith Biondo is the publisher of Inbound Logistics magazine.

Tighter links are being forged between customer service and logistics in the retail supply chain. As competition between traditional and online shopping choices heats up, expedited transportation offerings and blended supply chain networks play a pivotal role. Simply put, delivery speed and logistics agility provide the customer service levels needed to win.

The main advantage of traditional retailers is instant shopper gratification. Compare your choices, try it on, take it home. To offset that advantage, online retailers are serving up a host of instant shipping solutions.

Google, for example, offers Google Shopping Express in certain areas by partnering with traditional retailers such as American Eagle, Toys R Us, and Office Depot. Google offers the convenience of online shopping while leveraging offline logistics infrastructure—a blended customer service solution.

To serve customers quicker, eBay launched eBay Now, offering same-day delivery in New York, Chicago, San Francisco, Dallas, and London.

Amazon has taken a slightly different shipping/shopping approach. Partnering with the U.S. Postal Service enables Amazon to leverage underutilized weekend capacity and offer Sunday delivery in the New York and Los Angeles markets. The company plans to expand the offering in 2014.

Further stoking the hope to serve customers quicker, Amazon Air plans drone delivery of packages weighing up to five pounds (which accounts for 80 percent of Amazon shipments). Ten years ago, Inbound Logistics envisioned the possibility of drone-driven deliveries. Except for the direct-to-home example, the Amazon video is oddly similar.

Jeff Bezos revealed Amazon's drone-driven delivery plan during an exclusive 60 Minutes interview, coincidentally timed between Black Friday and Cyber Monday. Beyond the inherent publicity factor in the Amazon Air plan, Bezos says Amazon's success is based purely on customer service. It's why Amazon keeps prices so low that stockholders receive light dividends, why it spends millions building DCs nearest to customer clusters, why it continuously invests in technology such as Kiva, and why it envisions drones making deliveries. Receiving orders quickly and cheaply is just what the customer wants.

Not to be outdone by Amazon, Google got press coverage a few days later in a New York Times article revealing an advanced investment in robotics. According to the "specialists" interviewed in the article, supply chain automation is an obvious target of the effort: "Perhaps someday there will be automated delivery to the doorstep, which is now dependent upon humans."

And now comes word that DHL is testing drone delivery in Germany.

What is driving all these supply chain visions? Customer service.