Working on the (Supply) Chain Gang

“For many companies, competing both online and at the mall can mean trading fat profit margins for more customers—at least for now,” reports The Wall Street Journal. “Fashion retailer DSW Inc. has given shoppers the option of placing online orders for out-of-stock items without leaving its stores. And, the chain is both fulfilling online orders and accepting returns at its growing number of locations.”

“The company is betting those efforts will pay off by increasing customer loyalty even though they aren’t adding to profits in the near term, said Roger Rawlins, who oversaw DSW’s omnichannel strategy before recently becoming CEO. He said customers who buy DSW products through multiple channels spend two or three times as much as those who shop exclusively in its stores or online only.”

“The strategy ‘ultimately allows you to grab additional market share, and then as we learn through using all these capabilities, we hopefully should be tweaking to be able to generate incremental profitability,’ Mr. Rawlins said.”

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Shipping Is Never Fast (or Cheap) Enough

The Wall Street Journal: “More than nine of 10 shoppers said they considered ‘same day,’ ‘next day’ and ‘two day’ delivery to be ‘fast,’ according to consulting firm Deloitte’s 2015 holiday survey of some 4,000 shoppers. At three to four days, only 63% called it ‘fast,’ and just 18% of shoppers considered five to seven days ‘fast’.”

“And customers for the most part are no longer willing to pay extra for expedited delivery. Shoppers on average said they would pay at most just $5.10 for same-day service, in the Deloitte survey. A quarter of shoppers said they wouldn’t expect to pay anything at all.”

However, absorbing the shipping may be worth it to some online retailers because it can reduce the return rate: “When you go to a store, you have that wonderful delight of carrying the bag down the street,” says David Maddocks, chief marketing officer of Cole Haan. “Online, after you click, you have to wait. And during that time you can fall out of love.”

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Going Mental At The Car Rental

Customers can have very different car-rental experiences at Payless and Budget even though both are owned and run by Avis Budget Group, according to The New York Times. David Segal, writing in the newspaper’s “Haggler” column, relays two high-contrast anecdotes. The first, involving Payless, is the story of a 50-minute wait and then driving off in a “filthy” car only after arm-twisting a supervisor to get any car at all.

Filing a complaint afterwards via Twitter yielded no response, an email resulted only in a bounced message, and an online service-desk inexplicably pronounced the issue “closed.” An apology was received and a full refund promised only because The Times intervened.

Meanwhile, a Budget customer who was given “a car smaller than the one he reserved” didn’t have to make a fuss or ask for anything. He simply described his bad experience in a routine customer-satisfaction survey. The next day, he received an email with an apology and promise of a refund check for the price difference. In other words: “One part of this company is taking care of consumers; the other is ignoring them. The secret to good service is no secret to the Avis Budget Group. It is just a secret that nobody bothered to share with Payless.”

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