Supply Chain and the Customer Experience

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Customer Engagement
Customer Experience
During a session that discussed findings from the NRF study "Retail Horizons: Benchmarks and Forecasts," executives from PetSmart and Urban Outfitters shared their thoughts on how SCM and customer experience are linked.

One of the (many) things that drives me crazy as a customer is to see an ad for a product, especially something new, and then to go to the store only to be told that it's not yet in stock. I don't know whose idea it is to generate buzz before a product is available--implying that it is available (much different than building buzz for an upcoming release date)--but let me just say to those folks: It's really disappointing and creates a hugely negative customer experience.

I imagine that in some cases the reason for the delay has to do with supply chain management (SCM), not something I often think about as a key aspect of the customer experience. But, as it turns out, it's much more vital to customer experience than some folks give it credit for. In fact, earlier this week at National Retail Federation's annual convention, Retail's Big Show, two major retailers cited SCM as integral to delivering on customer expectations--each for different reasons.
During a session that discussed a few of the findings from the NRF study "Retail Horizons: Benchmarks and Forecasts," executives from PetSmart and Urban Outfitters shared their thoughts on how SCM and customer experience are linked.

Moderating the discussion was Karen Lowe, general manager, global retail industry, for IBM. Lowe noted that, according to the survey, customer satisfaction and retention is a top strategic priority for 69 percent of retailers. She then asked Chip Molloy, senior vice president and CFO of PetSmart, and Freeman Zausner, chief administrative officer of Urban Outfitters how retailers can keep customer satisfaction high and stay competitive considering current economic conditions. Both Molloy and Zausner agreed that although companies may need to consider cost-cutting measures, they shouldn't do so at the expense of the customer experience.

"We don't want to impact the customer in a negative way," Molloy said, adding that the question PetSmart executives ask is, "How can we enhance service while cutting costs?"

In PetSmart's case, one answer to that question is to improve the supply chain so that the products customers are looking for are always in stock. Molloy also discussed how recent improvements to PetSmart's supply chain processes are allowing the company to get hot new products into its stores faster than ever before--within two weeks in some cases.

"The heart of our business is the customer experience," Zausner added. "We're obsessive about customers." This means enhancing their experience even while making cost and operational improvements, like speed to market. According to Zausner, Urban Outfitter's fashion-conscious consumers are always looking for the latest styles and the retailer wants to ensure that it can quickly get in new stock that will keep shoppers coming back.

"Supply chain initiatives make sense," Zausner said. "It's important to speed to market, and directly affects our ability to get new fashions to our customers faster."

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