While retailers and logistics services providers of all shapes and sizes are fully immersed in all facets of the e-commerce-driven omni-channel supply chain, it goes without saying that how these supply chains run, function, and operate is clearly division by customers, in this case that would be consumers.
The 2015 JDA Consumer Survey, which was issued last week by JDA Software Group, takes a long look at how the upcoming Black Friday and Cyber Monday shopping “events,” as well as other ways retailers endeavor to meet consumer shopping needs during the holiday shopping season. The survey’s findings were based on feedback from more than 1,000 United States-based consumers.
The survey’s findings were expansive and detailed, including:
-50 percent of respondents saying they will be unforgiving of retailers providing less than satisfactory online home delivery experiences, with 1 in 3 indicating that convenience is a major factor when placing an online order;
-retailers than cannot meet expectations risk losing 33 percent of shoppers to a competitor that offers a more convenient or streamlined shopping experience, during Black Friday and Cyber Monday, as well as in purchase decisions throughout the year;
-the Buy Online Pick Up in Store (BOPIS) option was used by 1 in 4 consumers, but almost 40 percent of surveyed consumers said they experienced employee-related issues like taking a long tie time to find an item or not being able to locate it;
-past customer experiences portend future ones, with 45 percent citing late delivery-related issues over the last 12 months as the most common issue related to poor online home shopping experiences, with 48 percent of those consumers saying they would be unlikely to shop with that retailer during a peak period like Black Friday or Cyber Monday
-62 percent of consumers indicated they had frustration in having to pay for return postage and packaging, with more than 50 percent of consumers viewing the ease of returning items to retailers as very important in where they make online purchases, with about 10 percent saying it is not important
JDA Senior Vice President of Retail Wayne Unsie said in the survey that retailers’ biggest omni-channel challenge centers on finding the balance between customer satisfaction and maintaining profitability to meet customer needs, explaining that it is no longer sustainable for businesses to sacrifice profit margins to deliver customer satisfaction and meet demands. What is needed, he said, is for businesses to take a more holistic view of logistics and fulfillment strategies in order to make better informed decisions to provide a consistent omni-channel experience for customers and be profitable.
James Prewitt, JDA, vice president, retail industry strategy, said for in order for that to happen, it goes back to how large companies organize their omni-channel capabilities.
“They have pretty much developed those capabilities separate from their sourcing capabilities or in many cases have acquired those capabilities,” he said. “For a long time, they were separate and companies are now seeing the benefits of merging them. In terms of how it aids the supply chain, it involves things like marketing, pricing, promotion, purchasing, all the aspects of building a two-sided organization. Sometimes you lose something when you are trying to do that, and with the findings we saw in the survey you see the growing importance of the store in this whole equation, and that is a lost component. And that has led to failures in customer service.”
When asked about the survey’s findings for reverse logistics processes in the form of return postage and packaging, Prewitt described it as a challenge across the retail supply chain, with some challenges more prevalent for some areas than others in terms of the volume or returns coming back and the expectations for return, too.
A lot of retailers have prepared for increase return activity and expect it, but at the same time he explained reverse logistics is not the core competency of retail supply chains, as it is not the typical flow path for goods, with goods not flowing through the store and instead moving backwards through distribution centers and to suppliers.
“There is a challenge there for retailers to really think about how they optimize their reverse logistics capabilities through specialized companies that focus on reverse logistics operations for retailers,” said Prewitt. “It is understanding what your core competency is and knowing what your customers are expecting. The other piece of it is free delivery and free returns, which almost needs to be the cost of entry at some point so that capability needs to be built out. Customers are really expecting a broad range of options on that front.”
Every year, Prewitt said retailers learn from past years as to how they can make the current year a better experience for all stakeholders, given how in recent years there were what could be viewed as highly publicized failures for various reasons, including bad weather, missed deliveries and late shipments, among other things.
“That was a learning experience for retailers,” he said. “What it prompts for them is a higher level of collaboration with their delivery partners, including being more realistic for the timing of delivery windows, daily updates with partners as they head deeper into the season, and being aware of problems that can impact customers. It is a matter of this whole thing maturing, as those past challenges can’t be repeated.”
As for how things are shaping up for holiday sales in early November, Prewitt pointed to how 57 percent of survey respondents indicated that plan to take advantage of Black Friday deals this year, up 11 percent from last year, with 37 percent indicating they are loyal to the same stores annually.
What’s more, 13 percent of Black Friday shoppers will shop at stores, whereas 29 percent intend to primarily shop online.