How to improve your delivery service through supplier collaboration

By Mark Bigley

Customer experience is defined as a customer’s perception of how a company treats them. The influence of customer experience on customer buying habits continues to grow, with research from consultancy firm Walker predicting that, by 2020, customer experience will overtake price and product as the main differentiator

There are many contributors to a customer’s overall perception of a brand, but key amongst them is the delivery process.  Any disappointment around delivery or return of goods is proven to result in customer defection – and there are stats galore detailing how much more difficult it is to attract new customers than to retain existing ones.

The challenge for ecommerce players is that the delivery arena is becoming increasingly complex and more competitive. It is difficult for these retailers – many of whom will not have in-house delivery expertise - to stay on top of this rapidly evolving fulfilment scene.  

Operational complexity

Until now, the picture has largely been shaped by the big carriers providing an end-to-end service across the supply chain – a model which requires significant investment. Size and scale enables these carriers to adopt this position. And yet, with delivery recognised as a critical differentiator, these established patterns are being challenged and disrupted.

Today’s customers are not used to being told how to behave. Rather, buyers expect choice and flexibility. They want services that can be moulded and tailored to suit their specific requirements, and if such service isn’t forthcoming, then competitive alternatives can be found at the click of a button. The power is with the customer, and the onus is on suppliers to reassess legacy processes and to identify ways of adding choice and convenience in order to meet customer expectations.

Businessman playing chess

As a result of this customer-driven climate, the delivery supply chain is undergoing a considerable transformation. There is an increasing acknowledgement of the fact that lots of businesses are highly skilled at performing niche tasks.

There are many stages to the delivery process – collection, sortation, hub distribution, depot distribution, final-mile delivery to door or convenient pick-up point. There is also an administrative audit trail that co-exists alongside this physical activity.

Clearly, attempting to excel at every stage of this cycle is a challenge-too-far for many providers. Instead, there is some potential scope for a greater focus on collaboration, where operators at each stage can work in closer collaboration with the aim of providing retailers with a holistic service that is seamless, cost-effective, and future-proof. 

Five people fist bumping each other

Thinking collaboratively

Of course, whilst in theory this collaborative approach makes total sense, it is not a model without its challenges. Perhaps the most complex challenge to overcome is not one of back-office logistics or IT integration: it is a mental challenge; an attitudinal challenge. Such collaboration demands a total change in mindset from service suppliers –  a reversal of the protective ‘us and them’ mentality towards other operators, instead requiring such businesses to be regarded as potential partners.

For long-established businesses, newer market entrants might have innovative new ideas and approaches. And for these smaller innovators, the long-established businesses might have the scale and expertise necessary to approach new markets. The point is, nobody has a monopoly on good ideas and good processes.

Certainly, such a model will increase the ability of the retailer to adapt to service innovations. New ideas around delivery and customer service are emerging all the time – ideas such as drone delivery that only a few years ago would have sounded fanciful and impossible to implement.

These innovations will not be suitable for every level of retailer. But the ability to flex service offerings quickly and without huge disruption is key if retailers are to remain competitive. We would argue that such flexibility is more easily achieved under a collaborative model.  

Thought bubble with a lightbulb

Bypass brand egos

The collaborative approach will only be of interest to retailers if the resulting interaction and reporting is made simple. The very last thing a retailer wants is the inconvenience of dealing with multiple points of contact.

This decision on who leads will differ from project to project. It may be a decision taken by the retailer in some cases, or suggested by the suppliers in others. Ultimately, success is dependent on the lead supplier managing the entire process.

There may well be an IT challenge to overcome in order to provide precisely this level of transparency and integration. Again, the complexity of this challenge will vary from solution to solution but getting it right could not only mean effortless and efficient service, it could also lead to the provision of valuable data insight.

Capturing data at every stage of the process will enable both the retailer and the suppliers to map trends around service patterns and distribution history, for example, enabling constant refinement of the offering. The retailer will be given a single-source view of all tracking – at every stage of the process from collection to final delivery – and can choose how much of this information to share with customers.  And all parties with have a clear record of adherence to compliance processes, SLAs, and much more.

Sheet of data

Tailored for success

Groups of suppliers working in tandem also offers the potential for elements of the service to be ramped up or dialled down according to business strategy. New ideas can be discussed and the most appropriate partner within the team can implement these ideas to the overall benefit of the service as a whole.

According to market research company Forrester, we are now living in ‘The Age of the Customer’, an era where customers have more control and power than ever before. There is a clear link between delivery efficiency and customer experience, and retailers are looking to find ways of meeting customer expectations without breaking the bank.

Attempting to provide a seamless end-to-end delivery model is increasingly difficult. This is leading to new thinking, a strategy of supplier collaboration aimed at presenting a service to the retailer that delivers clear benefits without adding unnecessary layers of bureaucracy.

For the retailer, a collaborative service may provide the potential for increased flexibility, for better quality at every stage, and for a clearer path to innovation and service advancement. For suppliers, pooling expertise and resources with other businesses could deliver new insights, open up new markets, and generate additional bottom-line growth.

Mark Bigley, CEO, Secured Mail

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