Dear Supply Chain: Consumers Want Love, Not Logistics

Forbes

5 days ago

Shekar Natarajan is the founder and CEO of Orchestro.AI.
If you've ever ordered a package online only for it to end up lost, you know how frustrating the experience is. You're left wondering where your package disappeared to, and when you contact the company, the best answer they might be able to give you is, 'We sincerely apologize for the inconvenience. We're actively investigating your missing package by tracking it through our system and coordinating with our shipping carrier. Please wait until the end of the week to see if the package arrives.'
So, you wait until the end of the week. The package seems to have disappeared into the ether. You contact the company again and push for a reshipment or refund.
Lost packages are one of the many examples of poor customer experiences resulting from the siloed, reactive and disconnected state of supply chains. Wrong packages being delivered and package tracking issues are other examples of poor customer experiences. These issues already leave a bad impression on customers, but they're often magnified, I've observed, by poor, inconsistent, impersonal customer service.
The mistake I believe many supply chain leaders make is thinking that logistics alone will improve the lives of their customers—that as long as the right package is delivered to a customer within the correct time period, then everything is fine. But these days, consumers arguably want love in the form of personalized customer experiences, not merely logistics. By leveraging AI, supply chain leaders can personalize the customer experience.
Why Many Supply Chains Still Haven't Caught Up To Consumer-Centric Thinking
From my observations, many supply chains are still behind when it comes to customer-centric thinking, and in my view, that lag stems from the business-to-business (B2B) origins of the supply chain world.
Before Amazon entered the scene, many of the stakeholders in the supply chain world were primarily geared toward serving other businesses, not individual consumers. FedEx, UPS and DHL, for instance, originated as B2B companies.
In the B2B supply chain world, unit economics and efficiency are king. And part of driving down unit economics? Offering standardized services, including a one-size-fits-all approach to the customer service experience. This tends to work well in B2B contexts but less so in business-to-consumer (B2C) ones. For instance, when a business reports a missing package, it expects to work through standard channels to resolve the issue, such as filing claims and waiting for an investigation. However, when a consumer reports a missing package, they typically want an immediate response and a faster resolution.
Research has shown just how much a good customer experience matters. A 2022 survey of 1,000 Americans by omnichannel solutions provider Mitto found the following: 'In the past year, 80% of respondents said they experienced at least one delivery delay. A majority (55%) of consumers have canceled a delayed shipment because of a bad customer experience. And when asked whether bad CX or a product delay is worse, over three-quarters (76%) of respondents indicated bad CX.'
How AI Can Help The Supply Chain World Move Toward B2Me
Today, many stakeholders in the supply chain industry have adapted their customer experiences and services to the B2C context. But the pace of change is fast, and I believe that a B2C approach to the customer experience no longer cuts it. To keep up with consumers' preferences, the supply chain world should take another big step—shift to a business-to-me (B2Me) mindset for crafting customer experiences.
B2Me is about personalization at scale. It's about catering to the unique needs of individual customers, rather than offering the same product or service to segments of customers over and over again. It's the difference between going to a tailor to get a custom-made outfit versus buying one off the rack at a department store, the difference between getting a stilted, rote customer service message and one that's specifically crafted to address your needs and concerns.
Achieving personalization has historically been easier said than done, because, overall, it's been a costly and friction-filled process. However, that's where AI can step in. AI can help supply chain leaders create personalized, predictive and proactive customer experiences. Specifically, leveraging AI, leaders can bridge the gap between their customers and their supply chain systems, thanks to real-time tracking, personalized communication and automated issue resolution.
For example, say you order a package from a company that uses AI to refine the customer experience. Your package gets lost. You go to the company's website and enter your tracking number. On the backend, the AI-powered technology can gather various data points, such as the carrier assigned to the package, geographic data and traffic conditions to determine what likely happened to your package.
The AI-powered solution can also highlight your purchasing history with the company—you happen to have a high customer lifetime value, having made 100 different purchases in the past two years. With that information, the AI-powered solution can begin investigating the issue with your package and working toward the correct resolution.
Simultaneously, through the AI-powered customer service interface, the company can send you an apology, acknowledge that it knows you're a long-time customer and offer you the option of either shipping you a new package or giving you store credit worth the value of the missing package. Moreover, it can adjust its communication style based on its inference of your preferences from past interactions. In turn, you, the customer, receive a more streamlined, friendlier experience that's likely to leave you with a good impression of the company.
How Companies Can Navigate The Risks AI Poses
AI, however, is not without its risks. Supply chain and other company leaders need to consider data privacy concerns, the potential for AI solutions to hallucinate and the possibility that their teams will misapply AI. Rather than viewing AI as an all-encompassing solution, supply chain and other company leaders need to carefully think through its limitations and risks and ensure they're in compliance with all applicable regulations.
Additionally, given that implementation is often expensive and time-consuming, it's important that supply chain and other company stakeholders carefully think about the problems they're trying to solve, rather than focusing on potential solutions. By doing so, leaders can evaluate potential vendors through the lens of those problems.
When I look at the world today, I'm seeing more and more factors become commoditized. I predict that in the future, companies will have little but their reputations to differentiate themselves on. And in a world where a brand can be destroyed with just one post online, it's vital that companies strengthen their reputations by offering consumers great experiences. Despite the risks that AI poses, I believe it stands to help positively change the customer experience in the supply chain world—and by extension, help companies strengthen their reputations.
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