Managing the relationship between retail and logistics
Paul Doble, Director at DX, discusses a recent report by Spectrum Insight where social media is used to analyse the “winners and losers” of the festive season according to feedback on social media.
The report by Spectrum Insight served as an interesting tool, not only to measure which retailers outperformed others, but also to record the extent of brand damage sustained by those which failed to meet Customer expectations.
Deliveries is one area of the retail market that attracts a lot of attention over the festive period, with headlines full of stories of late deliveries and lost Christmas presents. Retailers which outsource their logistics have seemingly little control over the treatment of their parcels once they leave the warehouse, yet it is the retailer’s brand that bears the brunt of the damage resulting from late, lost or damaged goods. It is of utmost importance, therefore, that retailers take a lot of care when selecting their logistics partner in order to ensure that the partner is closely tailored to the retailer’s needs, and that both sides can manage this relationship effectively. Christmas is just one time of the year when supply chains are squeezed to breaking point, and can serve as a clear reminder of the potential difficulties of maintaining this two-way relationship. Adopting a best practice approach to the relationship is a year-round commitment and is key to preparing retailers for different pinch-points throughout the year.
The most crucial point that retailers need to consider when choosing a logistics partner is that of the retailer’s brand values and the level of service that their individual Customers expect – this will be different based on both the retailer’s brand and the goods that it sells. For example, if a retailer sells highly sought after technology e.g. a tablet, then naturally its Customers will expect a very high quality of service, whilst if a retailer sells second-hand DVDs then service expectations will be much lower. Expectations can be based around delivery options – for example there will be Customers that want their products delivered to an alternative delivery point, whilst there will also be Customers willing to wait three-to-five working days to receive their goods, but they would naturally expect much lower/free delivery costs. Expectations can also be based around the security of the delivery; the retailer selling technology will need to ensure that their logistics partner has necessary security measures in place – such as secure, unmarked vans, tracked delivery and proof of delivery – to give Customers peace of mind that their expensive goods are being handled appropriately, whereas the second-hand DVD retailer will not have the same concerns.
One of the key challenges when choosing a logistics partner is to know which company will perform best in times of crisis, something that can only be tested when the pressure is on. However, regular two-way communication is one of the best indicators of a positive relationship that can cope with the bumps in the road. Having a clear line of communication not only sets a precedent for fast and effective dialogue across both organisations, but it allows companies to plan for any eventuality and build an understanding of how service will change and how Customers can avoid unpleasant surprises if and when situations do arise.
Because logistics is so susceptible to outside influences such as adverse weather conditions, advanced planning between both parties is essential. Logistics planning is often considered the responsibility of the courier, but avoiding damage to the retailer’s brand will inevitably involve participation from both sides. Questions such as “how much will this delay us?” and “what steps can we take to work around the problem?” should always be tied to the questions “how can we communicate this to the end-Customer” and “have we managed the Customer’s expectations?” An email explaining weather-related road closures, along with a revised a delivery schedule which is clearly communicated to the Customer, is likely to result in a positive lasting impression, whereas parcels that simply fail to arrive without any explanation will lead to very different results which may have a negative impact on a brand’s reputation.
The quality of the relationship between retailers and their logistics partners directly influences the quality of the relationship between retailers and their Customers, and therefore has a significant bearing on the reputation of the brand itself. Understanding Customer requirements and preferences, catering to these and keeping Customers in the loop on any changes or delays to their deliveries is crucial to maintaining brand loyalty for retailers. Communicating, planning and working together with logistics partners is key for retailers wanting to safeguard their relationship with their Customers.