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There are a lot of technologies, trends, and customer expectations in the world of e-commerce today. Today we’re going to talk about what brands need to do to stand out in an e-commerce world. To help me discuss this topic, I’d like to welcome Laura Ritchey, EVP and COO of Radial.
[Greg Kihlstrom] We’re gonna touch on a few different aspects, at least, of eCommerce. Let’s start by talking about customer care and the customer experience. So customer experience throughout the buying journey is met with rising customer expectations and continually increased competitive pressure. So, focusing on the customer, what are brands that do eCommerce well doing that others may not be?
[Laura Ritchey] I think it starts with setting the customer expectations and then delivering on those expectations. So if you say that you’re going to deliver in four days, then deliver in four days. If you promise to have inventory in stock, or the customer sees that inventory is in stock, then make sure that you have it available for them to purchase. So a lot of it is about this kind of relationship that you set with the customer when they’re browsing on your website and placing that order about what’s going to come after they place that order.
Yeah, so omnichannel customer experience is getting more and more important, as customers are channel-switching and expect brands to keep up. I know I saw statistics recently that, like, 15 years ago or so, a customer used on average maybe two channels, maybe two or three, while they were shopping; now they’re using at least five or six out of many more potentials. So what can that type of channel-switching and that omnichannel, and the need for omnichannel customer experience, what kind of strains can that often put on brands to deliver, and how can a platform like Radial help there?
Well, what we saw with the pandemic is an example of the strains that you see, right? So we went from being open for business to having the store channel close and all of the inventory in those stores become difficult to access and basically impossible to sell. And at the same time you saw a shift to the e-commerce channel who had been allocated enough inventory to basically support what was expected sales in those channels. So that’s really probably the most dramatic thing that we’ve seen when it comes to switching. Because, if the inventory is not accessible to satisfy that customer order, you’re ultimately not going to get that sale. So one of the things that we think about with our clients is what is the best way to have your inventory available? A platform like Radial can use several warehouses that could be located on the different coasts, or up in Canada, depending on what your needs are. And those warehouses can actually send the products that are needed to the store, to the store to be picked up from an online order, to the customer’s home, to another warehouse, to spread the inventory out. So really keeping that agility to move the products where they need to be to meet that customer demand and therefore that delivery expectation is the most important thing that you can do to manage through that variability and unknown about where the order is going to want to be picked up eventually.
Yeah, so it’s definitely been tough going lately for eCommerce companies. You mentioned some of the supply and inventory issues. There’s economic uncertainty, labor shifts, labor shortages. In addition to what you just touched on, how can technology solutions help eCommerce brands amidst some of these types of challenges?
Yeah, I think first and foremost it’s about how we think about where we put the products. So when I started in retail, you sort of used your last three years of information and, based on that, you pushed the inventory out to the store or put it in the eCommerce warehouse, where it was available to maybe be sold for wholesale or for eCommerce orders. Today we have much better tools. Everyone’s talking about generative AI and predictive modeling that enable us to more closely track the selling trends and allow product to be pulled to the location that would be nearest to the expected customer demand and to more quickly pivot than we did in the past. So I think that is helping a lot. There’s also been continuing advances in visibility technology to the customer. So if you think about your own customer purchasing experience, you might get an email that your order was received. You might get an email that someone’s working on it. You might get an email that there’s a delay that has happened for some unexpected reason. You know when it’s left the warehouse. You know when it’s making its way to your home. And so technology has also provided a level of visibility that customers really never had before, which in turn really puts pressure on the brands to make sure that they meet those expectations.
Yeah, definitely, and so to follow on to that, when it comes to the customer experience, you mentioned some of the communication and some of the advances that technology have allowed. What do you think that brands, maybe even some of the more savvy ones, are still not paying enough attention to when it comes to customer experience?
Yeah, I think this won’t be a surprise when I say it returns. So when I think about all the advances that we’ve done, from what we call click-to-porch, when you place the order until it gets to your house, we do not see on return. So you might have a return experience now where you take the product back to USPS, for example; they may give you a receipt, but you may not know where it is until it gets back to the retailer, and you may not actually receive a credit for the cost of that product until the retailer is able to process it in their warehouse. So if you contrast that to what Amazon’s been doing, right, they’re providing access points where you can drop products off; as soon as it’s verified that it’s been received, you receive a credit for that merchandise and you can resend. So I do think that we will see some of those same things that we see in the front end of the order be adopted in the return space.
I think something that’s also interesting is you’re also seeing retailers prompt people to take eCommerce returns to stores. So I recently made a purchase and I went to look on the packing slip because I was thinking about returning an item, and it said “Please take it to the store. We’ll get a different size if you need it. We’ll find an alternative product if you don’t love it.” And, you know, it prompted me to go to the store locator. And the language about actually packaging it up and mailing it back was quite small, and so they were encouraging you to go to the store, which we know, for a branded retailer, is the best way to get incremental buying, is to get that person back into the store. So it’s interesting how thinking about returns is shifting.
So let’s keep talking a bit about technology, and this wouldn’t be a podcast in 2023 if we didn’t talk about AI to some degree. So I’m not going to ask about ChatGPT at the moment, but let’s talk about autonomous technologies and how they can benefit eCommerce. What are some of the biggest opportunities that you see to leverage some autonomous technologies in eCommerce today?
Yes, I’ll talk about robots in a minute because that’s everyone’s favorite thing to talk about. But something that’s really interesting for us, too, is the same way that I talked about retailers can use predictive modeling and generative AI to think about their demand patterns, we can also use that in the warehouse to make sure that we understand the volumes that we’re going to receive and we can match our labor. So it’s a win-win for our employees because they know that they are going to have work to do, and we can make sure we have the right number of people to enable that demand. And then, obviously, we’re rolling out now various robotic technologies. Some of those simply reduce the walk time, which is one of the big complaints that we hear from warehouse workers. If you have a million-square-foot building or 750,000-square-foot building, that’s an awful lot of walking to do in a day. All the way up to, you know, the towers of robots where you will get to stand stationary at your station and you’re able to do much of your pick/pack that you used to have to walk around the building to do.
So it’s pretty interesting to see how that continues to evolve. I do think that there are some natural limits. So obviously people have talked about these fully automated warehouses and what will that mean for the future? For our business, we have customers that have a much higher holiday peak or a higher sale peak. So sometimes their sales can be 20 times what they would sell on a normal day. It’s going to be difficult to design a robotic solution that’s cost-effective. So we find that marrying our skilled employees with a robotic solution is actually the most effective way to run the business.
That’s interesting. So where do you see autonomous technologies, predictive, all of this stuff in eCommerce, heading maybe in the near future? What’s coming down the road?
I think it’s really removing repetitive tasks. So if we look at the robotics or autonomous technologies that are getting introduced in warehouses right now, it’s to unload trucks, right? So not very glamorous to pull a bunch of cardboard boxes off of a truck or pallets off of a truck. It is to do putting, which is what we call when we take a batch of orders and we separate them into individual orders, and it’s a very monotonous turning and putting product into individual cubbies to break them into those orders.
So that’s where we kind of see, is continuing to eliminate the repetitive tasks so that what we’re leaving for our employees is really those tasks that require strategy thinking, optimization and improvement around performance. I think, with the generative AI, I do think it’s going to help us in training and onboarding. You know, we have a very multilingual, diverse workforce, and so the ability now to present work instructions and provide training in many languages that even pick up the nuance of dialects is really exciting. And that’s going to mean that we can get our employees to productive performance in partnership with them a lot quicker than we are today. So I’m really excited about that element.
And to your first point, I mean, I think that’s really in line with at least what I think the promise of AI and automation is, really letting people do what people do best and machines and AI do what they do best, so that’s that’s great. And it’s augmentation; it’s not replacement of humans, right? So it’s certainly replacement of some of their work, but it’s the kind of work that’s repetitive and not necessarily rewarding, either.
So last topic I wanted to talk about is brand positioning and eCommerce. So while great products are critical to eCommerce, there’s more to it than that, and with many customers saying that the experience they have while buying a product or service is as or more important than the product itself, which is kind of sobering news to see, and I saw that statistic the other day. So, you know, in this crowded marketplace, with high customer expectations and increasing competitive pressure, what are some of the key components that a brand needs to have to position itself uniquely in the eCommerce space?
Well, one of the things that we saw during the pandemic was that many brands moved their eCommerce customer experience to be closer to what you were experiencing in the store. So, for example, if you went to a store and you were buying a high-end cosmetic, as an example, they take it; they put it in the nice box, and then they wrap tissue around it; they put a sticker on it, and they put it in a bag. You know, they pull up the strings. And they walk around the counter and they hand it to you – obviously not entirely replicatable in the eCommerce experience, but we have seen that that is now the ask. So instead of maybe that nice box going into a cardboard box and coming to your house with the label on it, we’re seeing that that box gets wrapped in tissue and maybe is put in another box and comes to your house with the same sticker so that, when you open it and you see these YouTube videos or or things online on social media all the time of this unboxing experience, that you’re having that same type of brand experience, going so far as fragranced tissue paper, specific notes. So, actually, some of our packers do handwritten notes saying, “Packed by Laura,” you know, “with love,” or whatever the sentiment is. So I think that, really, it’s thinking about what is important about the customer experience to your customer, and then how do you replicate that wherever they shop? So even if they were to buy your product at a wholesaler, so another retailer, then how is that retailer ensuring that you have a consistent experience, which really drives brand loyalty and lifetime customer value, right, because I know what I’m going to get and I like it, and I keep going back to have that same experience. So I think it’s really understanding what your brand positioning is. I think the thing to think about with that, though, is there is a large push around sustainability and how we think about the climate in the long term. So we have to make sure that we’re doing it in a way that is also respectful of our commitments that we’ve made around sustainability.
Yeah, I mean, I remember, back in the day, opening an Apple product, a laptop, or whatever the case may be. You know, it was always kind of an experience. And now, to what you’re saying, I’m seeing that a lot more, so creating that great experience, it’s interesting how that can translate to an eCommerce space. But how are you seeing brands kind of take that balance between maybe extravagant packing and all that and, to what you just said, the sustainable aspect? Where do you see that headed?
So I think the technology continues to advance that is going to enable us to manage how we’re doing that. So as an example, you can now print a QR code on a box that can be unique to that customer and contain information specific to those products. So continuing with my cosmetics example, if you’ve bought a face cream or a lipstick, it will be able to tell you what the ingredients are and how you can use them, you know, relying less on having all of the information potentially in the product box itself, as well as anything about returns, so for companies that are still using paper pack slips that are included, you could put the QR code in that. And then a lot of customers, clients, used to have inserts, right, where you would open it up and you would have a couple postcards that would give you either other offers or recommend similar products. That will all be able to be accessed by QR codes in the future, removing all of that ancillary. So then you’ll really be able to focus on that brand experience, and then, as you flip up the lid or wherever that decides to be placed, you can just use your phone and get all that information that used to be stuff that, to be honest, many people scoop into the trash if it’s not needed. You’ll actually get more eyes on it, right, because once I scan on my phone, it’s going to all pop up and I’ll probably page through it rather than, kind of, how I used to maybe push some of that into the trash.
Well, and also, there’s lots of benefits there to the brand because they actually know who is looking at it and when and all of that as well, particularly when brands are having a hard time with third-party data and they need to collect more first-party data from their customers, anyway. So I think that’s a win-win-win, I guess, for customers, brands and the environment. So yeah, that’s interesting.
Yeah, and what will be nice about that is that you’ll be able then, like you said, to understand their preferences better. So I know all of us get many, many emails every day. It’s become more of a noisy channel than productive. So, to your point, It’s a great way to continue to engage with that customer post-purchase.
Yeah, absolutely. Beyond that shift to sustainability and things, any other trends that you’re seeing with the brands you work with in the months and years ahead, when it comes to branding positioning?
I do think that people will continue to focus on the returns experience. So, actually, one of the things that we’ve started to see, and this again goes back to thinking about the future and sustainability, some brands are suggesting that you don’t return an item, right? If, at the end of the day, the cost of the return, both in transportation and in the physical handling of the product, doesn’t really make sense, they’re suggesting that you donate the product or that you gift it to someone else. And so I do think there will be a lot more to talk about in the circular use of particularly, like, apparel and packaging for beauty products. So I’m curious to see how the circular use of products – and the focus on recycling of apparel right now is really big. So I do think brands need to think about the life cycle of their product. So, when the product is used up or has reached its useful life, where does it go and what does it do and how does that become part of the brand experience? It benefits them because you might want to replace it or upgrade, or whatever the item is, but it also is a good story around sustainability and continuing to protect the planet.
About the Guest
Laura Ritchey is EVP and COO of Radial, where she brings decades of experience having held leadership positions at L Brands, Victoria’s Secret, and Fullbeauty Brands. At Radial, she works with over 170 clients across management, fulfillment, transportation and customer care needs pertaining to eCommerce activities. She leverages automation and technology to enhance service delivery while maintaining high touch client engagement and identifying industry and vertical trends most prevalent to her customers.
Laura also holds a BA, JD and MBA from The Ohio State University.
About the Host, Greg Kihlström
Greg Kihlstrom is a best selling author, speaker, and entrepreneur and host of The Agile Brand podcast. He has worked with some of the world’s leading organizations on customer experience, employee experience, and digital transformation initiatives, both before and after selling his award-winning digital experience agency, Carousel30, in 2017. Currently, he is Principal and Chief Strategist at GK5A. He has worked with some of the world’s top brands, including AOL, Choice Hotels, Coca-Cola, Dell, FedEx, GEICO, Marriott, MTV, Starbucks, Toyota and VMware. He currently serves on the University of Richmond’s Customer Experience Advisory Board, was the founding Chair of the American Advertising Federation’s National Innovation Committee, and served on the Virginia Tech Pamplin College of Business Marketing Mentorship Advisory Board. Greg is Lean Six Sigma Black Belt certified, and holds a certification in Business Agility from ICP-BAF.
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The Agile Brand Blog – Greg Kihlström Marketing Technology & Digital Transformation
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