The Supply Chains Crisis Is a CX Issue - Here’s What Brands and Agencies Need to Know
Between the lingering effects of Covid-19, a boom in demand, labour shortages, transport issues, climate disasters, poor harvests in some parts of the world and various localised political issues, the finely tuned, complex global supply chain has become something of a tangle.
For manufacturers it means the unexpected absence of certain raw materials, for retailers it means potential shortages and for consumers it means frustration. And that makes the whole logistical cascade very much a CX issue.
Adrian Whitehouse is VP Solutions EMEA at Media.Monks and says that failing to address the CX problems could have a significant impact on businesses. “If brands cannot make it easy and quick for customers to find, buy and receive what they sell, then that’s definitely a customer experience problem,” he says. “There is plenty of evidence to back this up: according to a recent Gartner report, 86% of professionals engaged in or leading CX expect to be competitive based on CX. Gartner also found that CX drives over two-thirds of customer loyalty, more than ‘brand’ and ‘price’ combined. Moreover, according to Forrester and Adobe, Experience-Driven businesses see over 1.5x higher YoY growth than other companies in customer retention, repeat purchase rates and customer lifetime value.”
Covid Has Changed Everything
When it comes to customer experience, our expectations are higher than ever. Throughout the pandemic, there was a push to accelerate e-commerce adoption and quite quickly the magic of tapping your screen and seeing your groceries turn up within days (or in some places, within hours) has become the norm. People are quick to adapt to new, easier experiences, but how do they feel about switching back down a few gears?
Australia is a great case study. As Melinda Lofts, head of CX strategy at M&C from M&C Saatchi Australia explains, the country has taken to different ways of shopping, and even small businesses switched to ecommerce, chatbots and invested in more sophisticated martech options. Customers were ‘generally sympathetic with brands’, understanding of the disruption and difficulty they faced early on - and NPS (Net Promoter Scores) even rose. But the infamously protracted lockdowns means that patience is in short supply and this new set of disruptions has come at the worst possible time.
“12 months later we have progressed in our covid journey to a different period of transformation. Customers' tolerance is lower and their expectations are higher than they were at the start of Covid. And businesses will find that it’s not enough to have technology simply in place - that’s now table stakes,” says Melinda, warning that businesses have to work even harder.
Unfortunately, what Covid has also changed is that panic buying on a hair-trigger has become if not normalised, certainly more common. From loo roll and pasta near the start of the pandemic to recent scenes of petrol station queues across the UK, the wrong headline can trigger a rush. Consumers may anticipate delivery and supply chain issues and understandably wish to stock up or buy early - though if headlines and panic trigger a run, this could create a whole other slew of bad experiences. Jacquelyn Baker, EVP at VMLY&R Commerce says, “The customer experience perspective is a little bit tied to panic buying. This is a trend that really started more so last year but I think it will be even more prevalent this year in order to get out in front of any supply chain challenges and therefore bad customer experience.:
Before Anything Else, Remember the Human Being at the Centre
The supply chain crisis is one of dizzying complexity. Agencies and brands can be forgiven for not knowing where to start, but experts recommend starting by going back to the central tenet of experience design, and focusing on the people using your brand or service.
“Brands and agencies should absolutely be thinking of this supply issue as a consumer experience issue, but more than that, it’s a human issue,” says Nathalie Huni, EVP/head of design, Digitas. “Nobody wants to be labelled as just a user, a consumer, or even less a persona. We are more complex, holistic and emotional beings. It’s specifically in moments of tension that the brand’s humanity needs to come across.”
That means empathy. It means understanding that the people struggling to get what they are looking for are parents planning for Christmas; they’re entrepreneurs trying to get last minute treats for an important launch; they’re tired and overworked hospital workers looking for convenience and punctuality as they receive deliveries between shifts. They don’t have the time or energy to hunt for the right contact, to sink into Kafka-esque impenetrable ‘customer service’ loops or to while away on hold.
Build Relationships and Reward Patience
For brands that ‘get’ this, there’s space to use sensitive and sensible language and CRM strategies and good CX design to strengthen relationships over the longer term. And if this supply chain issue turns out to be more than a blip, then those relationships will be incredibly important. If the drip-drip-drip of consequences from the Suez canal blockage, which was one boat blocking one supply route, is anything to go by, the fallout will be longer lasting than we might anticipate.
“There is a real opportunity to build a stronger relationship with the customer base when we can build a system that allows for one-to-one communication, says Nathalie Huni. “An email from a person responsible; a consistent contact; a number to call with an actual human instead of an impersonal call-in system;, an actual person behind a DM on social. All these details matter. If we can show more humanity in our relationships with our customers, if we can treat them like holistic human beings, not just numbers on a spreadsheet, we will have a stronger, more loyal base.”
David Yates, founding partner at Uncommon CX agrees and says that, with extensive coverage of the supply chain crisis in the media, there should be some understanding among consumers for the struggles facing brands and retailers. That understanding should be rewarded, not squandered. “The current issues have increased public understanding of (and maybe even empathy for) what it takes to put a product on a shelf or a doormat. If you can design your CX to maintain that over time – to build meaningful relationships rather than just functional expectations - then value perceptions and satisfaction levels should be higher all round because people appreciate the complexity of the challenge. This approach might even insulate brands from future disruptions.”
Transparency is a Powerful...
While some brands and retailers might fear the appearance of being low on stock, their greatest tool is transparency. From an ecommerce perspective this means accurately showing availability, clearly stating delivery windows and, if possible, building in trackers. That transparency needs to be there throughout the journey to purchase.
“As with so many aspects of great CX, the key is transparency,” says David at Uncommon CX. “Setting consumer expectations up front, and managing any changes to availability / delivery times if things change. Keeping customers in the loop is key, however long the wait – whether it’s a year for your Aston Martin, with update films on the craft of manufacture; or a few minutes for your Domino’s, with the app letting you track your Pizza.
“I came across the phrase “supply chain impatience” recently, and a good practical starting point would be to ask yourself what you can do to minimise this for your brand. At a basic level that means clear, personalised, real time communications that don’t overpromise.”
Jacquelyn Baker at VMLY&R Commerce says that while transparency might be scary, it’s likely to pay back in spades. “I think a lot of that experience, from a design solution standpoint, is probably counter intuitive to what marketing and marketers historically would would want to do from a messaging standpoint, but I think the brands that are going to be successful in the next several weeks, are the ones that double down on transparency,” she says. “I think consumer confidence will increase because they will appreciate that level of honesty and transparency and I think that they'll translate that confidence to dollars to those brands that are willing to be honest with them.”
This transparency should combine with proactive communication. Having alerts or updates that sit on your website are not enough, and don’t improve a customer’s experience if the customer never sees them.
“Once the customer has purchased the product, it’s all about clear and transparent communication,” says Melinda at M&C Saatchi Australia. “Don’t put the onus on the customer to find updates, send them emails/app notifications and SMS with clear next steps. This is where businesses often get it wrong and they just push the customer towards a third party delivery supplier. You need to create a seamless experience and take ownership of the experience - even if you don’t own it.”
… But Balancing Sincerity and Slick, Frictionless CX May Prove a Challenge
This drive to transparency may mean deviating from the dream of slick, frictionless experiences that can often be brands’ CX North Star. This seamlessness has made ecommerce appear to be something of a black box of magic for consumers - and of course it isn’t. It’s the interface to a highly complicated, layered system of manufacture and distribution. The consumer doesn’t care and shouldn’t have to, but being real and honest, ‘showing your working’ may help foster patience.
“On a more philosophical level, the answer may be to render the invisible, visible,” says David Yates. Brands have historically treated their supply chain as a means to an end - a cost to be ruthlessly minimised and swept under the rug to focus on more tangible end benefits for the consumer such as price and quality. But if you prioritise seamless, frictionless experiences above all else, then when that breaks down there can be limited reasons for consumers to stick with you
However, the question of how much to expose is the source of some debate. Geometry Ogilvy Japan’s chief strategy Officer Gareth Ellen thinks that honesty doesn’t need to cross the line to ‘TMI’.
”We are clearly managing a period of significant disruption,” he says. “And perhaps more transparency is required so consumers understand the realities of today. But with that said, I don't feel we need to expose the complexity. Brands do however need to communicate the actions they are taking to put their customers’ needs first.”
Rapid Response Data
The specific shortages can feel almost random. Just this weekend, Bloomberg reported that there is a problem with the constituent parts of the colour blue. Because, of course there is.
In order to anticipate issues and to respond quickly to those that come seemingly out of nowhere, a robust data practice is in order - looking not only externally at search data but internally at inventory levels. Combined with artificial intelligence, data can help brands with online analytics to understand buying patterns and demand; it can help identify potential issues in fulfilment and improve management.
This data needs to be acted on immediately to maximise benefit for both brand and customer, says Adrian at Media.Monks. “Demand can not only be predicted but also influenced by brands who use data to analyse behaviours and activate outbound communications based on it,” explains Adrian. This needs to be part of an overarching marketing strategy and good planning, and brands and agencies need to work together to be clear on what insights are most critical to them. This may require analysis of technology systems, particularly commerce and supply chains systems, to determine what data is available and how it can be used to provide meaningful insights for planning purposes. That said, the best brands are already making the most of the opportunities that the new technologies offer.”
Monitoring data to refine and improve CX experience ought to be standard practice, however in a situation like this we may be able to find clues about current behaviours and possible even future trends.
“Data will provide many of the clues as to how people are now behaving and the impacts felt when supply disruption is communicated to them,” says Gareth at Geometry Ogilvy Japan. “It is also important to understand why shoppers are behaving the way they do in this moment - assessing their needs differently, shopping for different consumption occasions, changing brands due to a higher degree of visibility on the digital shelf towards sustainability or 'for good' initiatives. Whatever the motivations, it will now be important to estimate which behaviors will stick post-Pandemic and support continued improvement in CX moving forward.”
Melinda at M&C Saatchi Australia agrees that big data gives brands and agencies an important set of tools, allowing them to monitor demand and inventory in real time. AI can help personalise CRM strategies. Nonetheless, that human element is still vital.
“While data is critical to businesses in formulating strategies, streamlining operations, introducing new products and services, and ensuring customer satisfaction,” says Melinda. “Data alone isn’t enough unless it’s understood and acted upon. The human element in data analysis must not be forgotten. Data needs context, interpretation and ultimately action.”
Smart Digital Spending Can Make a Shopping Experience Less Painful
Specifically, data should be monitored even more closely than usual to ensure that digital spend and content is being used effectively.
“Brands have to be very mindful right now. They have to be laser focused and hawkeyed on their media spend, especially digital and where they’re driving people and ensuring they’re optimising their spend daily and diverging that to product in stock , and ensuring they’re not driving people to product that isn’t available,” advises Jacquelyn Baker, EVP at VMLY&R Commerce.
Jacquelyn says that paid search is going to be particularly important. If brands can push similar products or suitable alternative options, they can, at the beginning of the customer journey proactively soften disappointment around products that are low or out of stock. Hunting around for a close-enough alternative is not great customer experience and brands can help ameliorate that.
“Typically the supply chain is healthy enough that you can set media for a certain cadence and let it run. But in this case because the supply chain issues are so prevalent, it’s something that brands are going to have to be myopically focused on,” says Jacquelyn. “Investing in search to ensure that if people are looking for one product that is running low on stock, suitable alternatives are presented is good practice.”
Melinda also advises considering who you are targeting - going after new customers when existing customers are facing backlogs and frustration may not be the correct course of action and even a CX fail.
“In my opinion businesses need to consider whether they even advertise when current customers already have substantial delays. Seeing an ad for a product could be seen as a red flag to a customer that is already waiting weeks for the item to arrive,” says Melinda. “A better solution could be reallocating that media spend into the current customer (surprise and delight, free shipping or product substitution) and driving advocacy (reviews) and word of mouth. It’s in these moments when things go wrong, that the rubber hits the road. You can either make a lifelong advocate or drive someone to never use you again.”
Make Sure You Review Your Retailers’ CX
Brands that sell their products through third party platforms and retailers shouldn’t think that they can simply offload their CX thinking on this issue to those retailers. For one thing, as VMLY&R Commerce’s Jacquelyn Baker says, they may find they have a lot more to lose in terms of brand perception.
“Consumers have a tendency to associate that buying experience with the brand, not the retailer,” says Jacquelyn. “So if they’re being driven to an experience on Amazon but that is then out of stock on a product, they’re going to have a very important experience that reflects poorly on the brand, and less so than the retailer themselves.”
Adrian Whitehouse recommends that brands that use any kind of third party retailers or whose goods are sold via re-sellers should review the channels, platforms and stores where their products are sold.
Adrian says that there are three key areas brands should think about. First, is considering known stock/supply levels to resellers considered against known demand through that channel. “This helps assess how likely a particular retailer is to get into fulfillment difficulties based on typical supply and demand,” advises Adrian.
Secondly, he says to actually observe the commerce journeys on those third party platforms. “Are resellers clear about stock availability and delivery timings before payment is taken, or is there a risk that an order will be taken which cannot be fulfilled? Management or renegotiation of some relationships may be necessary to manage “damage by association” to your own brand in such cases.”
Finally, Adrian says to review the remedies offered up by these retailers. “Where issues are genuinely unavoidable, how are these being managed by channel partners and resellers? This can be tested directly or discussed and planned for, particularly where brands rely on just a few ecommerce outlets.”
Photo by Tom Fisk from Pexels