OPINION | David Kindl

For all the investments made by retailers into their back-end logistics, are we getting the customer-facing areas right?

Aussie retailers are dealing with many issues in 2018. There is growing competition from online retail, overseas retailers arriving on our shores, consumers experiencing low wages growth and higher costs of living – just to name a few. Disruption and distractions are everywhere.

It is great that so many fashion and apparel retail businesses across this country have risen to the challenge and are focused on what they can control, rather than what they can’t.

They have leveraged their existing in-store fashion experience, to create a successful online offer to their customers. They are growing their retail ecosystem in this changing and dynamic market.

However, there is one part of this new retail model that many retailers are not doing so well.

Fulfilment is defined as “the achievement of something desired, promised or predicted”, or as it is called in retail and online selling, ‘the last mile’.

This refers to the time, effort and cost in delivering the product into the hands of the customer after the sale has taken place.

I am not referring to the detailed back-end retail data programming essential to running a business, but to the more basic and customer-facing areas of packaging and delivery.

So why make the effort? Well, online sales represent at least 10 per cent of all retail in Australia and the number is growing. For the fashion category that number doubles to around 20 per cent.

Fashion retailers’ online store is normally their top turnover and most profitable distribution channel; therefore, it needs all the care and attention that a flagship store normally receives, and more.

Securing fulfilment for your consumers starts with a solid link to your online store and back-end inventory system.

If your garments on sale online do not match with inventory actually held, then you run the risk of selling what you don’t have, and this frustrates the consumer.

Remember the most valuable thing customers have is their time – so don’t waste it.


Packing – make the effort

While expense control should always be a focus in retail, the aspects of your business that the customer experiences directly should have some serious effort and resources attached to them.

Many fashion houses simply shove the purchased garment at the bottom of a plastic bag and then that bag is unceremoniously shoved into a post bag or satchel.

This is not a pleasant way for the customer to receive their purchase. Ask yourself, are you happy that your customer’s new garment needs ironing as soon it is delivered to them?

We would always recommend, especially with apparel, wrapping the garments like it was a gift to the customer. Fold the garment with all the care it is folded on display on the flagship store.

Visual merchandising teams should train online store packing teams, on the art of folding.

Next, garments should be placed carefully into a quality cardboard box with tissue paper and some branded ribbon to complete the packing. The package should also be carefully fitted into a post bag or box, in order to ensure that no damage is done during the delivery process.

When customers finally receive their package, they will have the very pleasant experience of opening and unwrapping their ‘present’, courtesy of the retail business. Customers will rave about the packing and the experience to their family and friends.

Ask yourself if your brand values are aligned to the way you package the purchases of your valuable customers.

Lastly, retailers should take the opportunity to include promotional material and product information within packaging. Marketing messages can be delivered directly into the hands of an engaged customer through online orders.


The ‘last mile’

Strong relationships with customers are created when their expectations are met.

Many shoppers who have not received their purchase in the agreed time frame – and it happens from time to time – become

frustrated and call the fashion retailer, only to be told, “The delivery company is running late, it is not our problem”. This is a ridiculous response.

The customer has made the purchase from the retailer and has no agreement with the delivery company, it is up to the retailer to get the garments to the customer on time.

Never blame someone else when you have taken the customer’s payment.

While the costs of delivery and the last mile are not cheap, it is generally much cheaper than the rental and other fixed costs of a standard retail store.

Also, on a service level, ask yourself if your delivery partner is living up to your own expectation on how your customers should be receiving their garments and set KPIs around the expectations.

There are many great delivery options available from local firms in the market at the moment, including the ability to track the package on its journey to the customer. This type of shared communication with your customer creates trust and builds repeat business.

Retailers should ensure that they offer customers delivery options that the business can achieve, aiming to deliver garments to customers on the day agreed upon when the order was made online.

With the rise of the mega-online retailers, retailers should also be aiming for timed deliveries during the day, remembering to always allow for delivery to post office boxes, apartments and homes.

Also, don’t ignore the ability of store team and area managers to make those last minute deliveries to customers.

It may be a gown for a wedding that just has to be delivered by Friday night – imagine the customer’s gratitude when the local store manager hand delivers the garment. This is how brand reputation is built. Of course, this is the exception rather than the norm.

Most importantly, in my view, is the last part of the sale process – this happens well after the customer has unpacked their new garment and finished the online transaction.

It happens when the customer first wears the garment and when their friends or family say to them, “Wow, you look fantastic, tell me where’d you get that from”.


David Kindl, is Head of Strategy at Retail Doctor Group and the former Noni B co-chief executive.

First published in InsideRetail Weekly 2199.