Delivery Experience Management (DEM) is the art of proactively ensuring that your customers get their orders how and when they expect, taking intelligent action to correct issues along the way and continuously communicating to uphold brand promises. Successful DEM results in happier customers, actionable insights and more efficient transportation, netting top line growth while managing costs.
Supply Chains Must Change to Thrive in the Amazon Era
Ecommerce has changed supply chain reality at mind-numbing speeds. For decades, retail supply chain professionals were concerned primarily with back-of-house operations. They made sure products were manufactured and got to transit points or retail brick-and-mortar locations on time and in full (OTIF). Customers were other companies – mostly faceless entities whose processes needed to be adhered to in order to succeed. With that focus, there was a lot of investment in the first and middle mile and less worry about ‘delighting’ the customer.
While eCommerce revenue represents about 10% of retail sales, it’s become the growth engine for many brands. That’s why today’s reality requires supply chain leaders to shift their mindset about who they serve and how. New processes, new roles and new capabilities are emerging to address the expectations that consumers have as those formerly back-of-house processes are being brought to light in customer-facing situations.
Doing things the way they’ve always been done won’t work. Applying a few tweaks to an old process isn’t enough. Reacting when a customer is dissatisfied means you are already too late. Too late to win their loyalty, too late to preserve your margins and too late to thrive in the era of Amazon.
DEM Defines How Customers Perceive your Brand
When it comes to customer perception, delivery matters. 84% of shoppers won’t return to a brand that misses their delivery. 98% of shoppers expect to be able to self serve when it comes to shipping options, delivery appointments and address changes. Transportation costs that are sunk into last mile delivery can make up 8% of annual turnover, eating into margins.
However, several years of collaboration with some of the biggest brands in retail have uncovered mountains of inefficiency embedded in most retail last mile processes — preventing brands from making every delivery amazing. The email, phone call and spreadsheet driven interactions that were used to keep track of hundreds of full-truckload deliveries from DC to store have been stretched and create intractable challenges when managing millions of deliveries to consumers. Customer care teams once responsible for addressing product concerns and trying to upsell are now being taxed with skyrocketing “where is my order?” (WISMO) calls and becoming ad hoc logistics coordinators.
With rapid growth in eCommerce, the most advanced brands in the world are transforming and trying to do Delivery Experience Management without even knowing it. DEM puts the customer at the center of the equation. DEM doesn’t leave the last mile to chance. But first, DEM requires a shift in mindset from reactive to proactive management.
There are three primary elements of Delivery Experience Management required to rise to today’s challenge:
- Visibility: Real-time access to data about last-mile deliveries is required for all stakeholders. Logistics professionals need to know what’s going on in the network. Carriers need to understand what their shippers see. Customer care representatives need to answer questions about specific orders. Consumers want to know where their merchandise is and how they can receive it with convenience. This alone is a challenge because the last mile can be complicated, data feeds are not always accurate or timely and consistent access is tough to get. DEM provides this visibility to all stakeholders in ways that are relevant to their unique use case. However, visibility alone is not enough.
- Insights: Once retailers have access to the data, they need to make sense of it. Brands that ship millions of orders must understand not just what’s happening with MY order, but what is trending with clusters of orders. How are my VIP orders doing? What location or carrier is causing the most damages or delays? Which of my orders have incorrect addresses? Which orders have stalled and are at risk of missing their promise dates? These insights provide the means to take action – on an individual order OR at scale.
- Action: DEM is unique because of this final element. All the access to data and insights does no good without the ability to quickly and easily take actions that will improve outcomes for both customers and the brand. Having a tracking page isn’t very satisfying if it just tells you that your order is late. Knowing you’ve got five couches stuck at a depot isn’t all that helpful if your team doesn’t know who to call. This is where the ‘M’ in DEM’s management really comes in. Best in class brands are using their newfound visibility and insights to make both proactive and reactive changes to orders in transit. That could be as simple as proactively messaging a specific segment of customers about a change in estimated delivery to ensure that expectations are managed. Or it could mean cancelling a single, damaged order in transit and re-shipping from a new DC before a customer is aware of the issue – saving BOTH the customer experience and costs for consignee refused storage and reshipping.
DEM Reduces the True Cost of On Time, In Full (OTIF) to Consumers’ Standards
While all that proactive engagement may sound awfully labor intensive and expensive, consider the data:
- Losing customers is expensive.
- Fielding WISMO calls is expensive.
- Shipping inefficiently is expensive.
- Storing and re-delivering shipments is expensive.
- Refunding damaged or delayed orders is expensive.
The amount of money spent after the fact trying to fix orders that have gone wrong boggles the mind. I personally have had well over 10 different eCommerce orders in the last year get refunded, replaced or even duplicated (2 for 1, anyone?) – many due to delays, damage or another last-mile related mishap.
When eCommerce was a tiny sliver of sales, these things didn’t seem to matter that much. With online orders skyrocketing, brands cannot afford to treat these issues as ‘the cost of doing business.’ To remain competitive both from a customer experience standpoint and when it comes to managing margins, retailers must get proactive and reap the rewards. It’s not unusual that, practiced at scale, DEM not only drives cost and LTV related ROI, but can also yield top-line results. It empowers your team to engage and upsell happy consumers instead of simply placating those who’ve had a bad experience.
This isn’t simply an idea. Hundreds of brands are already putting Delivery Experience Management to work to drive down cost, improve margins and most importantly retain happy customers.
Brands Use Delivery Experience Management to Drive Down Costs
By proactively handling actionable exceptions, Grove Collaborative reduced service claims by 50%, saved $65 per damage claim and $23 per incorrect address, and their NPS scores increased by 3 points for customers who experienced DEM in action. The team saved so much time and money that they took up new customer service initiatives, raising AOV by 50%.
A large home improvement brand is using collaborative exception management, aiming to reduce transit time and exceptions for big and bulky deliveries. They’ve reduced 85%+ of inbound exceptions, saving customer care countless hours and giving customers a better experience.
A digitally native furniture retailer empowers customers to schedule their own large-item delivery appointments in order to reduce transit time and missed appointments. Early on, they’ve already reduced delivery time by 3 days, and they’ve reduced their storage fees. Needless to say, their customers are happier too.
To sum it up, the three primary outcomes of adopting DEM are:
- Actionable Insights: Uncover data-driven insights that will create opportunities for systemic improvement – be it in network design or managing customer expectations.
- More Efficient Transportation: With complete visibility into your last mile network, optimizing cost to serve and OTIF rates no longer have to be competing priorities.
- Happier Customers: Offer your customers the best delivery experience possible, leading to lower complaint volume, higher NPS scores, and increased LTV.
Our team at Convey has dedicated the last several years building the tools for Delivery Experience Management, much beyond a tracking page. Hundreds of brands and hundreds of millions of consumers have benefited from the way these insights drive action for efficiency and amazing delivery experiences. We are excited to continue to innovate and build out our vision of DEM as consumer expectations evolve and in all likelihood rise. We’re proud to partner with 5 of the top 10 retailers on this journey and invite you to learn more about how we are bringing DEM to life today. Perhaps we can help your team transform your brand’s delivery experiences.