Amping Up the CX
Shippers and their logistics partners deploy supply chain and customer experience strategies to rock their customers' world.
Whether you sell silk scarves or steel girders, your customers expect a few basic things beyond the actual product. They want an order to show up by the promised date, which should be sooner rather than later. They want the right product to arrive, and in good condition. They might want updates on the status of the order. And they want the transaction to unfold smoothly and easily.
Check off those boxes, and you've delivered a great customer experience. Here's a look at some of the strategies that shippers and their logistics partners use to crank up the customer experience and make buying their products a pleasure.
Flex Space to Meet Demand
Early in the pandemic, as consumers went online to buy what they couldn't or wouldn't buy in stores, e-commerce retailer Chewy saw a big surge in demand.
"We quickly realized that we needed to build in some additional slack capacity for 2020," says Mike Gilbert, vice president of operations at the pet food and supply company in Dania Beach, Florida.
Chewy already had an expansion underway for 2020. In April, it launched a new fulfillment center in Salisbury, North Carolina, and it opened another in Archbald, Pennsylvania, in the fall. But in a highly unusual year, to give customers the service they expect, the company needed to do more. "We wanted to add some slack capacity for this year to make sure we could meet our commitment around customer experience," Gilbert says.
So Chewy opened a temporary distribution center in the Kansas City area, stocking it with a limited product assortment. "We picked the highest-velocity SKUs that make the most sense for the building, and put processes behind it that are simple to manage," Gilbert says.
The goal was to get things up and running quickly, with limited automation and simple training for associates. The extra capacity would help Chewy meet the demands of the year-end holiday season on top of the COVID-19-induced surge.
By putting the new facility in the middle of the country, Chewy gained a source it could draw on if fulfillment centers in other regions had trouble keeping up with orders. Also, the temporary building is close to the site in Belton, Missouri, where Chewy will open a permanent fulfillment center in 2021. When the time comes, staff from the temporary building can move to the new one.
Chewy expects to enhance customer experience even further when the Archbald fulfillment center—the company's first fully automated facility—comes online. "It will include high-speed sortation and robotics," Gilbert says. Several miles of conveyance systems will let Chewy move product from one end of the building to another with little manual involvement.
By eliminating much of the lifting and walking, Chewy expects to enhance safety, shift employees to more value-added tasks, and reduce fulfillment time.
BOPIS Done Right
For retailers, another strategy to please customers with faster fulfillment is buy online, pick up in store (BOPIS). If executed well, BOPIS can also make the purchase a smooth and convenient experience.
Companies that ship to homes face challenges now, as increased e-commerce traffic, spurred by the pandemic, strains the capacity of parcel carriers. "It is ideal when you have an opportunity to bypass that, utilizing your own fleet or full truckload to go to your facility, or even use your inventory to pick the shelves, and then have the customer come in to pick it up," says Todd Benge, vice president of parcel operations at Transportation Insight, a third-party logistics (3PL) company in Hickory, North Carolina.
Customers enjoy the speed and convenience BOPIS offers. "Many times, they can place an order online and pick it up in the store the same day," Benge says.
BOPIS is a good alternative for consumers who are discouraged by later-than-promised deliveries. This sales channel has grown more popular since the start of the pandemic, when more consumers started ordering groceries for curbside pickup. "Now they're using it in a lot of different areas, like home improvement, furniture, and sporting goods," says Robyn Meyer, partner, enterprise solutions at Transportation Insight.
To make sure the BOPIS purchase provides a good experience, a retailer needs to communicate with the customer effectively. "That means giving customers updates about when the product is picked and when it's ready at the front of the store," Benge says.
The merchant should also provide a chance to make special requests, such as help loading the purchase into a car, he adds.
The retailer needs a good inventory system, so when a customer buys an item, employees can locate it quickly, whether it's on the store floor, in a back room, at a fulfillment center, or at another store in the retail chain, Meyer says.
It's also important to adjust the compensation system, so managers don't get more credit for in-store sales than for BOPIS fulfillment. Faced with a difference in compensation, employees could be tempted to hoard items for in-store purchase.
Such hoarding can lead to split orders—when customers are told that they can pick up some of the items in an order right away but will have to wait for the rest to arrive from a different location, Meyer says. One retailer solved that problem by adjusting the credit it gave for BOPIS sales in its compensation arrangement.
"With one quick call to make all of that revenue equal, they dropped their split order percentages considerably," she says.
When businesses buy from other businesses, one element of great customer experience is reliability: Orders need to arrive when customers expect them, and in good condition. For companies that sell perishables, "good condition" depends on an unbroken cold chain.
Perishable goods, by definition, have a short shelf life. "That puts a lot of pressure on timing and dependability," says Craig Callahan, executive vice president and chief commercial officer at Werner Enterprises in Omaha, Nebraska, an asset-based 3PL that does a good deal of temperature-controlled business.
The shipper and its transportation partner need access to enough high-quality refrigerated equipment to transport the product where and when it's needed while maintaining the right temperature. Because many perishable products, such as fresh produce, are seasonal, shippers and their carriers need to scale their transportation plans up and down as volumes fluctuate.
"Produce that's consumed in the United States comes from all over—not just this country but from other countries as well," Callahan says. For example, as produce season in the United States slows down in the fall, Mexico's season goes into high gear. So shippers need their carriers to shift capacity around.
"We have to have equipment in several regions of our country, as well as regions in Mexico, to accommodate that," Callahan says.
To help shippers please their customers with prompt deliveries of market-ready produce, one tool Werner uses is a large crossdock facility in Laredo, Texas. Opened in 2019, this 20-door facility eases the transfer of trailers from Mexican power units to U.S. units. It also provides electrical outlets that drivers can use to power their refrigerated trailers while the perishable cargo clears customs. "They plug in and they're not burning fuel," Callahan says.
Tell Me What You See
For many companies that ship and receive perishables, a good experience includes the ability to monitor the condition of their loads. This is partly because of the pressure to get product to market with ample shelf life left, and partly to make sure the shipment complies with government regulations.
"They want the ability to see the product while it's en route, with constant GPS updates—not just on location, but on the temperature setting as well," Callahan says.
Werner provides that visibility while also using tracking technologies to head off equipment problems that might endanger the load. When a driver and dispatcher get an alert that a refrigerated trailer is having problems, they can arrange for a quick repair.
Drivers and dispatchers started communicating even more closely in late 2020, when Werner finished replacing onboard computers in most of its fleet with wireless tablets. Now, drivers can send and receive information, including reports on the progress and condition of their loads, whether they're in their trucks' cabs, outside the rigs, or grabbing a meal at a truck stop.
Information drivers can send from the tablets includes documentation to assure end customers that the shipment is proceeding as expected. "Drivers take pictures of seals, of temperature readings, of paperwork," Callahan says. "Those pictures can be uploaded and shared electronically almost instantaneously, allowing us to make decisions quicker."
Another 3PL, Rhenus Logistics, also uses visibility and strong communication to help shippers enhance the customer experience.
"It's critical that our customers have full visibility to their products, and we must be proactive and not reactive with their communications," says Mark Landsiedel, chief commercial officer at Rhenus in the United States. Based in Holzwickede, Germany, Rhenus has its U.S. headquarters in Miami, where its logistics facility includes a foreign trade zone.
Insight into the disposition of their products, whether in a Rhenus warehouse or on the road, helps shippers manage their operations while also pleasing their own customers. "It's essential that their end client or consumer knows exactly what's happening, and where their product or commodity is," Landsiedel says.
Rhenus' propriety IT systems, including its warehouse management system, provide that visibility, not only keeping shippers and their customers informed, but giving them the chance to make corrections when problems emerge that could delay a delivery.
"If there's a break in the supply chain, Rhenus has the ability with air, ocean, or road transportation to expedite the shipment, as well as work hand in hand with our client, and their client, to ensure they get it as close to on time as possible," Landsiedel says.
This ability to provide a plan B has been especially important during the pandemic, when shippers have sometimes seen delays due to tight transportation capacity, Landsiedel says.
As a decentralized company, Rhenus can help its customers make decisions and mitigate problems quickly. "If we need to react to a client's needs or demands, we don't have to go through multiple layers of approval," Landsiedel says.
Time to Branch Out
Bloomscape, an online store that sells potted plants and plant accessories, is banking on another kind of decentralization to enhance the customer experience.
Based in Detroit, Bloomscape currently operates a greenhouse in Grand Rapids, Michigan. Its plants start their lives with foliage producers around the United States, who grow them to Bloomscape's specifications.
"These plants are then matured in Bloomscape greenhouses," says Justin Mast, the company's founder and chief executive officer. When a customer orders a Norfolk pine, a pot of mint, or other living product, Bloomscape ships it via UPS directly from its own greenhouse.
The plants are larger and healthier than plants sold by big-box stores because they spend no time in a warehouse, where lighting, humidity, and care can be less than ideal. "We also use a proprietary, innovative packaging design to hold plants in place during the shipping process," Mast adds.
After the sale, customers can get advice about plant care by posing questions to the customer care team or using a mobile app.
Bloomscape received $15 million in new funding, some of which it will use to convert its centralized distribution model into a regional network, with an eye toward enhancing customer service.
"We're a customer-focused company, but behind the brand, we're really a plant logistics company," Mast says. "We will use this new round of financing to refine our regional fulfillment strategy with the goal of installing regional centers and systems that shorten transit times, leading to faster shipping."
Each regional facility will have its own greenhouse. "For us, it's critical that plants are held in an ideal greenhouse environment until the minute someone clicks 'buy' on the website," Mast says. "With more fulfillment centers around the United States, we expect to reduce shipping times down to two days, increase the quality life of plants, and expand the types of plants we're able to offer."