Retailer Could Benefit From Some Inside the Box Thinking

Discussion
Oct 09, 2013

There’s a big reason the vast majority of my online orders are placed with Amazon.com. When I place an order, it arrives on schedule and comes out of the box in one piece.

A little more than a month ago, I placed an order for glass cleaner refill bottles from the e-commerce site of a major retail chain. That began an odyssey, which left me asking myself, "Why didn’t I just use Amazon?"

Phone Call #1
When the date of expected delivery passed, I checked and was told apologetically that the package was in transit and would arrive within a couple of days.

Phone Call #2
True to the call center rep’s word, I received an e-mail a couple of days later informing me the package had been delivered. But wait, the address was somewhere in the Midwest and I’m in New Jersey.

I called the retailer again and the confused call center person told me she would check to see what happened. After putting me on hold for a short period, the rep informed me the package was returned to the company’s DC because it had been damaged in delivery. Instead of the company just sending me a new order, I was told I would have to cancel the previous order and place a new one. Figuring that any company can run into damaged packaged problems from time-to-time, I placed a new order.

Phone Call #3
My newly placed order showed up on time. It did not, however, arrive intact. In fact, bottles were placed in a box that seemed too big and certainly didn’t prevent the glass cleaner from bumping around inside. The result was a very wet box with the contents of two bottles nearly emptied. (I’ve ordered liquids from Amazon before and never had this issue.)

I called the contact center to inform them of yet another mishap with my order. Again, the person on the line was very apologetic and said the retailer would credit my card for the two bottles. I declined to order replacements.

A short while after my call, I received an e-mail with instructions for returning the spent bottles. Return the bottles!?

Phone Call #4
By this time, my normal good-natured approach to difficult situations had left me. I called and asked why, after two rotten experiences, the company expected me to go find a box, head to the UPS store and return two empty bottles of window cleaner. After being put on hold, the contact center rep apologized and told me sending back the package would not be necessary. He reconfirmed my card had been credited and, although he didn’t say so, I’m pretty sure he knew my business had been lost.

How is it that Amazon seems to consistently excel when it comes to fulfilment while others struggle? Do you think the issue is more acute with brick & mortar store operators that are engaged in e-commerce?

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33 Comments on "Retailer Could Benefit From Some Inside the Box Thinking"

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Dick Seesel
BrainTrust

We all have similar stories about brick-and-mortar chains who simply don’t execute well on their websites. My recent example involves a large national department store chain whose struggles over the last 18 months have been well-documented. I ordered an area rug…they shipped the wrong rug…I returned the rug to a local store and reordered it…they shipped the wrong rug…I canceled the order.

In this case, the item was shipped from a vendor, not from the company’s own distribution center, and I believe a lot of these problems occur because of the second-rate logistical management of the retailers’ “partners.” Amazon uses a lot of second-party shippers but appears to be equally scrupulous about its own execution and its suppliers’ execution. Its aggressive expansion of its own distribution network is another key advantage, compared to “omnichannel” retailers trying to cut corners.

Ken Lonyai
BrainTrust

Sorry George.

Amazon is laser focused and has invested in its core capabilities successfully. Although it has many interests, it doesn’t seem to have taken them on at the peril of its basic business model. Inexplicably, so many other Internet only merchants don’t get it and/or just can’t replicate that model. B&M retailers that have built online presences generally have fared worse.

It’s one more example as to why Gap CEO Glen Murphy’s comment, “Some people talk about Amazon with their 100 distribution centers, God bless them. We have 2,600 distribution centers,” is naive. Many successful retailers are not prepared/capable of being successful m/e-commerce providers and may never be.

BTW – I’d really love to guess which retailer this was.

Zel Bianco
BrainTrust

Yes, Amazon knows how to do this, period, end of story. They built the business on this and have it down. Many traditional retailers are still playing catch up and these mishaps are the result of not paying attention to the thousands of details it takes to get it right. Amazon is a powerhouse in e-commerce for a reason.

Steve Montgomery
BrainTrust

E-commerce is Amazon’s business – its only business. It has developed an internal process and honed it into a fine skill. Many others are still learning how to do it right, from order processing to packing to delivery scheduling and then how to handle it when things go wrong. The issue is, do you want to be part of their learning process?

I have ordered from a variety of online retailers including some B&M and never had the extreme issues that George encountered. Perhaps I have been lucky or there are other companies doing e-commerce that are further along the path than the one he ordered from.

Paula Rosenblum
BrainTrust
Oh, Amazon has totally ruined us for any company that doesn’t have high inventory availability and delivery standards. I had a similar experience with A/C filters and gave up after the second try. I didn’t even bother trying to get my money back. They shipped the things in an inner pack…so, of course, UPS bent them with forklifts. (You could actually see where the “feet” had hit the box, both times.) Amazon excels because a) it listens to its customers, b) it probably listens to its vendors on how to package, and c) I’ll bet anyone here a quarter it does tests on packaging of particular products when it starts to carry a new one. The one time the company let me down was when I ordered a TV to be shipped to my house and then taken with me to St. Croix. The packing material seemed way too flimsy and I didn’t want to open the inner box, because…well…you know how hard it is to put a TV back in its packaging. But check this out — I called them and explained my problem. I was immediately issued an RMA for the TV and a new one was shipped… Read more »
Bill Davis
Guest

Amazon was built for ecommerce fulfillment where most retailers, excluding most catalog merchants, aren’t. Retail supply chain (e.g. inventory availability, dynamic shipping pricing based on service level and customer location, order state visibility, etc.) is a significant piece of managing customer satisfaction, yet most retailers do not do this well.

Amazon was built specifically to address this, catalog merchants also tend to have some competencies here but this is a shift for many retailers so its going to take time for them to improve their performance as there is more of a learning curve.

Matt Schmitt
BrainTrust

Fulfillment is Amazon’s core business. To that end, some brands may be better served in the long term, leveraging Amazon instead of trying (and failing) to replicate their excellence. While I know that won’t make sense for many retailers, I’d be surprised if we don’t see some brands begin to focus more on building great products and customer relationships, while leaving the fulfillment game to a partner. Whether that’s Amazon, or an emerging player focused on delivering on behalf of many brand partners, we’ll see.

George Anderson
Staff

I’ve often found this particular retailer has some issues getting product to its store shelves unscathed. I should have taken that into account before placing my order for home delivery.

Max Goldberg
BrainTrust

Amazon has a commitment to excellence that most retailers just talk about. E-tail is different from retail. It’s not just pick, pack and ship. The right containers need to be used, shipping and arrival information needs to be accurate, customer service agents need to be empowered to fix problems, and returns must be fast and easy. Amazon has mastered this. Their sales reflect this commitment. Not many other retailers can match Amazon’s performance, which is why the company is so successful.

Peter Charness
BrainTrust

Lesson one for retailers: don’t casually try out new things. If you are going to get into a new business, check the competitive standards and think it through.

Worst news for them, bet you won’t be shopping at that retailer’s store anymore either – never mind using their ecommerce site….

Jason Goldberg
BrainTrust

Amazon does fulfill more than 15% of the direct to consumer shipments in the US, so it’s not surprising they are very good at it. 🙂

Amazon routinely tops the rankings for overall customer satisfactions (like the ASCI benchmark list, and the NRF Customer Choice Awards) over legendary customer service firms like Nordstrom and L.L.Bean. And they do it despite actively discouraging customers from talking to them for most of their history.

It’s a stark reminder that shoppers perceive customer service based on attributes of the experience they value (like fast, reliable logistics), not necessarily the ones a retailer would like them to value (friendly, helpful people).

Ed Rosenbaum
BrainTrust

Amazon is focused on one thing only. Getting you what you want when you want it, for a better than fair price. Then it is backed up by the extraordinary customer service brought by Zappos. It leads one to ask, why go somewhere only to be unsatisfied?

W. Frank Dell II
BrainTrust

Online sales are competitive not only in price, but also in service. Filling an order is not difficult, but a little common sense helps. Service must be equal to or better than picking up the product in a store. There is no reason product inside the box should be damaged. Yes, there is damage in shipping, but it is much smaller a percentage than most people believe.

The better operators keep the customer informed with a minimum of two communications. First, your order has left the warehouse and is due to arrive at your location on a specific date. Second, your order is due to be delivered tomorrow. This can be easily communicated by simply connecting with the carrier. Unless the service is flawless, repeat purchase is in jeopardy.

Todd Sherman
Guest
Todd Sherman
4 years 14 days ago
Amazon has VERY high performance standards for all operations, from making it easy for customers to find/decide/buy products to fulfilling the orders. There are a few reasons why they are so good at it. (Disclosure: I spent more than 4 years working for Amazon managing a chunk of the “Selling on Amazon” program.) 1) Complete focus on the customer. That sounds exactly like what a lot of other retailers say, but Amazon takes it to an almost cultish level. And it’s not just about being friendly when a customer has an issue, it’s about making sure that same issue does not happen to any other customer ever again. Plus, they are very forward looking on potential problems and solving them before they ever occur. 2) The culture. They are relentless. Continuous improvement and projects are never really finished. Lots of purposeful meetings that covered issues like “why did last week’s shopping cart conversion rate for home products drop .1%? Let’s have an answer in 15 minutes.” And then immediate action to resolve. 3) Scale for effective self-service. While that sounds like a truism, think of it this way: Amazon is selling more than $60 billion dollars of goods through a… Read more »
Cathy Hotka
BrainTrust

Retail companies need to have big-picture strategic discussions internally about how they want to conduct their businesses. I managed a CIO dinner discussion last evening in LA, and participants complained that the CIOs are trying to engage their companies in holistic discussions about strategy, but with mixed success. Retailers that want to conduct ecommerce have to do it right or not at all. What’s the strategy?

Mark Burr
Guest
4 years 14 days ago

How is it that Amazon seems to consistently excel when it comes to fulfillment while others struggle?  The answer is culture, execution, focus, and did I mention culture, execution, and focus?

E-commerce is not the core business of brick and mortar retailers. To most of the brick and mortar retailers it is a step-child part of their business, for which they have little expertise. Most likely don’t realize its significance in their ability to compete at any level going forward.

Mark Heckman
BrainTrust

Amazon and “e-commere best practices” are synonymous. When you practically invent the standard by which all other e-commerce sites aspire to, it typically implies that customer service and service-based logistics are embedded in Amazon’s corporate culture. The notion of serving the customer – increasingly better with each successive transaction – drives their thinking and process.

Unfortunately, this is likely not the case in many organizations that are venturing into e-commerce, either as a sole means of sales or in tandem with their bricks and mortar stores.

The arduous customer experience and process George describes is unfortunately very common. The common sense approach to remedy customer-unfriendly systems, is to simply asked for customer feedback, constantly and be willing to make changes accordingly.

While this recommendation may sound over simplified, I still find it amazing how many companies remain driven by numbers and logistics and not by the resulting customer experience.

Amazon is winning because they have empathy for the shopper, but they are also winning because their competitors are still stuck in the mode of letting the logistics and process rule the day.

Herb Sorensen
BrainTrust

It comes down to the retail DNA of the businesses. Most major retailers of any size spent decades growing in a store-as-warehouse, self-service mode. Contrast this with Amazon who has built commerce from scratch, and is now looking over the fence on how to leverage their considerable expertise, either in cooperation with bricks retailers, or in competition with them.

Amazon enjoys the benefit of “built from scratch” over a couple of decades, vs. trying to overlay foreign thinking on legacy businesses.

Bill Bittner
Guest
Bill Bittner
4 years 14 days ago
I agree with George. I think Amazon has set a very high bar. Maybe a better way to establish a base line for delivery of liquid in glass bottles would have been to place the second order with another brick and mortar retailer (just kidding). When you do the same thing every day and it is the foundation of your business model, you (hopefully) get very good at it or you don’t survive. There are two things that I think are highlighted by this experience. First is that some brick and mortar retailers are still learning the ropes of online fulfillment. I don’t know if this particular retailer was running their own center or used the services of a third party, but it is obvious they have some more work to do on packaging and labeling. The second thing is that handling mishaps can be difficult. I can imagine the retailer’s old brick and mortar loss prevention team looking at the fulfillment model and asking “what prevents customers from claiming damage when there was none?” I am sure this happens and with all the online options a nefarious consumer could play this game with hundreds of retailers before they are… Read more »
Ralph Jacobson
BrainTrust

Corporate culture dictates the quality of shopping experience, from order taking, through the DC, to the final delivery hand-off to the consumer. If there is a strong sense of commitment to excellent customer service throughout an organization, then that tends to become the overriding characteristic that drives customer satisfaction.

I don’t believe that there is any inherent obstacle blocking excellent service for brick & mortar merchants. I believe that senior leadership needs to set the tone and constantly follow up with corporate performance in this area. Specific shopper feedback needs to be brought to the attention of the leadership team. Problems need to be resolved the way the customer wants them solved. Taking care of a disappointed shopper is far less expensive than losing that customer.

Ben Ball
BrainTrust

This post may put me over the 100 mark in the number of times I have commented to the effect that online retailing is really about home DELIVERY systems. And that the heart of DELIVERY is PICKING and SHIPPING – effectively and efficiently. Amazon has a core competency in home delivery. Retailers whose business systems are built on brick and mortar fulfillment do not.

It really is that simple.

Chris Petersen, PhD.
BrainTrust

Very simple … Amazon was built from the ground up as an e-commerce business, totally focused on the consumer experience. From Bezos to the line worker, it is all about earning both the consumer’s business, and lifetime loyalty.

The discussion thread mentions an experience with an e-commerce site from a “major retail chain.” Bricks and mortar stores have the heritage – and baggage – of product-centric merchandising. Many of the major retail chains’ web sites were designed and set up to “sell products”… not to provide a total end-to-end experience from the consumer’s point of view.

Until major retail chains understand that the consumer values quality of the experience before, during, AND post purchase … Amazon wins on loyalty and repeat business.

In fact, I’m hearing a new phrase for this holiday season … “Just Amazon it!”

Kenneth Leung
BrainTrust

For Amazon, their entire customer experience is driven by online and delivery experiences. With a lot of other retailers, they are doing this as an add-on to their business and using lowest cost third-party fulfillment. Without the executive commitment to be best in class, it is easy to do things wrong online, as you can see from the examples given.

Gene Detroyer
BrainTrust

1. Amazon is customer centric.
2. Amazon is customer centric.
3. Amazon is customer centric.

Matthew Keylock
Guest
Matthew Keylock
4 years 14 days ago

It was designed in from the start, not bolted on.

They also could learn and perfect solutions when their business and brand was in its nascent stages and so …

(1) perhaps could be forgiven more easily;
(2) face relatively tiny costs to right wrongs and have more ability to address these in a personal way. Of course, at this nascent stage, managing issues would also be done by people far closer to real decision-makers and founders of the business and so enable better resolution and faster prevention;
(3) face far less public and impactful PR issues;
(4) shape their P&L and choose their margin(!!) and manage expectations accordingly, instead of navigating entrenched Wall Street expectations;
(5) allow them to focus 100% on getting this right;
(6) enable the establishment of a new paradigm and then continue to push the boundaries instead of trying to catch up.

James Tenser
BrainTrust

Fulfillment has challenged pure-play and brick-and-clickers since e-retail’s inception.

“Getting the sale is easy; delivering on the promise is hard.” (That’s a dust-jacket blurb from my book published in 2001.)

Amazon leads an elite few who have nailed the fulfillment part of the equation. It refined its methods in a few dedicated centers, and now is expanding strategically to more locations.

Contrast that with brick and click retailers who are newly confronting the endless aisle, virtual inventory, and pick-pack-and-ship practices for the back rooms of hundreds of stores.

No wonder there is a reliability gap. Traditional retailers have their work cut out for them. Without rock solid fulfillment, even beautiful Web merchandising is little more than a veneer.

Gene Hoffman
Guest
Gene Hoffman
4 years 13 days ago

Somebody said to Jeff Bezos “It couldn’t be done” when he said he would create an advanced process for achieving exact performance in distribution fulfillment.

Somebody said “it couldn’t” be done
And Jeff Bezos with a chuckle replied
“Maybe it can’t but maybe it can,
How will you know until I try?”

Morals: Set zenith goals and develop a healthy disregard for the impossible. Stop asking dedicated perfectionists such as Jeff Bezos silly questions. As for B&W stores, seek out and hire a budding Jeff Bezos.

Shep Hyken
BrainTrust

The issue is simple. It’s customer service – or lack there of. The system has to work. If it breaks down, it doesn’t matter if it is a brick and mortar store or an e-commerce retailer. There has to be a backup system. Some companies get this more than others. Regardless of technology and sophistication of the system, when it breaks down it has to be supported by people. By the way, I’ve had an issue or two with Amazon.com. Their recovery is excellent.

Perfection (when it comes to shipping – and most other things) is not reality. It is a goal. In the process, there will be mistakes. It’s how they are handled that restores the customer’s confidence.

Al McClain
Guest
Al McClain
4 years 13 days ago

Just a note that there ARE brick and mortar retailers who handle shipping well. I have ordered a wide variety of products from Staples and typically find the shipment at my door by noon the next day. With FREE shipping.

George Anderson
Staff

To Al’s point, I’ve had very many unremarkable (AKA successful) experiences ordering products from brick & click merchants. I know now, however, that there are some items are are best bought from Amazon or by going to a physical store and picking it up myself.

Mark Price
BrainTrust

Fulfillment is fundamentally a question of attention to detail. The challenge is how to pay attention to the details of each individual order as a business scales. A combination of technology and culture is required to ensure that orders are placed and delivered on time, that the information is communicated effectively to customers and that the product arrives intact every time.

Amazon has the benefit of many years of “pure play” experience in which they have perfected the technology and reinforced the culture to deliver and meet customer expectations consistently. Traditional retailers have usually underplayed the value of culture, of attention to detail, in the search of reduced costs and improved efficiency. When that approach is applied to e-commerce logistics, nothing good will come out of it.

gordon arnold
Guest

There are many internet published statements of dissatisfaction where the creator of a mess like the one described in this discussion is none other than Amazon. Amazon does a great job. But they are far from perfect. There is plenty of opportunity to compare messes that have happened and seem to be impossible to end in time for a customer to be happy from many different companies. E-commerce is here to stay for the foreseeable future with or without Amazon and or anyone else. A study or discussion of what works for retailers from both sides would be more helpful for all.

Mike Osorio
Guest
Mike Osorio
4 years 13 days ago

Maniacal focus. This was always and continues to be one of several Amazon industry-leading areas of expertise. Any company can get to their level of fulfillment expertise – IF they have the same maniacal focus on fulfillment perfection.

Pure-play etailers tend to be better than bricks & mortar retailers, but it is certainly no guarantee. Why don’t more put a maniacal focus on fulfillment? One of our industry’s great mysteries.

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