Does Your Logistics Provider Support Your Customer Experience?

©
2016 Purolator International, Inc.
Does Your Logistics Provider Support
Your Customer Experience?

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Does Your Logistics Provider Support Your Customer Experience?
When retail chains Eddie Bauer and Pac-Sun
learned that some customers’ holiday deliveries
would most likely arrive after Christmas, they did
what many businesses would have done – they
blamed the carrier. But this attempt to proactively
avoid the wrath of angry customers may have been
for naught: Turns out, most consumers probably
blamed them anyway.
Research by marketing consultant Acquity Group
found more than half of surveyed consumers (52
percent) blamed the retailer when a shipment
arrived late, versus 49 percent who said they would
blame the shipping company. But, the impact
can be devastating to a retailer. Of the 69 percent
of those who said they had experienced a late
delivery, 63 percent said it would negatively impact
their relationship with the retailer, with 23 percent
indicating they would “cease ordering from that
company altogether.”
Toys “R” Us suffered a similar customer service
fiasco, when the 2015 holiday shopping season
was marred by chronic stock outages in its online
operations. According to the Wall Street Journal,
the toy and juvenile apparel retailer’s website was in
stock just 62 percent of the time on 100 top selling
toys, compared with 76 percent during the
previous year.
Supply Chain 24/7 noted one customer’s
description of their shopping experience:
“The shelves were very empty and it felt like we
were shopping leftovers.” For a brand that built
its reputation as the “go to” source for toys, the
retailer suddenly found itself unable to live up
to expectations.
In each of these examples, customers had a less
than satisfactory shopping experience, which may
have cost the retailers the most coveted prize of
all – customer loyalty and retention. As reported in
Forbes Magazine, research by the Gartner Group
found that 80 percent of a business’s future profits
will come from just 20 percent of its existing clients.
Further, a study by Bain & Company concluded:
“Increasing customer retention rates by five percent
increases profits by 25 percent to 95 percent.”
Clearly then, businesses have a strong sense in
providing customers with a highly satisfactory
experience. In fact, internationally-recognized
management consultants
Introduction
Introduction
“…80 percent of a business’s
future profits will come
from just 20 percent of its
existing customers…”
Source: Gartner Group, as reported in Forbes Magazine

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Don Peppers and Martha Rogers in their influential
book, Return on Customer, declared the customer
experience “the single most important factor for
business success.”
And what exactly is meant by “customer
experience?” The Harvard Business Review
defines the concept as “the sum total of all
interactions a customer has with a company.”
This includes everything: Marketing, promotional
offers, advertising, customer service, website
design and efficiency, inventory availability, pricing
–- and the critically important role of logistics. That
is to say, the behind the scenes work that allows a
business to fulfill its promises to customers.
Customer Service = The sum total
of all interactions a customer has
with a company
Source: Harvard Business Review
Logistics planning and execution ensures that
inventory is properly sourced and available to
be moved at a moment’s notice; that fulfillment
operations run smoothly; that packages are
appropriately packed and labeled, and that a
package will arrive on time and undamaged. In
addition, for shipments crossing an international
border, the “customer experience” assumes all
customs mandates and regulations are met, and
all duties and taxes are paid.
For a surprising number of businesses though,
the logistics part of the customer experience can
be the most unsettled. Businesses sign on with a
logistics provider, only to learn the hard way that
it does not have the experience or the resources
to deliver as advertised. As the Acquity Group
research revealed, consumers will often blame the
retailer when a carrier fails to deliver on time.
The following discussion will explore the
importance of providing a stellar customer
experience that includes a strong logistics
component. No business wants to lose a
customer, especially over something as avoidable
as a late delivery or sloppy logistics performance.
Introduction

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Customer experience has been described as "the next
battleground," as retailers vie for ways to distinguish
themselves from competitors. As online shopping has made it
easier for consumers to comparison shop and jump between
retailers, the pressure is on for retailers to find ways to
attract – and retain – customers.
With regard to shipping and delivery options, customers
have very clear – and very high – expectations for their
shopping experience, and very little patience for retailers
that do not live up to those standards. Consumers expect
an omni-channel experience, in which they dictate the
terms of purchase and delivery, and about which they have
full visibility. This includes an extremely consumer-friendly
returns process that is hassle-free, fast and highly efficient.
According to research by IBM, top consumer omni-channel
priorities include:
• Ability to locate an out of stock item and have it
shipped to customer’s home
• In-store return of products purchased online
• Personalized online promotions
• In-store pickup of online purchases
• Alternate pickup locations for online purchases
• Ability to use a personal device to scan items
• On-demand personalized product recommendations
(both online and in-store)
Not only are consumers raising the bar in terms of purchase
and delivery expectations, but retailers also face pressure to
provide these conveniences at a minimal cost, with free being
the preferred option. The good news for retailers though, is
that while consumers are very price conscious, they do seem
willing to cut some slack with regard to speed. Research by
Accenture found nearly 60 percent of consumers said they
would be willing to wait between four and seven days for
free delivery, while research by Accent found 88 percent of
consumers said they would be more likely to shop at a site
online if they were offered free shipping.
With regard to returns, consumer preferences are
unmistakable: Free shipping along with the ability to return
an online purchase to a retail store.
Consumers are essentially telegraphing their expectations
with regard to shipping and delivery. The challenge for a
retailer then, is to consistently meet – and even exceed --
these expectations. A consumer must have full confidence
they will have a hassle-free shipping experience every
time, with no surprises and a high degree of efficiency
and professionalism.
As many retailers have learned the hard way, a business can
excel in so many areas – selection, price, website design --
but unless shipments arrive on time, everything else may be
in vain. Bloomberg News reported on a Chicago resident who
ordered two wool caps from a Colorado retailer’s website
as holiday gifts for his wife and daughter. The consumer
requested overnight delivery, and when his package failed
to materialize, he was told that, in fact, the holiday deadline
would be missed. Unless that is, he wanted to drive 30
miles to the carrier’s distribution center to pick up the
items himself.
How did the consumer react to the carrier’s failure to delivery
the shipment on time? By taking it out on the retailer. “I
already wrote an email to [the retailer] asking them to find a
different shipping company for next year.” He then noted that
he’d be reluctant to order something from a company that
used the same delivery provider.
Fair or not, poor performance by a vendor or supplier – in
this case a transportation/delivery provider – can negatively
affect a consumer’s perception of a company. The challenge
then, is for a business to choose suppliers, vendors and
partners that share its commitment to excellence, and will
complement its efforts to create an exceptional customer
experience. Otherwise, a business risks having an outside
vendor dismantle the work it has painstakingly undertaken to
build its brand, and forge relationships with customers.
The Importance of Logistics to a Superior Customer Experience
The Importance of Logistics to a Superior Customer Experience

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Finding the Right Logistics Partner
It may seem obvious then, that a business would enlist an
experienced and capable logistics provider to handle all
shipping and delivery aspects of its business. In fact though,
a surprising number of businesses have been disappointed
to learn about their logistics provider’s shortcomings – after
repeated complaints from customers about poor service and
missed deliveries.
For example, one Wisconsin-based online hunting apparel
retailer learned firsthand the tremendous harm that can
result from poor logistics service. The company had built a
very successful brand based on quality products, thorough
understanding of the needs of the hunting community, a
highly efficient website, and a strong commitment to customer
service. When the company decided to expand to Canada,
it enlisted a globally-recognized logistics company, and put
great faith in that company’s reputation for on-time deliveries
and efficiencies.
But when customers began complaining about late deliveries
and high shipping costs, the retailer knew it had a problem.
Turns out, the company was simply a small fish in the
transportation provider’s ocean of accounts – it simply wasn’t
big enough to get the attention needed to properly service its
customers. As a result, shipments were arriving at the border
without proper documentation, and traveling to Canada via
highly indirect, inefficient routes. Once in Canada, shipments
underwent a series of puzzling delays before finally reaching
their final destinations.
Fortunately for this business, it was able to right this wrong
before lasting damage was done to its reputation. It was a
valuable lesson though, since company managers believed that
by enlisting a high profile transportation provider, there would
be no question about its service and commitment to quality.
But when it comes to choosing a vendor that will interact
directly with its customers, a business can leave nothing to
chance. A business must invest the time to carefully consider
its logistics needs, and then find the perfect partner.

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Following are a few considerations to keep in mind
in selecting a logistics partner that will best serve
your customers and help provide a highly-enriching
customer experience:
• Single source/Comprehensive Solution
Provider. Given the complexities of an omni-channel
supply chain, it is imperative to have a logistics
partner that can offer complete management of
the entire process. This cannot be overstated, as
research by JDA Software Group found that while 35
percent of survey respondents had used a retailer’s
buy online/pick up in store service, almost 50
percent had experienced a problem with their pickup.
A qualified logistics provider will offer comprehensive
services ranging from order management, inventory
management, warehousing, kitting, picking, labeling/
shipment preparation, transportation, delivery,
and all backend functions including recordkeeping
and compliance mandates. And, a comprehensive
provider should also provide reverse logistics
services, to process merchandise returns. This will
ensure continuity, visibility, and most important,
prevent any miscommunication.
• Customization and Collaboration. It’s essential
to enlist a logistics provider that will be a partner.
You want to build a relationship based on mutual
understanding of your business objectives, priorities
and needs. This information sharing can only happen
through many, many direct conversations, and
ongoing open lines of communication. A qualified
logistics provider will use this information to create
a customized solution to meet your specific needs.
Ideally, your logistics partner should be as committed
to your customers as you are, and share your goal of
providing a superior customer experience.
• Customer Service. Equally important is a high
level of customer service. Services should include
a dedicated representative with whom you have a
personal relationship and direct contact information.
Your customer service representative should be fully
aware of your supply chain, provide you with regular
updates, and know about – and resolve- any snafus
or changes before they become problematic.
• Scope of Service. Today’s logistics providers are
able to offer a range of service options that can be
customized to fit a business’ precise needs. If you
find that a logistics provider is forcing you to adapt
your needs to meet its capabilities, it’s a good sign
that the carrier is not up to the job.
• Customs Expertise. If your customer base includes
the Canadian market, it is essential to ensure a
logistics provider has experience with the U.S. and
Canadian border clearance processes. Transporting
goods across the border is a complicated and
exacting process. It is also unforgiving, since
customs agents will delay any shipment that arrives
with incomplete paperwork or unpaid fees, duties or
taxes. Many carriers claim to have expertise with the
customs process, but it’s important to ask for proof
and not leave this important function to chance.
• Technology. Many logistics providers have their
own customized technology solutions that integrate
with their customers’ internal systems. This allows
for a seamless on boarding, and allows several
critical functions to share data, generate reports, and
provide tracking/visibility. Beyond that, consumers
expect a high degree of visibility into the shipping/
delivery process. This includes automatic notification
when a shipment is enroute, and notice when a
delivery has been made. And, should a delay occur, a
carrier must be able to proactively notify a customer.

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Beyond these capabilities, truly innovative logistics providers
are offering increasingly creative options to help retailers meet
customer expectations. In many instances, these “extras” can
provide the competitive edge a retailer needs to distinguish
itself from a competitor.
Last Mile Service
A shipment can travel seamlessly across the country or
around the globe, but it’s the end game – whether or not the
shipment makes it to a customer’s address on time and in
good shape – that will determine the success of a customer
transaction. This final stage – last mile service – is regarded
as critical to customer satisfaction and a key determinant in
customer retention.
Many logistics companies though, outsource final mile services
to local or regional companies, and in the process, lose insight
and control of the process. This further distances a retailer
from its customers, and essentially forces a blind faith in an
unknown and untested delivery service.
Keep in mind that the local courier or delivery person who
arrives at a customer’s doorstep is a reflection of a retailer’s
brand. If a delivery person is rude, or late, or unkempt, or if
a package is left out in the rain or ends up in the bushes,
chances are good a customer will take out their dissatisfaction
on the retailer – and not necessarily with the delivery company.
Handled correctly though, last mile service can be an important
part of a positive customer experience, and a competitive
differentiator. Not surprisingly though, effective last mile
service begins with the choice of a qualified logistics provider.
A few things to keep in mind include:
• Ensure adequate resources. Choose a logistics
provider with resources to manage the delivery
process, from start to finish. A top-quality provider will
have access to a distribution network that will ensure
efficient and seamless delivery – to anywhere in the
United States or even Canada. This means a shipment
will travel on the logistics provider’s vehicles, under the
control of its drivers, for the entire trip. This matters
for several reasons:
• Customers will be assured of uninterrupted visibility/
tracking capability
• Reduced risk of damage
• Documented chain of custody to minimize theft/loss
Going the Extra Mile for an Enhanced Customer Experience

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• Ability for local driver to communicate with regional
dispatcher should unexpected delay occur
• Greater accountability
• Local expertise will ensure deliveries arrive on time, and
if applicable, that drivers speak local language and are
familiar with roads and potential hazards.
• Consistency of service since all deliveries will be
made either in recognizable vehicles, or by employees
wearing logistics provider’s uniform.
• Innovative use of technology. Technology enables
tremendous efficiency in last mile service.
A logistics provider with an integrated transportation
management system will have full visibility into its
entire operation. This insight will allow real time
access to shipment location, and proactive scheduling
efficiency. If road construction causes a traffic
delay, for example, a driver will be provided an
alternative route, thereby minimizing the risk of a
delivery delay. In addition, a business will be able to
see precisely where inventory is located, and schedule
transit to a warehouse or retail outlet. Technology also
enables high levels of communication with customers.
This includes:
• Confirmation to a consumer when a delivery is made,
including information about where specifically a
package was left.
• Should a package become damaged while enroute, a
consumer can be given advance notification, and the
option to either wait for a replacement or accept the
original shipment, but at a reduced price.
• Interaction with consumers so that changes can be
made with regard to delivery date or location
• Ability to capture important performance data.
A business can gain meaningful insight with regard
to on-time deliveries, customer feedback, damage
claims and any number of additional metrics.
• Shipping options. Last mile service will also be
affected by the type of shipments to be delivered.
Small parcels will naturally be handled differently than
deliveries of major appliances. But regardless of a
shipment’s contents, last mile service priorities must
include customer service, flawless execution and on-
time service.
“Any supply chain is only as strong as its weakest link,”
Rick Rover, senior vice president of operations for an Atlanta-
based shipping company told Inbound Logistics. “A company
can move a product from China to the United States, clear
it through Customs, move it to a distribution center, and
fulfill it in record time. But if it doesn’t deliver the product
to consumers quickly enough, they are not happy, and the
company’s supply chain has failed.”
“A company can move a product
from China to the United States,
clear it through Customs, move it
to a distribution center, and fulfill
it in record time. But if it doesn’t
deliver the product to consumers
quickly enough, they are not
happy, and the company’s supply
chain has failed.”
Source: Rick Rover, as quoted in Inbound Logistics

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Looking Forward, Last Mile will
be Increasingly Personalized
Looking ahead, as customer expectations escalate for greater
efficiency and convenience, last mile will become even more
important to the customer experience. In a presentation to
delivery company executives, Ed Van Buren and En Panzarella
of Deloitte Consulting noted: “Last mile innovation can provide
value and distinguish a business, helping companies meet and
exceed customer needs.”
The two analysts described what is likely to be a last mile
logistics scenario of the future, by detailing a fictional shipping
company, USAship and its ability to meet consumer needs:
• USAship, the shipper of the future, offers:
• Rapid cross-country speed
• Same-day intra-city delivery
• Personalized instructions
• Rachel orders a crate of wine online
from her favorite vineyard
• USAship:
• Picks up the crate from the vineyard
• Alerts Rachel to a special on brie cheese
at her local grocery store
• USAship then:
• Flies the wine crate to the east coast
• Picks up Rachel’s brie from her grocery store
• Sends Rachel a custom recipe to pair with
her wine and cheese
• USAship contacts Rachel to schedule an exact delivery
time later that day
• Rachel arrives home at 6pm, and USAship’s carrier
delivers her wine and cheese at 6:15pm
• USAship is proactive and tweets @rachel, and then
transmits her positive feedback to the e-tailer
Clearly then, last mile capability must be a key consideration.
And given the increasing demand for innovation and efficiency,
a business must be certain its logistics provider will raise
customers’ appreciation of a retailer, increasing the likelihood
of retention and loyalty.

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Traditionally regarded as a “necessary evil” by most retailers,
today an efficient returns management process can be a
tremendous touch point with customers. JDA Software Group
research found “a shocking 88 percent” of survey respondents
cited “ease of returns” as an important factor in selecting a
retailer. And to drill down further:
• 62 percent expressed frustration at having to pay to
return an item
• 31 percent were frustrated at having to return items
through the mail or a carrier
• 28 percent were frustrated at not being able to return
an item to a local store.
Certain retailers – Zappos.com and Amazon – have raised
the bar in terms of customer friendly returns policies. Zappos,
which offers free shipping for both sales and returns, and will
accept returns for up to one year from date of purchase –
says that customers with the highest return rate are also its
most loyal, and highest spenders. Further, the National Retail
Federation reports that nearly half of retailers now offer free
shipping, which represents a dramatic shift in retailer thinking.
While free shipping is certainly important to a customer-
focused returns policy, so are a number of other factors
including:
• Seamless Resolution. Once your customer returns
a product, what happens next? If the product is
undamaged, it can be returned to inventory, but what
is the process for that, and how will your customer be
credited for the return? Does the item need to sent
out for a repair and returned to the customer? Is it
under warranty? Can the product be refurbished and
possibly sold on a secondary market such as eBay, or
an outlet store? And most important, who is going to
manage this process? Many businesses simply do not
have the resources to take on the significant task of
returns management, and entrust this specialized skill
to an experienced logistics partner.
• Centralized Returns Centers. Where exactly do
you want your returns delivered? A growing trend
is to process returns at a dedicated returns center,
rather than via a traditional distribution center. For
one thing, most distribution centers are geared
toward outbound shipments, rather than processing
individualized returns. A dedicated returns center
allows businesses to focus resources and build best
practices. And, problems associated with multiple
retailers or consumers individually returning goods can
be averted. In fact, having a dedicated return center in
place can be as much as 20 times more efficient than
having multiple processing points.
• Integrated Returns Material Authorization
(RMA). Through the RMA process, a customer must
contact your business, either through an 800-number
or a website, to notify you of their intention to return a
Returns Management
Returns Management

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product, and receive a RMA number that will serve to
track their package through the returns process.
A returns authorization label can be preprinted and
sent to customers with the outbound shipment,
and the customer can fill in the RMA on that label.
Or, a web-based system can print a label after the
RMA number has been assigned. There are many
advantages to the RMA process:
• Pre-printed labels ensure that returns are delivered
precisely where you want them to go;
• Pre-printed bar codes allow you to capture precise
information about the reason for return, and advance
notice of exactly what is being returned and when;
• RMA numbers allow employees to easily track returns
and serve as a reference point.
• Multi-Channel Visibility. The effect that your
returns process will have on customer satisfaction
cannot be overstated. Customers are demanding
that returns be handled quickly and with complete
visibility into the process. As stated previously, 88
percent of shoppers will not return to a retailer if the
returns process is not convenient. Allowing visibility
into the process can give customers direct information
about the process of their return, and some degree of
explanation should a delay occur. Some news is better
than no news!
• Web-based portals allow consumers 24/7 access to
information about their return. Key company systems
– finance, customer service, warehousing – could be
integrated to give customers updated progress reports.
• Carrier integration allows RMAs to be linked with
carrier tracking numbers, which can then be linked to
automatically generated notifications, or made available
on a web-based portal.
Returns Management
Returns Management

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The purpose of providing a superior customer experience,
is to build a group of customers who love doing business
with your company, who will be loyal, and who will sing the
company’s praises to friends and colleagues. Customer
service – listening and responding to customer concerns
while proactively finding ways to delight people – is of course
a critical component. But equally important is ensuring
that vendors and service partners share those same high
standards. Essentially, a business needs to enlist a logistics
partner that will treat its customers’ customers as if they
were its own, and will go out of its way to be helpful
“… a business needs to enlist a
logistics partner that will treat its
customers’ customers as if they
were its own, and will go out of its
way to be helpful….”
In its detailed thought leadership on the subject of “customer
experience,” consultants at Bain & Company noted:
“Customers evaluate each interaction in the context of the
ones that came before and compare it with their expectations
and alternatives.” A series of positive interactions builds
increasingly goodwill towards a company. But like a house of
cards, that goodwill can come crashing down after a single
negative interaction.
It’s vitally important then, to ensure that a logistics partner
shares this passion for customer service, and will go the
extra mile to ensure highly positive interactions with its
customers’ customers. Beyond ensuring that shipments
arrive on-time and undamaged, how exactly can a logistics
provider ensure a positive customer experience? There are
several things it could do:
• Consistency of experience. Bain notes the
importance of “delivering a great experience consistently,
with seamless integration across all touch points.”
This involves putting in place processes so that
“things work right every time and customers get the
feeling, ‘Wow, they’re really taking good care of me.’”
A customer should have confidence that its shipments
will arrive on time, as promised, every time.
• Flexibility. A logistics provider must be able to
accommodate last minute changes, and work with
customers when the unexpected happens. Good
customer service would take a “let’s make this happen”
approach to a last minute change, rather than the
“this is going to be impossible and is going to cost you”
approach a less-helpful provider would take.
• Proactive Communication. No one likes surprises,
especially when it’s bad news. Whether a shipment has
been damaged, or a weather-related event has gotten
in the way of a well-executed delivery plan, an efficient
provider will make the necessary adjustments, and then
notify the customer via email or text about the plan
adjustments. Good communication is also necessary
when deliveries are on a “normal” schedule. A consumer
who wants to pick up an online purchase in a retail store
for example, would certainly appreciate an email when
the order is ready for pick up.
• Human Interaction. When a customer needs real time
information about a shipment, there’s no better source
than a friendly, competent and informed customer
service agent. A dedicated logistics provider will have
a staff of qualified service representatives, who can
easily access a customer’s account information, answer
questions, and help resolve problems. Customers will
no longer tolerate being bounced from one uninformed
operator to another, excessive wait times or call centers
that keep “banker’s hours.”
• Value-added efficiencies. An innovative logistics
provider will go out of the way to find ways to add
efficiency or cut costs. A consumer with multiple
orders would save on shipping costs, for example,
if all items were consolidated into a single shipment.
A carrier may realize cost savings by using a courier,
rather than shipping via a freight solution.
This is especially for shipments that need to clear
an international border. For shipments destined
for Canada, an experienced logistics provider will
not only ensure full compliance with all customs
mandates and security regulations, but will take
advantage of opportunities to minimize customs
fees and duty obligations, and take advantage of
trade incentives.
Customer Service
Customer Service

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Conclusion
We’ve all heard the phrase “don’t shoot the messenger,” but
what if the messenger is actually a logistics company that fails
to deliver a package on time? The good news – at least for the
messenger – is that most customers will place blame for the
late delivery on the retailer, and not the delivery company.
A study by Voxware found 69 percent of respondents are much
less likely to shop with a retailer in the future if a purchase
arrives late. Why does the retailer get the blame for a delivery
company’s inefficiency?
Like it or not, customers perceive the delivery company
as an extension of the retailer. And for better or worse, the
performance of the delivery company is linked to the consumer’s
overall perception of the retailer. Businesses that have invested
considerable resources in creating an optimal customer
experience must take note: All their good work could be undone
by the poor performance of an inefficient logistics provider.
On the other hand, customer experience can be enhanced
via a highly qualified logistics provider that shares a retailer’s
objectives, and prioritizes efficiency and customer service.
Consumers are very much in the driver’s seat with regard to
setting expectations for their retail experiences. This includes
when and how deliveries will be made. And, expectations seem
to grow daily for more personalized interactions. A retailer can
distinguish itself by partnering with a logistics provider that is
in sync with today’s customer expectations, and is ahead of the
curve in offering innovative solutions.
Conclusion

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Purolator is the best-kept secret among leading U.S. companies who need reliable, efficient,
and cost-effective shipping to Canada. We deliver unsurpassed Canadian expertise because
of our Canadian roots, U.S. reach, and exclusive focus on cross-border shipping.
Every day, Purolator delivers more than 1,000,000 packages. With the largest dedicated air fleet
and ground network, including hybrid vehicles, and more guaranteed delivery points in Canada
than anyone else, we are part of the fifth largest postal organization in the world.
But size alone doesn’t make Purolator different. We also understand that the needs of no
two customers are the same. We can design the right mix of proprietary services that will
make your shipments to Canada hassle free at every point in the supply chain.
For more information:
Purolator International
1.888.511.4811
wedelivercanada@purolator.com
www.purolatorinternational.com
http://blog.purolatorinternational.com
Purolator. We deliver Canada.

15©
References
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