Creating a consumer-friendly supply chain continues to challenge retailers
Now that satisfying consumers has become so central to the success or failure of a retail organization, it's becoming increasingly important for retail supply chains to be "consumer friendly," according to the event and research company eyefortransport's "2017 State of Retail Supply Chain Report."
Most of the 218 retailers surveyed for the report consider themselves to be "consumer-centric"; 75.5 percent said that they are consumer-driven, versus 17.4 percent who said that they are product-driven. Despite that customer focus, approximately 55 percent of respondents do not formally measure customer experience when assessing their supply chain performance.
[FIGURE 1] How important is the consumer experience (CX) considered when measuring your supply chain performance?
Additionally, many respondents feel that their current logistics technologies are not very helpful when it comes to improving the customer experience. A little over 19 percent said that their existing systems are not useful at all for improving the customer experience. Another 42.6 percent said that while existing systems are somewhat useful—allowing them to measure indicators of the consumer experience, like on-time percentage or damage rates—those technologies do not help them do anything to improve performance.
Although more companies are emphasizing the consumer experience within their supply chain organizations, the report shows that in many companies the supply chain management function does not have a close working relationship with the sales and marketing departments. Only 38.7 percent of respondents said that marketing and sales play an integral role in their supply chain strategic planning, while 17.7 percent said they never coordinate their supply chain planning with those functions. The remaining respondents said they rely on quarterly strategic updates between supply chain and marketing and sales.
One area where the consumer experience is receiving more attention, according to eyefortransport, is last-mile delivery. Survey respondents rated "reducing costs and improving margin" as the most important factor in the success of their last-mile initiatives. But the second and third most important factors were, respectively, "gaining greater control over the consumer experience related to delivery" and "improving access to clear order, consumer, and carrier data for in-transit shipments across consumer service, operations, and logistics teams."
The survey's findings suggest that respondents aren't clear on how to make the supply chain more consumer-centric. That's partly because the concept of the consumer experience is still new to retail supply chains, writes report author Haley Garner, head of research and content for eyefortransport. As a result, he argues, companies that are able to "leverage supply-chain consumer-centricity effectively"—through steps such as improving inventory visibility, creating greater integration among the various sales channels, and quickly adding returns back into inventory—could reap a significant advantage.
This report was created as a supplement to eyefortransport's Dynamic Distribution Disruption Retail Summit, which will be held May 15-16 in New York City.