What Retailers Need to Know About Customer Experience Amid Supply Chain Strain

Whether you are a supply chain executive, channel leader or contact center manager, at the end of the day, everyone working in retail is in the customer experience business.

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The 2021 holiday season is shaping up to be similar, if not more difficult, than the 2020 retail holidays. Although an entire calendar year has come and gone, the underlying conditions that caused 2020’s “double holiday peak” are still in place this year. Supply chains continue to be taxed for a variety of reasons, confirmed by global delivery carriers forecasting that package demand will outpace their available capacity.

Here’s how retailers can prepare.

Increased customer demand and e-commerce

As parts of the world begin to approach pre-pandemic normalcy, consumer product demand and retail sales have rebounded. Fueled in part by widespread financial stimulus, retail sales are up significantly year over year, despite a down month in July, with many having strong comps over 2019. While customers are finding their way back to shopping in brick-and-mortar stores, the penetration of e-commerce sales, which reached new heights during the pandemic, has sustained a level higher than its previous 2019 growth trajectory.

The burgeoning of digital shopping requires retailers to expand and advance the way they deliver great holiday experiences and business. Why? Because e-commerce is a different operating model than brick-and-mortar. Online shopping and fulfillment are not only more expensive for retailers, but are also naturally more service-intensive (with “where is my order?” being a top inbound contact center issue). Depending on the category, online purchases are up to three times more likely to be returned than items bought in physical stores.

Supply chain...challenges

2021 is a caustic mix of COVID-19, product shortages, labor shortages, inflation and increased demand wreaking havoc on the global retail trade once again.

Consumers are aware of the strains on the supply chain -- 66% worry the disruptions will never end. Moreover, shoppers are changing their buying habits to mitigate any fulfillment issues by stocking up in case of shortages, adding another hurdle for retailers to navigate. In essence, shopper patience will only run so thin before the logistics woes creep into retailers’ customer service channels.

Delivery constraints and increased costs

Just as we saw in 2020, delivery carriers are forecasting another potential “shipageddon” scenario. Overall demand will outstrip the available capacity of the system, leaving numerous undelivered, late and potentially lost packages. So, even if products are in stock and customers can purchase the gifts they want, there’s no guarantee they’ll receive them on time for the holiday.

What does this mean for retailers?

The simple answer is the potential for many dissatisfied, if not angry, customers, and all research indicates the material impact this has on a customer choosing to shop your brand again.

Last year, over the “Cyber Five” holiday shopping weekend (Thanksgiving through Cyber Monday), many retail businesses experienced a year-over-year in inbound contact volume.

Experts are anticipating similar volumes this year driven by many of the same forces. Whether customers pick up the phone, send an email or engage via chat or messaging, retailers should anticipate an all-hands-on-deck fourth quarter for their contact centers and customer service teams. Inbound customer contacts will skew toward an amplified mix of the standard types of holiday inquiries -- where is my order, returns for late gifts (in addition to the normal post-holiday volume), cancellations and general outreach to clear up confusion about delays and shipping snafus. The reality is, all consumers now expect fast, easy and quality service.

As leveraging artificial intelligence (AI) to automate and optimize customer service in contact centers is relatively new and not widely adopted, the mix of emails, chat, voice, human-required interactions will create bottlenecks and additional costs to service customers.

How retailers can be prepared

There are several ways retailers can prepare their contact centers for the holidays. A number of these tips can also come in handy beyond the customer experience (CX) team and apply to other areas of your business.

1. Be proactive

All good customer experiences are centered around communication. Ensure you are proactively reaching your customers and informing them of anticipated supply chain crunches, or just to encourage them to start their shopping earlier than normal. If you expect holiday shipping cutoff dates will be earlier than normal and want your customers to be prepared for fulfillment alternatives and higher call volumes, make sure this messaging is available early and highly visible throughout all customer touchpoints.

2. Think outside your org structure

Customers don’t inhabit or act in silos, so neither should your organization. The reality is that, while retailers are intensely focused on digitally transforming themselves, the goal of breaking down internal barriers has not been fully realized by most. This should come naturally to supply chain executives, as you’re acutely aware of the downstream impact of issues that start off small.

Just as all customer-facing teams are focused on connecting customer touchpoints to create a smooth, consistent experience, this should also be the goal inside your organization.

The world seems to be slowly returning to normal, albeit a new normal. Nevertheless, the pandemic continues to remind us how dynamic the world actually is, making it that much harder for retailers to forecast what is to come. It’s always been true that customers should be at the heart of your decision-making and execution. It may sound trite to call out in 2021, but the reality is this is not true for many retailers with cost still being the leading factor when making choices. Whether you are a supply chain executive, channel leader or contact center manager, at the end of the day, everyone working in retail is in the customer experience business, and now more than ever, this can’t be forgotten.