Turn Mistakes into Opportunities: A Retail Approach

Retailers have spent the last 20 years building the execution muscle of meeting OMNI channel promises at scale – order ready times, fill rates, and shipping times have all steadily moved in a positive direction.

Retailers have significantly enhanced contact rates along the way through improved execution. Every retailer we talk to is working on reducing “Where Is My Order” (WISMO) calls. However, we propose they could achieve more and increase the contacts they make with consumers in a different way.

Recent advancements in moving fulfillment data dynamically upstream into the shopping funnel are creating the expectation for consumers that retailers should be able to promise against these variables down to the hour. 

According to a recent survey, 38% of retailers are worried about meeting consumers’ fast delivery expectations. As they begin to address these expectations, many retail IT teams are finding that the process is costly and complex.

Retailers currently using promising engines to provide estimated delivery date commitments are reaping the benefits of improved conversion rates and increased customer loyalty.  

However, there is another opportunity to further drive customer loyalty that retailers are not leaning into.  

You made a promise, now what?  

If I knew what promise I made to you, it would seem there are numerous opportunities for a retailer to follow up on exactly how they are doing against that promise. This applies not only when things might be going poorly but also to celebrate when they are exceeding it. For example, if I promised you that the order would be ready for pick-up in two hours and I had it ready in one hour, instead of communicating that the order is ready, communicate that the order was ready one hour ahead of schedule and express your excitement to serve them promptly. Conversely, if the order is not ready in two hours as promised, tell them you are committed to improving and that a $5 coupon will be waiting for them at the store, along with their order.

We are already seeing digitally native brands like Temu proactively crediting customers when they recognize an order is going to be late. All the pieces are now available for retailers to offer more frequent and substantial updates to their consumers. For example, if you know the shipping label is created, but the carrier pickup window is missed that day, instead of marking the order as shipped, tell your customer that it’s ready for shipment, and based on your estimates, will still arrive on the date promised.

There is also an opportunity to enhance how retailers respond to availability level promises. Take the dreaded “unknown backorder,” for example. The typical approach to this scenario has been to let the consumer know the item has gone on backorder via email and hope they are patient enough to wait. A different approach could be to provide a link to a 10% discount on a similar in-stock product by using the same merchandizing data you are deploying on the site. Also, if the item is available in another part of the store network, consider trying to source it from there.

It’s not just data about the order that retailers can leverage to delight and exceed expectations. What’s going on around that order? When a consumer calls or starts chatting with your customer service team about order status, and you systemically recognize the order is indeed delayed, trigger a coupon offer or an immediate appeasement tailored to the inbound inquiry – before they even start talking to you. Now that’s a “wow” experience.

The point is, we’ve improved significantly in making promises over the last five years. Why aren’t we doing all we can to show consumers that we’re meeting our promises but also proactively reacting when we’re not?

Yet, there is an even bigger opportunity.

What if the promise you made turns out to be unprofitable?

Typically, the promises that get made in cart and checkout are making certain assumptions that can wind up wrong once the execution system gets a hold of them. These miscalculations could be from poor inventory visibility, capacity issues at distribution centers (DCs) or stores, or sourcing decisions that are optimizing on a different set of factors.

Let's take this example. Perhaps you made a promise based on inventory availability at one DC location, but now the order is going to split three ways across a DC and two stores. Based on the available data, you know this is going to cost an extra $30 in shipping costs for a $150 order, which originally had a $30 expected margin based on a single shipping location. However, you also know that the shipping location will have all the items in the order based on an inbound purchase order (PO) which will eliminate the split.

Instead of incurring the shipping expense, you trigger an intelligent offer to the consumer. You could ask them if they would be ok waiting for five days for the order, and in return, you’ll credit them $20 for waiting. All of this can be done with business rules and be fully automated. Even if only 25% of people in that scenario take the offer, you would save $10 per order each time. And the remaining 75% would be impressed that you gave them the option.

There is an enormous opportunity to take lemons and make lemonade in our downstream fulfillment promises. What if your same-day delivery provider didn’t pick up the package? Instead of a poor delivery experience and a likely call to the support center, proactively alert your customer this has happened and offer a coupon if they are willing to modify the order to Buy Online, Pick Up in Store (BOPIS) instead. For every unintended event – good or bad – deviating from your promise or even your expected “happy path”, you have an opportunity to be proactive, transparent, and provide options that increase loyalty and trust in your brand.

Simply put, every mistake is a margin and loyalty opportunity, while every successful execution is a missed opportunity to highlight your great execution and build confidence. We’ve spent the last 20 years in OMNI channel fulfillment driving scale and execution. Retailers are embracing the idea they should take credit for this and start making specific promises to drive conversion. The next step is to embrace the opportunities that you create when you make those promises. The data is there, the tools exist.

Are you interested in taking promising to the next level?

Take your OMNI channel operations to the next level. Download more ideas here to exceed your customers' expectations. At Nextuple we’ve designed a set of OMNI Channel fulfillment microservices to help you get the most out of your fulfillment network. Come talk to us.