Supply Chain keys to building retail relationships with consumers

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By Published On: October 13, 20220 Comments

Retailers being willing to monitor and troubleshoot their supply chain while offering transparency to consumers could be the difference between developing relationships with consumers and losing them entirely, as stock levels and shipping concerns have grown in importance to consumers in recent months.

As many retailers continue to struggle with supply chain issues still being felt as a result of the challenges of the COVID pandemic, consumers have changed their behaviour and seen their loyalties increasingly shift in response, as frustrations with retail stock levels and issues with shipping and delivery have grown.

“Consumer demands are changing and loyalty is not as strong as it used to be,” says Paul Soong, Regional Director for supply chain software provider e2open, “Customer experience has become a high consideration. For many consumer-facing companies, their unpredictable and inaccurate stock levels as well as lack of clear customer communication is causing people to lose trust in their go-to brands and opt for places that simply have their products in stock.”

The trend now is towards products from multiple brands and businesses who deliver a more transparent and streamlined service, despite additional fees.”

That transparency is particularly vital, Soong further suggests, as it plays a key role in contributing to retailers’ abilities to develop relationships with consumers that see them continue to return and spend. At least one way to ensure this transparency, Soong adds, is a focus on communication.

“Developing a stronger personalised relationship with your customers through real-time communication is key to maintaining loyalty,” Soong tells Power Retail, “Retailers are strengthening this relationship through constant contact and the request for feedback on the complete experience after the event to stay front of mind.”

The influence of supply chain factors and transparency around the process on consumer’s choices in retailer is made particularly clear in the recent National Retail Association Consumer Sentiment Report, finding when surveying consumers about the factors that contribute to their choice of retailer that 67 percent report free delivery as a leading factor and 47 percent cite free returns. Delivery speed is also a factor, as 23 percent consider same day shipping a leading factor alongside 20 percent prioritising next day shipping as a factor of leading interest.

Interest in expedited shipping options such as these are particularly important to younger consumers, Soong identifies.

“Younger generations, particularly millennials, are willing to pay a premium for expedited same-day or immediate delivery,” says Soong, “Even though there are additional fees and costs to execute these services, you build a stronger relationship with your customer that can result in stronger retention.”

More broadly, Soong continues to outline, supply chain disruptions felt acutely as a result of the pandemic have led to supply chain factors having an increased importance overall to consumers when considering making purchases. And while quick fixes to the issues faced by the supply chain might not be possible, seeking to implement strategies around building a relationship with consumers ahead of unforeseen supply chain issues is at least one solution to potentially mitigate damage caused by future disruptions to the supply chain.

“The topic of supply chains has quickly moved from a boardroom discussion to now something that’s discussed around the kitchen table. With the consumers now intimately aware of how fragile our supply chains can be, retailers need to ensure they are developing strategies to resolve supply chain issues to maintain customer loyalty,” Soong says, “Currently consumers have a high level of frustration due to the timeliness of information, [such as] delays between the acknowledgement of order and the processing of orders, and [then] lastly the execution of the shipping process.”

“In most instances the order acknowledgement is instantaneous, with the processing of the order within 8-9 hours. However, the shipping component acknowledgement can take days or even weeks, with a worse case of the order being cancelled, leading to a negative experience overall.”

And ultimately the importance of adding value to consumer experience, both before and after purchase, is particularly critical during periods of economic uncertainty such as that being experienced by consumers and retailers now.

“Consumer spending during Inflationary periods places greater emphasis on value,” says Soong, “Consumers will align their purchasing with known [and] trusted brands with solid delivery experiences.”

Leaning on transparency, communication and ease of process offered by advancements in supply chain technologies are some of the ways Soong suggests retailers can look to make forward progress on mitigating supply chain issues and, in turn, put their best foot forward in developing relationships with consumers.

“Real-time data is important for an organisation to be successful in today’s ever evolving supply chain. The theme of today’s supply chain is better, faster, smarter, cheaper and the consumer is in the driver seat,” says Soong, “Organisations need to know where their goods are coming from and going to and achieve visibility across their supply.”

“Increased data visibility will also help brands to make informed decisions and deliver optimal results for their end consumers and their bottom line. Using smart tools, AI and machine learning to help you predict demand increases in the market can help businesses understand and ask, ‘What do I need to do in my business right now to be able to handle demand in three weeks?’”

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