I recently had breakfast with Chris Jones, EVP of Marketing and Services at Descartes and he was telling me about supply chain acrobatics at some of the customers of their Logistics Technology Platform.
One of them is the John Lewis Partnership which operates 35 John Lewis shops across the UK (29 department stores and six John Lewis at home), johnlewis.com and 274 Waitrose supermarkets. The business has annual gross sales of over £8.2bn and has implemented Descartes’ Reservations and Route Planner solution to consolidate home deliveries for larger goods into one dynamic booking system.
Chris: “We worked with John Lewis on a home delivery system for their multi-channel retail operations. We have implemented systems with many other retailers for home delivery across the globe. What is different here is their objective. They could have said that all they wanted was a system that took delivery orders and executed them efficiently. We could have saved them money just like we have done for 100s of customers.
John Lewis wanted to wanted to take a traditional “back office” function and turn it into a competitive weapon, growing revenue, improving customer service AND reducing operational costs. The biggest complaint that consumers of “white goods” (furniture, TVs, etc.) have is “Mr. Retailer, when am I getting my stuff?” We all hate to sit around and wait for it to show up – some time. We are more willing to buy from someone who gives us delivery choices and doesn’t waste the entire day.
However, the common thinking in retail is that increased service levels meant increased costs. It’s sort of an “urban legend.” But what if the delivery appointment scheduling paradigm could be changed by steering consumers to delivery times that were more economically favorable to the retailer or offering the choice to pay for the privilege of premium time such as lunch or on a Saturday? In the most simple terms, we have turned the delivery appointment discussion with the consumer from “asking” to us “suggesting”. Think of the new conversation as “here’s what we can do and what your options will cost” as opposed to “what do you want?”
This new conversation now takes place during the sales cycle whether on the web or at the point of sale as opposed to sometime later. The result is that some customers will pay more for premium time, some take the retailers low cost to deliver option and others will buy value added services if they believe they can get them coordinated with their delivery. The result for John Lewis is happier customers because they have choice, more revenue because of premium times and value added delivery services and lower operational costs because customers are taking the most economical delivery times.
Yes, there is some amazing technology that is working behind the scenes to provide the smart answers. However, if John Lewis hadn’t have made the first step of thinking of making it’s delivery operations a” competitive weapon” as opposed to a “necessary evil”, none of the latest and greatest rocket science technology would have mattered.”