A single view of stock is needed to streamline the supply chain and future-proof businesses, but our latest roundtable found that achieving this may be more difficult than it appears.
With multichannel retail putting pressures on businesses like never before, there is a widespread focus on supply chain as companies ready themselves for future growth.
Delegates from Topshop owner Arcadia Group, young fashion chain Blue Inc and menswear retailer Moss Bros gathered at Charlotte Street Hotel in London for Drapers’ latest roundtable. Organised in association with returns analysis firm Clear Returns, attendees discussed the challenges faced when it comes to logistics and the supply chain.
Discussions kicked off around whether or not retailers should be offering a suite of delivery options, and how this can be managed to ensure the processes match customer expectations.
Ian Kemp-Potter, head of logistics at Arcadia, said retailers need to find a balance in the number of options they offer versus the cost to themselves: “For us, it’s about treading the fine line between offering customers the options they want and understanding that they don’t want to pay extra for them.”
Ajay Nassa, head of ecommerce at Blue Inc, agreed. He said the delivery option that has had the biggest affect for the retailer was the introduction of click-and-collect: “[It] had a phenomenal response and was an overnight success.”
However, he warned that offering this option for free next-day delivery can be very expensive. The room was unanimous that the ideal solution for click-and-collect is to offer the standard delivery option for free but charge a premium rate for next day in order to balance cost and customer satisfaction. The success of click-and-collect has resulted in Blue Inc looking at how it can extend the service - to out-of-store hours, for example.
Kemp-Potter pointed out that not only does the quantity of delivery options matter, but retailers must ensure what is offered is actually delivered: “The vital thing is to stay true to everything you offer. If you make a promise to the customer, you have to get it right.”
Liz Horne, web operations manager at Moss Bros, echoed this: “The most damaging thing is when you don’t meet that promise - people get very vocal about it. You have to remember: if a customer gets good service they tell one person, if they get bad service they tell 10.” And with the rise of social media in the last few years, this can potentially turn into thousands.
Customer expectations have also changed with regards to delivery, increasing the demand for continuous information. Nassa said: “Previously, customers were happy with just a confirmation of order. They now expect a full tracking of the item from initial order to final delivery.”
Vicky Brock, chief executive of Clear Returns, said this was something she saw first-hand when recently visiting a customer call centre: “About 75% to 80%of the calls coming in were about parcels that [at the time] weren’t yet late.”
To avoid these calls, Kemp-Potter said it is vital to keep customers up to date throughout the supply chain journey, as when you do “they are much more relaxed about it.”
While retailers often think they have ticked all of the boxes, customer perception can be quite different. Kemp-Potter cited an example of a customer who orders something on standard delivery on a Friday, but may not receive the parcel until later the following week because the weekend is in between.
“The customer won’t always think: ‘Now, what day did I order that on?’ It’s about putting yourself in the place of the customer,” he said. In order to address this, Arcadia is looking at how it can have continuous activity over a seven-day period and is toying with the idea of Sunday delivery.
Clear Returns sales manager Lynn Connelly believes keeping customers up to date is vital when something has not gone as originally planned: “Even if it is not what they want to hear, as long as the information is clear and informative it is hard for customers to argue against. They know that as a business you are being completely open with them and it builds trust in you to be that way in the future.” Recently other click-and-collect delivery methods, such as to lockers or pods, have been much talked about in the industry - but the group was not convinced these were the solution.
Horne believes they may only work in certain geographical locations: “I wonder how London-centric this option is. It’s easy to see how this can fit into the hectic lifestyle of a Londoner on their way home via the tube or major train station, but I’m not sure how relevant they are for the rest of the UK.”
Kemp-Potter said Arcadia is concentrating on exploring the collect-in-store possibilities before it starts to use third-party options.
Another hot topic in supply chains is how to reduce returns, and whether or not this should begin at the online stage with added technologies such as 360-degree imagery. Brock warned that retailers first need to focus on getting the basics right. While everyone agreed product descriptions should be detailed, she highlighted the need to also make them clear: “On a high-end site, if man-made products are described as anything other than what they actually are, the return rates will be higher. It’s about being clear and informative.”
Kemp-Potter agreed: “Even simple things like adding the height and size of the model can make a real difference.”
To streamline the entire supply chain process, a single view of stock - which includes store stock - is essential, but everyone admitted they hadn’t quite achieved this yet.
Nassa said: “We do a weekly sweep of stock in store, but it is not real time - it’s too fast to control.”
Kemp-Potter said Arcadia is undergoing a three-year plan, due to finish in 2017, which it hopes will bring it closer to a single-stock view.
It’s clear that there are a number of different factors that need to be explored to ensure businesses’ supply chains are efficient, from the point of sale on site to the delivery pick-up method.
As retailers strive to ready themselves for future growth, it is vital they achieve a single-stock view to ensure they meet customer expectations and demands.