Customer Experience Strategies: What Supply Chains Can Learn from Amazon

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Amazon has upped the ante for customer service with benefits such as same-day and next-day delivery. To remain competitive, supply chains must adopt new strategies to enhance customer experience. Following are examples of effective business strategies from companies that not only meet customer demand, but exceed it.

Amazon’s fulfillment strategy

Convenience is important to consumers; e-commerce businesses like Amazon provide 1-click shopping and free 2-day delivery. Businesses must be able to keep up with demand. To improve the customer experience (CX), businesses need effective fulfillment strategies.

“Amazon is the behemoth, setting expectations for things like shopping ease, price, and assortment,” . While traditional brick-and-mortar stores offer free in-store pickup, Amazon recognizes that busy households want the convenience of delivery. With Amazon estimated to have over 300 million customers, they have various techniques to help ensure  with timely order fulfillment.

Fulfillment centers, warehouses, and picking strategies

Employing about 542,000 employees, Amazon uses several fulfillment center strategies. Amazon has multiple fulfillment warehouses, which are based on categories. These include largely sortable items, small sortable items, non-sortable items, customer returns, specialty items, and groceries.

Employees, or “pickers,” manually inspect, sort, pick, unload/load, and pack items. They use pick lists to efficiently process orders.

To speed up cycle times, Amazon uses Kiva robots for same- and next-day orders. Kiva robots can:

  • Improve picking accuracy to prevent incorrect items from being shipped.
  • Offer flexibility to meet demands with unexpected seasonal surges.
  • Ensure the efficient storage use of their long-tail inventory.

For supply chains to meet demand and improve the CX, CSCOs should leverage their technology by optimizing inventory control to reduce stock-outs. To reduce costs and wasted capital, companies can improve inventory levels with , and use demand forecasting tips, and .

UPS supply chain solutions

The best customer experience strategies include ways to expedite deliveries, reduce delays, and offer optimal customer service. One company that understands logistics and customer experience strategies is UPS.

The global shipping carrier has:

  • 500+ facilities totaling 34 million square feet of space in 125 different countries
  • 245 planes, 119,000 vehicles, and 1,800 operating facilities
  • 5 million pick-up customers and 9 million delivery customers
  • 5.1 billion packages and letters delivered in 2017
  • 20 million packages and letters daily

With logistics strategies, UPS suggests that businesses rethink their transportation routes and modes. , “Small parcel carriers can often provide cost savings on multi-piece shipments that don’t involve a full pallet or multiple pallets.”

Other helpful tips include:

  • Pickers and movers: Put the fastest pickers and movers near the shipping station to reduce processing time.
  • Lowering costs: To reduce inventory carrying costs, put movers and pickers in warehouse locations where labor costs are lower. This also lowers inbound shipping charges.
  • Packaging materials: Keep packing materials nearby. Have staff pick directly into pre-labeled boxes.
  • Automate: Use wireless automated printers and radio frequency identification (RFID) tags that recognize SKUs. They can track inventory and reduce shrinkage.
  • Custom packaging:Use on-demand packaging. Machines can die cut box sizes per specs to ensure a proper fit to reduce transportation and packaging costs.
  • Improve technology: Leverage cloud-based technology for real-time accuracy with inventory and shipments to improve visibility end-to-end.
  • Customer service: Use automation for tracking, AI for customer texts, and have human customer service agents available. Let customers choose their preference. When customers can track orders in real-time, complaints and negative sentiments are reduced.

In Conclusion

Customer experience strategies should include a combination of logistics, technology, and savvy planning. Before businesses offer services like next-day delivery, they must ensure they can meet demand from end-to-end. Businesses that leverage technology with inventory optimization software and logistics software not only improve customer experience strategies, but outperform the competition and exceed customer expectations.