Joe Thull, head of North American with Radaro, describes the unique challenges faced by the three elements of the retail sector: the customer, the retailer, and logistics providers.
SCB: Let’s break down this discussion into three key parts of the retail world: the customer, retailer, and logistics provider. What are the challenges of each, starting with the customer?
Thull: I worked at Best Buy for 10 years, and we talked a lot about starting with the customer and then working backwards. Ultimately, in this last-mile delivery space, there are a lot of challenges, and customer expectations keep rising. The pressure from Amazon for most retailers is a daily threat, but at the end of the day, customers just want that live tracking experience — to know exactly when a delivery is arriving. Communication is really key. It’s a challenge for retailers and logistics companies to provide that service. I think of it as an accordion effect. We need to shrink the accordion down, and that’s really about time.
SCB: To a certain extent, does putting this information into the hands of customers replace the need for speed? Do they care more about knowing when their package is going to arrive, as opposed to getting it within a certain number of hours or days?
Thull: That's a really important point. Again, it comes down to communication. Whether something goes wrong or goes right, if they’re being talked to about it, their frustration level can go down significantly.
SCB: So what challenges does this pose for the retailer?
Thull: Retailers are in a challenging position, because they know they have to change the way they're doing business. They need to be focused on the customer, but there's a lot of things that get in the way — old policies, old procedures, old technology and processes. It's a challenge to re-invent themselves in terms of how they can deliver on that value proposition to the customer. To do that, they want more control over the end-to-end delivery process, even if it’s outsourced to a third party. They might not be doing the delivery themselves, but they want to provide a digital experience from end to end, and they want it branded with their brand.
For retailers, the toughest situation can be at the call center. The agent gets a “where’s my delivery” call and is flat-footed because they don't have the information in real time. Most businesses are working with a rear-view mirror approach to service and delivery. We have to move to a much more real-time environment, so that when something goes wrong, the retailer knows about it immediately, and can start to act on it.
SCB: Essentially, you're saying that retailers want the same thing that customers want: real-time information about what’s going on.
Thull: You're exactly right. They want visibility, because at the end of the day, it’s their customer. They don't want Facebook and Instagram posts nailing them for something they didn’t necessarily do. In throwing something over the fence to a third-party provider, they go blind in the process, and now they're experiencing the repercussions.
SCB: Let’s talk about the third leg of this three-legged stool. What are the challenges that the logistics provider faces in meeting the needs of both retailer and customer?
Thull: There are a number of pressures. One is to do more with less, which means the retailer wants better service and a more branded experience, while also taking cost out of the process. Again, one of the ways you can get there is through real-time visibility, and ultimately tightening up that accordion. It’s about data flow, and how quickly they can get information when things go right. To be able to tell the retailer, “We do something different in terms of how we take care of your customers" is a really powerful statement for a lot of logistics companies.
SCB: So how close are we to reaching this nirvana of real-time visibility and coordination among all these different parties?
Thull: The exciting thing is that it's not as far off as we might think. There are a lot of great companies out there offering solutions, and ways for retailers to change the model more quickly. In a SaaS [software-as-a-service]-based world, the heavy lifting of implementation isn’t what it used to be. To get there faster, organizations have to put down some of the things that once made them successful, and do things differently. It’s the message around being customer-centric. It's not easy, but it sure pays off in the end.
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