Customer Experience: The New Competitive Battleground

Today’s consumers are placing increasingly higher expectations on the companies they choose to do business with. With a new breed of buyer comes a new battleground: the customer experience. In this edition of Supply Chain Insights, we explore the symbiotic relationship between supply chain management and delivering a great customer experience.

Today’s consumer engages with brands through multiple digital touchpoints: social media, online shopping, apps, emails, live chat, SMS updates, online ads and more. We’re constantly connected to the places we shop.

Customers now place incredibly high expectations on the brands they choose to do business with, and they are largely putting the customer experience at the heart of their decision-making. This enhanced connectivity has led to many marketing experts declaring this period: the age of the consumer.

In the age of the consumer, customer experience is king. According to US-based customer experience and social media marketing platform Emplifi, 86% of consumers would leave a brand after as few as two poor experiences. Furthermore, 61% of consumers will pay at least 5% more if they know they will get a good customer experience. A recent survey from PwC also found that 65% of all consumers find a positive experience with a brand to be more influential than great advertising.

For Travis Erridge, Co-Founder and CEO at TMX, experience is everything. “There’s nothing worse than an order taking too long or the wrong item turning up. It kills the customer experience immediately, and getting this right is the bare minimum when it comes to delivering a good customer experience,” he says.

Yet delivering a good customer experience is becoming increasingly challenging in today’s turbulent environment, says Raghav Sibal, Managing Director in Australia & New Zealand at Manhattan Associates.

“We’re still battling major supply chain disruption, and it’s certainly making delivering a great customer experience more difficult. But it’s absolutely critical to everything, and we’re seeing more organisations place this at the centre of any decision making.”

Businesses are investing a lot of time and resources into improving their customer experience – and supply chain plays a crucial role here.

Experience is everything 

For TMX’s Travis Erridge, supply chain has always been linked to the customer experience.

“If you think about supply chains, they’ve either got an internal or external customer. The internal customer is putting stock on the shelves of a store, and the external customer is the person receiving the end product. In this process, customer experience has always been a key part.”

But the rise of e-Commerce has emphasised the importance of customer experience in supply chain operations. “Retailers now need to provide the same customer experience whatever channel their customer chooses to buy from – a marketplace, a physical shop, an online store – the experience has to be the same,” Travis says.

Royston Phua, Zebra Technologies’ APAC Supply Chain Vertical Practice Lead, says that while the rise of e-Commerce is making an impact, there’s even more at play here. “What we are looking at from the business perspective today is not just e-commerce but omnichannel fulfilment, which combines B2B and B2C fulfilment models and is very challenging to get right.”

Closing the gap between the customer experience promised and the customer experience delivered is high on the corporate agenda, which according to Royston, is exactly where it should be.

“We must recognise the fact that consumers of today have more choices. They're more discerning and more demanding. It’s not just about being able to provide an extended range of products and services – it’s also about the ability to proactively understand the customer’s preferred shopping habits, tastes, and preferences and commit to the agreed fulfilment service levels with a high level of visibility,” he says.

Furthermore, the organisations that do deliver a great customer experience are the ones who hold on to their customers. “Customer experience is always a lead indicator for repeat business,” TMX’s Travis Erridge says.

“Historically, retailers could avoid investing in online customer experience if e-commerce only made up 5% of total sales. But now we’re talking 15% upwards, it’s really important. In today’s online world, it’s too easy to lose a customer – if they don’t feel part of a community, receive a good service and a great experience, then they will find someone else that provides this,” Travis says.

A Wave of Digital Investment

Some of the largest businesses are investing record amounts of capital in their supply chains to enhance and improve the customer experience – with digitisation at the core.

Global fashion retailer H&M recently partnered with Google Cloud to enhance its customer experience and supply chain operations. The fashion retailer will collaborate with Google to develop an enterprise data backbone that includes a core data platform, data product and advanced artificial intelligence and machine learning capabilities.

Sports giant Nike also recently announced it would be overhauling its ERP in a bid for better supply chain speed and agility. Nike, like many retailers, has been facing extended lead times and delivery delays and sees this new technology system as instrumental in tackling these issues.

Described by Nike CFO Matthew Friend as the company’s “biggest investment in digital transformation”, the ERP system will be crucial to increasing inventory visibility and productivity.

Like Nike, H&M and many of the world’s largest organisations – businesses throughout the APAC region are looking to digitise their supply chain to help deliver the very best customer experience.

But according to TMX’s Travis, there is still a long way to go in this space.

“A lot of the problems we are seeing today in retail supply chain are caused by a lack of connectivity and integration across systems and processes. There is often a disconnect between store sales data, store inventory data, warehouse management systems and transport management systems.

“In the future, to get customer experience right, we'll see these systems become increasingly connected and we will also start seeing increased utilisation of big data and predictive analytics to ensure that inventory is in the right place, at the right time and at the right location to provide the ultimate customer experience,” Travis says.

According to Zebra Technologies’ Royston, buzzwords like agility and resilience have moved into the mainstream. “This is the norm now; you absolutely must be agile and resilient, and the way to do this is to invest in the digitisation of your supply chain,” he says.

As with all supply chain technology, data must be in a usable format to be meaningful. On the rise of the digital supply chain and its vital role in delivering a great customer experience, TMX’s Travis Erridge says it’s about utilising as much legacy data as possible and adding new data to it to improve it.

“With this approach, you can make quick and meaningful decisions about your supply chain in a much more accurate and speedy way than using traditional methods. The digital supply chain takes historical data and predictive analytics to allow you to look forward, whereas most data will only allow you to look backwards. By combining these two methods, you can use trend mapping to predict more accurately what will happen in the next two weeks – this is incredibly powerful when the consumer is demanding more from your brand,” he says.

Getting it Right

According to Manhattan Associates’ Raghav Sibal, organisations are now asking themselves how to build resilience and flexibility in their supply chain to improve customer experience.

“Businesses are investing in how to optimise their inventory further. They’re looking at how much to buy, where to store it, how to manage it, in order to fulfil orders more efficiently to improve the experience for the end consumer,” he says.

Reducing split shipments, cutting down delivery times and providing complete visibility and information to the consumer about order status is becoming critical. “It’s really about inventory optimisation and omni-channel retail coming together and working together – getting this right is going to be hugely powerful in driving further customer experience and satisfaction,” Raghav says.

For TMX’s Travis Erridge, order management systems are set to play an increasingly critical role in the fight to win the customer experience battle. “Order management systems that utilise big data and predictive analytics to prioritise what stock you hold where and when will have a huge impact on customer experience – we’re seeing a lot of organisations looking at upgrading and enhancing their capabilities in this space.”

Zebra Technologies’ Royston says whether an organisation is big or small, digital investment is now mandatory to survive and potentially thrive, and they must be prepared to invest. “Organisations have to understand that they need to start digitising now. You would be surprised how many businesses still use Excel spreadsheets to forecast. While investment in this space is not cheap, it has to be considered a long-term investment that will protect market share and promote customer retention,” he says.