The domino effect of a resilient supply chain

Put simply, exceptional customer experience hinges on a robust, but more importantly resilient supply chain. Exceeding customer expectations over time is vital – happy customers lead to returning customers, which leads to more revenue, market share and competitive advantage.

Despite the connection between supply chain and customer satisfaction being frankly obvious and widely understood, its realisation is often elusive, for a myriad of reasons. Supply chains are becoming increasingly complex and fragmented, requiring end-to-end connectivity, advanced warehouse automation and broader adaptability.

Körber’s own 2022 Supply Chain Benchmarking Survey showed a divide between understanding and execution: almost every company (92%) said that a strong supply chain is critical to customer satisfaction, but only 9% of respondents ranked as leaders in end-customer experience.

Fast forward to 2023 and there is little doubt that supply chain is no longer just a requirement; it is a strategic differentiator. We know the supply chain is far from a “one-size-fits-all” industry, with seamless integration and communication standing out as critical factors to warehouse operations and beyond.

The best strategies always tie back to customer experience, and we know that customers care about receiving what they ordered within their own expectations. With speed and convenience driving online purchase decisions, the impact of delays on customer satisfaction and subsequent brand loyalty is significant.

Körber’s 2023 survey into the state of shipping and returns shined a light on the consumer’s post-purchase experience, further showing the need for a holistic approach to integrated software. The study has a representative sample of 2,200 consumers who make online purchases on a regular basis from the USA, Great Britain, Australia, Germany, Brazil, Canada, France and Mexico.

In the last six months, a staggering 70% of consumers have experienced delays. 40% of these customers were offered compensation, while one-third were given no reason for the delay and 60% took action by taking their business elsewhere. Even post-purchase, when systems don’t have to respond immediately, we found that only 45% of retailers offer a specific delivery date for when an order pickup will be ready in their confirmation messages.

The first step has to be providing that critical order information, to manage a customer’s expectations and avoid frustration. For order updates, email is key. Consumers prefer receiving order updates via email, followed by text message/SMS and as an app notification. Less than 10% of consumers would expect a phone call for an order update. In line with the preference for email, almost half of the respondents preferred to click a link in an email from the seller to check the order status. 93% of consumers want proactive shipping and delivery updates – information matters.

We are all consumers at the end of the day, and our expectations continue to expand. It is important to recognise how consumers tend to react to bad experiences, with faster deliveries, clear tracking notifications and greater choice on where an order will be delivered all clear expectations. 90% of consumers are less likely to buy from a brand again after a poor online shopping experience, showing second chances are hard to come by.

The consequences of a bad consumer experience can have a flow-on effect. 30% recommended family and friends not to purchase from a business after a bad experience, while 27% called or emailed the business to make a direct complaint. 15% left a negative review on the business’s social media pages, 14% left a nasty note on the business’ website and 20% decided never to order from the business again. These findings show just how necessary it is for organisations to build resilient and efficient supply chains – powered by technology and digitisation – to help meet these standards and retain customers to scale their businesses.

In the midst of a cost-of-living crisis, it’s no surprise that cost was the overwhelming consideration for consumers. Price accounted for 63% of respondent’s main reason for choosing a particular brand, while speed (12%), convenience (12%), choice (7%), sustainability (4%) and returns (3%) were less valued.

This report demonstrates that consumer behaviour, preferences and expectations continue to challenge manufacturers, retailers and 3PLs, which is why customer advocacy is integral to what goes inside Körber Supply Chain Solutions and its technology platforms. Lessons from consumers – such as those found in this recent survey – can help shape what points of difference customers might employ in their own operations. The ability to adapt a particular process to what really works, and provide a new level of capability can forecast challenges and opportunities during the initial stages and middle of projects.

The time to invest in a smarter, more integrated supply chain has well and truly come. Companies have turned to supply chain software to bolster critical functions like warehousing and transportation, but these systems need to be integrated, looking beyond the traditional levers of supply chain optimisation. Standardised integration platforms or integration tools are enabling supply chain information sharing to enhance agility and efficiency. The right technology can help businesses stay ahead of the curve.

Leveraging our expertise in technology, Körber builds solutions that are not only agile and resilient in the face of today’s supply chain complexities, but a force for good in the face of tomorrow’s global challenges. We will continue to face new economic and environmental crises, so it is crucial to power diverse, ethical and fair supply chains, reducing environmental footprint and ensuring safe and efficient operations for the benefit of future generations.