The fundamental role that logistics planning plays in the success of business operations has become exceptionally visible over the last several years. Rising costs, limited capacity, and growing consumer demands have increased exponentially since the onset of the COVID-19 pandemic. Effective, strategic supply chain operations are essential to growing in this complex field of logistics.
This is actually good news: The opportunity to succeed is tremendous in an industry that has traditionally relied on manual processes.
As e-commerce sales have exploded in recent years, so has the need for technology to support better service and customer experience. Resarch on the state of e-commerce platforms in 2023 finds that just 13% of retailers rank supply chain management among their top five e-commerce technology budget priorities over the next year. Even so, 39% of respondents said that the impact of their investments in supply chain technology management in 2022 relative to conversions proved “very effective” and 47% reported it was “somewhat effective.” These numbers suggest that investments are paying off and that those that don’t keep pace with industry trends—especially prioritizing the appropriate technology—will fall behind.
A Shift in Customer Experience
Whereas “customer experience” once represented a relatively narrow and self-explanatory effort, the term has come to mean more than anyone could have anticipated as technology has matured, offering countless options. Consumers have more access to goods and suppliers than ever, and delivery options have become customizable and convenient. Even brands already focused on customer experience have had to broaden their definition of that experience and evolve to meet demand.
Analysts at Retail Systems Research (RSR) explored what excellence in customer experience looks like today and found that a customer-centric approach is paramount in offering a compelling experience, core to a retailer’s success. This may seem obvious, but it’s worth noting that what worked even a year ago is not necessarily still relevant. Not long ago, industry experts insisted that personalization was the leading factor in achieving excellent experience. Though personalization is certainly an asset, RSR finds that in today’s market, relevance trumps personalization. Think about it: Would customers rather have a personalized price or a fair price? Engagement is a tried and true approach to loyalty, but if the communication (including offers, etc.) from the brand to the customer isn’t relevant, how much value does it hold?
Global events have also impacted how consumers engage with e-commerce. Accenture research found that 72% of consumers say factors outside of their control affect their needs, with 60% having re-prioritized due to world events. These factors, including the economy, social issues, and the environmental and political landscape, influence how people interact with brands and impact their interpretation of customer experience. Regardless, expectations for quality experience haven’t changed in the supply chain industry; there is still little room for errors, delays, damages, or other logistical problems that interfere with successful deliveries. But technology platforms that offer real-time information and visibility contribute to a positive outcome simply because the data is relevant in the moment.
The Impact of Technology on Supply Chain Challenges
Every part of the delivery experience is important, particularly the options accessible to consumers. But for carriers, the last mile is one of the most challenging and costly segments of the supply chain. In a talk at the Gartner Supply Chain Symposium/XPO in 2022, Gartner VP and analyst Tom Enright said, “53% of shipping costs and 41% of total supply chain costs are tied to the last mile.” These numbers account for the better part of any logistics budget.
APQC, an organization focused on benchmarking, best practices, process and performance improvement, and knowledge management, 47% of consumers want real-time status visibility during the last mile of their delivery. Part of the challenge stems from post-pandemic consumer behavior: 29% of companies surveyed said customers have less tolerance for poor visibility and delivery delays than ever before.
Enabling more efficient management processes is crucial for delivery companies, reinforcing the need for artificial intelligence (AI) powered DMS (delivery management systems). This technology supports final-mile challenges, helps optimize day-to-day operations, and reduces costs by streamlining workflows. For carriers, it eliminates the guesswork around the many variables that can delay a delivery, including traffic, weather, and frustrations like limited access due to narrow hallways or stairs, allowing them to focus on providing an exceptional customer experience rather than troubleshooting. Without high-performing technology, there’s no way to manage delivery progress and status, track ETAs, or access electronic documentation. It also proves key for providing insight into what information is relevant for customers right now.
The Future is Here
The RSR research noted that 62% of retailers agree that solid customer order management and fulfillment capabilities are “very important” to a consumer-centric operation. Technology is the primary vehicle for reducing costs, decreasing errors, and optimizing processes making supply-chain management technology tablestakes in today’s landscape. That said, business leaders must remain mindful of shifting expectations and select technology agile enough to sustain and exceed expectations, ensuring the experience is not just exceptional, but relevant for the consumer today.Doug Ladden is co-founder and CEO of Deliveright.