In this special episode recorded live at LINK2022, we hear from a panel of experts discussing how changing consumer behaviors have impacted the retail supply chain.
Special Guests:
· Brian Bobigian, VP Supply Chain, Ulta Beauty
· Bill Best, VP Supply Chain, REI
· Carl Weaver, Senior Director Logistics, 7-11
· John Barbee, Partner, McKinsey & Co
· Chris Blickhan, VP Retail & eCommerce, DHL Supply Chain
*This episode was recorded live at a large conference. Please forgive the difference in usual audio quality.
In this special episode recorded live at LINK2022, we hear from a panel of experts discussing how changing consumer behaviors have impacted the retail supply chain.
Special Guests:
· Brian Bobigian, VP Supply Chain, Ulta Beauty
· Bill Best, VP Supply Chain, REI
· Carl Weaver, Senior Director Logistics, 7-11
· John Barbee, Partner, McKinsey & Co
· Chris Blickhan, VP Retail & eCommerce, DHL Supply Chain
*This episode was recorded live at a large conference. Please forgive the difference in usual audio quality.
Welcome to all business, no boundaries, a collection of supply chain stories by DHL supply chain, the north American leader in contract logistics. I'm your host will Haywood. This is a place for in-depth discussions on the supply chain challenges keeping you up at night. We're breaking beyond the boundaries that are limiting your supply chain. This special episode was recorded. Live at link 2022, featuring a panel discussion on how faster shipping, accurate tracking, flexible delivery options and a seamless returns process can help reach stand out in the digital crowd. Let's dive in.
Speaker 2:Okay. We had a video plan to roll there, but, uh, unfortunately we're having technical difficulties with that. So I'll get us kicked off. First of all, my name is Chris Blake, Ken with DHL supply chain. I'll be moderating, uh, this breakout session, and it's my pleasure to welcome you all to this session on next week. Next day, next hour, how to meet the ever increasing customer demands. Uh, this topic will be addressed by four panelists, as you can see, uh, joining me on stage here. We have Brian Bobin vice president of supply chain from T beauty as well as bill best vice president of supply chain with REI. Also Carl Weaver, senior director of logistics at seven 11 and John Barbie partner at McKinzie and company. Please join me in welcome me these four panels. So in this session, you're gonna hear this group discuss their insights and approach in the supply chain. Plus, they'll talk about the actions that they're taking to address the rapidly shifting expectations that consumers have of the supply chain. And what an exciting time is. You heard some of our opening remarks. It is for us in the supply chain industry today. I can remember just two nights ago I was out to dinner and someone at that dinner who has no familiarity with supply chain asked me, Chris you're you're in supply chain. Right? And I was like, yeah, yeah, I work with DHL. And, uh, she just looks right at me. She says or asks, so when are you guys gonna fix all these supply chain issues? And I sort of chuckled, you know, like, oh, that that's, that's a funny question. No, she was serious. She waited for the answer and I said, okay, supply chains. And then that started a topic and she wish she'd never asked question, but it just goes to show that is on the top of everyone's mind. So of course digital commerce continues to climb as the preeminent shopping platform, uh, for consumers nearly 150 million people shopped online for the first time as a result of the pandemic. Uh, that may be a stat that you've seen before, but, uh, I think it's worth showing as a setup for this topic and because of their experience, there are now 90 million more active digital buyers versus 2020. That's an active population that is now enjoying the features and benefits and convenience that comes from digital shopping. The retail industry also saw a staggering 78% increase in over all returns. That is worth 761 billion in retail sales, according to the national retail Federation. And these trends are only compounded by how mainstream the subject of supply chain has become for all of us as I witnessed in my dinner a couple of nights ago. So again, it's well timed, uh, that we are all all here together and let's get started by hearing from each of our panelists. And as you listen to their stories, don't hesitate to take some time and open up the app and use the app to register any questions that you might have as, as you listen to each of our panels to talk about their supply chain strategies and actions that they're taking to address you ever change in consumer demands. So with that, let's get started with Brian Bob again, vice president of supply chain at T beauty. Brian,
Speaker 3:Thanks Chris. Everybody hear me? Mike work. All right. Thanks for coming out today. Talk about supply chain. Um, as Chris said, I'm Brian Bob. Again, I lead our supply chain strategy for Ulta beauty and gonna share a little bit about what we're doing at Alta to adapt to the ever-changing customer needs from a demand standpoint. So when we think about our supply chain, we've, we've really undertaken an effort to understand what's going on in the industry. I'm not gonna drain the slide on what's going on out there. You're all are aware. We've connected that with our Alta beauty strategic priorities and what we trying to do as a company to come up with a strategy that's focused on being agile and nimble, but really in three key pillars. When we think about it and it's focused on our network, innovation and technology, and then capabilities and processes as we move forward. And so from a network standpoint, it's really about getting the right product to the right place at the right time. And so to do that, we've got four different types of nodes that we think about from a ultra supply chain. We have our RDCs or regional distribution centers that are kind of just our historic omnichannel DCS out there. We have our fast fulfillment centers. Our e-commerce only we have our stores, which are a huge part of our overall strategy. And then we have our new addition of what we're calling a market fulfillment center, but it's an omnichannel DC see a little bit smaller, closer to guests to help deliver on speed and service to our stores. And e-commerce customers from an innovation and technology standpoint. We're looking at upgrading our systems. How do we make our processes in the buildings faster, you know, decrease cycle time, improve efficiencies, reduce reliance on labor, all those things in order to deliver better experience in our buildings that in turn translates to a better experience for our guests. And then from a capabilities and processes standpoint, we're really focused on a lot, but one of the big ones is end to invisibility. I think all the, the supply chain issues of really put the, the importance of visibility front and center for all of us looking at capacity, how we're flowing inventory, how are we, we looking at that differently than we have in the past. And then finally, how are we working with our partners up and downstream to be drive efficiencies that are mutually beneficial for all of us in order to make our supply chain and their supply chains more effective and ultimately deliver on the guest experience. So with that, I'll turn it over to bill. Talk about REI.
Speaker 4:Thanks, Brian. Um, I'm gonna give you a little bit of information about REI first off. We're just shy of 4 billion. We continue to grow we're specialty retail. So the depth of our inventory in our stores has a little bit different profile, uh, days of supply enough of supply. We don't handle cases. We handle a lot of eaches. So some of our investments look a little bit different than others might look, but the challenges are very similar to what Brian's outlined as well. Um, expanding the network, getting closer to the customer all, um, point back to this, how do we enable speed through access to inventory? What, what is different a little bit about us as well is that most of our profits go back to our members and our employees, and as easily, most easily described as profit sharing, what has the last couple years looked like for us? Um, not very much different than what many of you have experienced. We had the tool sets for being able to give access to inventory for fulfillment from anywhere when we had inventory, CI stayed away from that old trying to be remarkable. Uh, but we've had to reimagine our network. We've had to think differently about how we've placed inventory. We've had to think D about what are the investments we're gonna make so that we could be both efficient and give customers and our members choice as our business went from 27% digital to 67% digital last year, uh, making investments in the physical infrastructure is something that is, you know, underway this year and we'll see it carry in and drive results as we move forward and give the customers choice in how we deliver today. So keep passing to Carl.
Speaker 5:Hey, good morning, everybody. My name's Carl Weaver, I'm the, uh, senior director of distribution with seven 11. And, and when you think about seven 11, you really think about convenience and speed. It is almost synonymous with convenience. You think convenience store, you think seven 11, they go, they go hand in hand. And, and really our, our model's pretty unique in retail cause we're a combination of a traditional retailer, a restaurant and a grocery store kind of all in one small box. And so what that's required us to do is build a network out that allows us to quickly replenish to our stores on a nightly basis so that they can turn inventory. They don't, they don't really have space in their stores for a lot of back stock, a lot of inventory. So we've always had to be fast in how we replenish stores, but we've seen a couple of changes over the last, um, couple of years that have really caused us to think about convenience a little bit differently. Um, the first one is, is COVID. So we have leveraged our fresh food network, which traditionally was delivering donuts and sandwiches. We saw demand on those items, go down during the pandemic, as more people are staying home, but we saw an increase in demand for masks and hand sanitizer and toilet paper and the, that you don't really think about seven 11 for we're able to pull those items into our food distribution centers and replenish them daily as opposed to twice a week, which is what we had traditionally done on slow removing for us products like that. Um, the other thing that's been a huge change for seven 11, uh, in this time is a lot more, um, the home delivery. So we invested before the pandemic in our own seven app, which is a way to order seven 11 products and get them delivered to your house. But it really wasn't getting a ton of traction until the pandemic hit and it exclusively grew over the last couple of years and has become a big part of our retail strategy is fulfilling orders from the customer. We can get it to'em in 30 minutes and almost anywhere in the United States, which is a great advantage us with all the physical locations. We can do a quick replenishment to houses and we partner with companies like DoorDash, where we are a fillin retailer on a lot of orders. So if you order a, you know, big Mac from McDonald's it'll, it'll ping you in DoorDash and say, Hey, do you want some toilet paper or you, or do you want a six pack of beer from seven 11? We're passing by there on the way? Well, during the pandemic, it was probably a 12 a beer, but you know, some, some beer, um, to, to add your order, um, as a, as a fill in. So that's really changed the way we think about convenience, the way we think about speed, which I think is interesting, cuz that's always been a part of our core, but even for us, we're having to challenge what does convenience mean and, and adjust our supply chain accordingly. So with that, if you have any questions, I'd love to answer'em at the end, but I'll pass it over to John to talk a little bit about what's going on, uh, with retailers in general. Yeah. Okay.
Speaker 6:So when I think about the last 24 months, what really impresses me is the pace of innovation in retail. Uh, if we think about how fast retailers stood up curbside buy and line pickup in store to respond to the consumer, as many consumers, you know, started to penetrate categories like gross tree food and beverage that typically were, uh, less penetrated than other categories, pre pre pandemic, you know, retailers have fundamentally changed kind of their operating ethos. They've moved faster, they've innovated faster. They've made decisions faster to respond, to changing consumer demand. And I think consumers, you know, I think of it as liquid at expectations as they, you know, experience, you know, Carl's instant delivery, 15 and 30 minutes versus, you know, maybe two day, three day delivery. You know, their expectations for retail and commerce has started to converge of what they expect. We find in our, our research roughly 90% of consumers, you know, expect two to three days shipping as kind of the standard, you know, shipping speed for, for most retailers. When we look at, you know, how retailers thinking about responding, you know, McKinsey did and in conjunction with RLA some research on current supply chains, most our supply chains aren't necessarily equipped for that kind of pace. And so that raises the question, how do we bend the cost curve? And, um, another marker of innovation when I reflect on the past 24 months is the continued influx of capital in the startup ecosystem. We now have a herd of unicorns or logistics, startups, particular, the last mile space and aggregation space warehouse and automation and visibility as well, which has been enabling kind of that end to end capability. As we think about, you know, offering, you know, greater speed and conveniences to customers. And at the end of the day, the customers still values kind of three core things. It's the availability of product when they want. We find, you know, quite often, roughly 60% of the time, if a consumer doesn't find what they want on a retailer's website, they'll shop elsewhere or you'll lose that sale. For instance, they want convenience, convenience is measured, any number of ways it's speed. It could be Buyline pickup in store, which we've found a greater uptick, roughly two to two and a half times greater than through COVID. It could be sustainable options. You know, often what I like about sustainability is often the sustainable choice is the, uh, the economical choice, the good business decision. Anyway, uh, so for instance, if you offer a credit to consumers for shipping at a slower pace or consolidating, uh, shipment, you allow them to participate and you your sustainable mission, um, and that might resonate with'em as well. Of course, they also value, you know, easy or seamless return policy. So thinking about, you know, the importance of brick and mortar or your partners and your ecosystems, as you think about what is the network of the future, maybe I'll, I'll wrap it up, you know, as we think about a lot of these changes for sailors, you know, a lot of them are thinking about how do we bend the cost curve for eCommerce is roughly 12 to 20% of, of sales online. You know, take that as a guideline, some are more, some or less grocery can be, you know, in excess of 30%, for instance. And as we think about the networks that got us here today, as this slide kind of shows, they aren't necessarily the networks that will get us there tomorrow. So we have to fundamentally rethink kind of the, the retail distribution models. We think about the future of commerce.
Speaker 2:So we've heard from all four of our panelists here, we're gonna dive into now questions and we're gonna take the, the rest of the time that we have available, which is about 15 minutes in this breakout session for that, we have a number of questions that have come in over the apps. So really appreciate all of you who have submitted questions. Uh, we're gonna get started with one that I think all four of the panelists can address. How are you balancing the speed of delivery in context of the overall customer fulfillment value proposition? Bit of a heady question, I think who wants to go at it first?
Speaker 7:I'll jump in here. It's
Speaker 8:Choice. It's not imposing speed or facility it's giving the customer the choice, letting them control their experience. We did a studies and the studies and customer insights came back and said, it's an end statement. It's not an, or it's not a trade off. We expect both. Okay. Um, the other piece that we did was a project. We called promise what you deliver. So we were understating our delivery promise. Uh, so we started studying in different markets. What it meant if we got more specific about what the actual carrier performed was, what our actual performance was through our fulfillment centers. And it drove uplift to sales. Now that's powerful, right? You want, you wanna be able to help support the, the top line? So it's kind of all of the above, but for us it meant customer choice promise, make sure your promise is accurate, be reliable and make sure that you've given the options and controlling the experience to the customer.
Speaker 2:Very interesting. Thanks bill. Anybody else?
Speaker 5:Yeah, just very passionate about speed. No, uh, speed has always been a part of what seven 11 does and we've been fortunate so far. Customers do value that and are willing to pay for it. You know, we're sort of playing in a different space with speed. We're not talking about two day shipping versus one day shipping. We're talking about, am I gonna get in my car, having go pick it up right now or deliver it to me in 30 minutes? And that 30 minute customer is willing to pay for it today. Now I don't know what the world looks like five or 10 minutes, if that becomes the new expectation, like one day shipping is the expectation. Now I think that will, uh, be difficult for us to manage, cuz it is expensive to deliver in 30 minutes, but so far, um, the customers who value that extreme amount of speed and convenience have been willing to pay for it in a way that, that makes sense.
Speaker 6:Maybe one last thing to, to add here. And this is now powerful to Bill's point on choice. I think that's important. And, and one thing that, that we've recognized in our research with, with other retail clients is make sure where you do implement speed. You get credit for that and ways to figure out how you get credit for that by credit, by the way, I mean, conversion online is, you know, can you do AB testing with what you offer fulfillment? You know, we've worked with a number of retailers that, you know, discovered in certain markets around the us and there's roughly 20 or 30 key cities. You know, they actually drive greater conversion for their retail sales where they offer, you know, better speed. So kind of the takeaway here is being segmented on kind of how you think about, you know, deploying your, and certainly how you deploy your capital as you build, you know, networks of the future. So just thought, you know, that'd be another interesting way to think about that.
Speaker 9:Awesome.
Speaker 3:Yeah. And not much more to add these guys covered it well, but it's definitely not a one size fits all solution, right. To meet the guests where they want leverage all of your opportunities, whether it's Bo curbside, same day delivery shipping from a DC, but just meet the guests and, and do what you say you're gonna do. Right. Bill it's, it's live up to what you're saying and take credit for it.
Speaker 2:Very good. Okay. The next question that's popping up and rising to the top of the list quickly has to do with returns and the question, and this is another one I think for all on the panel, where do you feel consumers' minds are regarding returns and some of the, you know, topics of interest here are policies around returns, procedures for handling and processing returns. You know, so, so if you guys could comment on that question, that'd be great.
Speaker 6:I got the look. So I'll start. We do consumer insight studies quite a bit, especially as we think about, you know, the future of networks. And we, we often find returns are one of the top three fulfillment capabilities. When you think about, you know, how can you create distinctive, you know, online fulfillment, uh, competitive advantages returns is more often than not one of those factors that will kind of make or break the sale. So having clear return policies, I'm, I'm purposefully avoiding the word, you know, free either there's instances where, you know, there could be economic trade offs. When you think about those policies, this is where I think stores, you know, play an important role. This is where I think, you know, thinking about ecosystem players are also important, you know, returns that can go to, um, maybe non-traditional partner, physical formats or returns that we often find. There's a lot of innovation in analytics. There's generally three key use cases here on returns. Uh, we could talk more about that in a moment. So how can in a shape where a customer returns back, you know, thinking about the network, what's convenience for them up to and including keep the product, because you're thinking about the margin and the cost of kind of flowing that good back to your network. There's making better decisions in the four walls of the warehouse. When you think about, you know, who the key decision makers are, if you kind of scrap return, stock refurbish, et cetera. And we get away from Excel spreadsheets and start thinking about, you know, the margin of the product, the cost in, in the, in the value chain to recoup value. And then there's kind of, you know, getting the, the insight to improve kind of the front end analytics, you know, are, are the apparel products, you know, fitting tighter? Do we need to just the size, are we describing the cut accurately, so on and so forth? So those are some of the areas that we see retailers and, and some of the startup companies investing in to help solve, you know, returns. But invariably every time we do the consumer research, it's typically a top three factor for why I choose to buy it a retailer.
Speaker 8:All right. I'll jump in here with a couple of comments as well. I think first off you have to recognize that there's tension in the decision about how you want to handle returns. And let me explain, um, if I say free returns and you mail everything in, I may forfeit some opportunity for in-store experiences. So how do I wanna balance that? And you have to be very intentional about that. 90% of our returns come back through our store. We're hopeful that we see an exchange, a reinvestment of whatever was on their credit card, et cetera. But what is also true is from a customer's perspective, they got free shipping to them. They want it free back to send it back back. And the other thing that's true is they want their money back. So on the retailer side of it, our challenge is what's the disposition of that inventory. How quickly can I re inventory
Speaker 4:Those things that are still in season and get the best margin out of them, um, versus adding
Speaker 8:Things that may be damaged or otherwise
Speaker 4:The first portion of the time, getting that
Speaker 8:A stock back into inventory and turning it, but you know what? The customer doesn't care, they don't care about the inventory side of it. They want their money back. They want the convenience and
Speaker 4:You have to
Speaker 8:Acknowledge the tension when you develop your strategy.
Speaker 2:Uh, another question here to do with fulfillment, and this has risen to the top of the list. We now have nine people who are most interested in. So how do you leverage the market fulfillment centers versus ship from store concept in your supply chains today?
Speaker 3:Great question. When we think about ship from store, our stores don't carry our full assortment Atul. They carry store only. And then we have extended aisle that is present in our distribution center, cha locations at this point in time. So we use our stores. We think of the market fulfillment centers from an eCommerce where they carry both eCommerce and store inventory. So we get closer the guest with our full assortment versus what we would have, which is to store only, but we also leverage it to deliver to our stores more rapidly. You know, right now our, we only have for regional distribution centers, it takes two to three days transit time. And for some cases to fulfill our stores, replenish things that are sold, whereas the market fulfillment centers within a day. And so you cut out lead time on the front end, get it to the stores so they can sell it. They can also sell it via the e-commerce channel and we can sell it via the market fulfillment center channel. So it's a lot more opportunities to take advantage of that and get to Metro hubs a lot faster than what we've been doing.
Speaker 5:Yeah. And as of now, all of our fulfillment directly to customers run through stores because we have so many of them and they're so close to customers, but we're actually exploring kind of the opposite of what most retailers have done, where they had distribution centers that went direct to customer. And then they started using their stores. We're actually starting to stand up small distribution centers. We're calling dark stores that are in metropolitan areas that are designed to deliver directly to customers, almost like a retailer without a retail presence to deliver food and other items in 30 minutes. So it's a little bit of a reverse story from what you've seen with our retailers. We're, we're building distribution centers now to get to that last mile where we had stores traditionally fulfilling.
Speaker 8:The only thing I'll throw in on top is don't underestimate the impact of any technical that you have in your ability to stand up additional locations. You have to have agility. Technically it's pretty easy to go out and find warehouse space, find somebody who's more than willing to do fulfillment on your behalf. Or if you're gonna stand up your own site, you have to be able to sort that location. And for us average skew, I mean, I, I can't put every skew, even my extended aisle in one site's. So you get into the idea of curated, the idea of micro fulfillment, the idea of understanding local and hyperlocal and the disaggregate of your total inventory to make sure that you can be relevant in the market where you make that inventory available.
Speaker 2:Right. All right. Thanks for all those, uh, responses. We've got another question that is coming in, and this one's for you. Carl, when you have a delivery window of 30 minutes, you need to have high inventory accuracy, particularly that's true at the stores to make sure that you can deliver to the promise. Right. So if you can maybe share your observation, some of your expert to around how seven 11 is handling that and maintaining that promise.
Speaker 5:Yeah. I mean, you, you definitely hit one of the big challenges nailing the head there. It, it is critical to have accurate inventory and candidly, it's probably the part of the program. We've struggled with the most, you know, we are a franchise network, so we have a lot of independent operators who running stores. So they own the inventory in those stores. We're relying on them to make sure they're keeping it accurate so that when, you know, someone goes to order an item and it says, it's in store 1 23, it's really in store 1 23. So, um, we've, we've really reinforced training with those stores on how to keep their inventory as accurate as possible doing cycle counts. Some of that old school stuff on a, on a daily basis to make sure it stays accurate in the system. We've also built a pretty robust replacement process into our ordering, um, application. So if you know, you order item X and it turns out item X isn't really in stock, you'll get a ping back five or 10 minutes later with how about item Y or would you rather us cancel it? So we know pretty quickly in a 30 minute, if we have an inventory impact and we communicate that back to the customer and, and try to make it as right as we can, but we are trying to make that be very small because it obviously creates a bad customer experience. If you want a specific, you know, item and you don't have it after you've already placed an order. So it's a challenge. We haven't solved it yet, but it's something we're, we're attacking pretty aggress every day.
Speaker 8:I'd just add in there that, uh, inventory visibility is foundational to deploying Omni capabilities. It applies to buy online pickup in store. The inventory visibility is the first piece. And then you can bring in distributed order management and make choices about inventory. Once you have that confidence,
Speaker 6:I'd like to now they've faced tough inventory positions, roughly 85% in stock rates where they try to be 95%, very different from a DC. And they've actually had to invest a lot into substitution transparency. They've had to make trade off choices on operations. Do we zone pick, do we discrete pick? And it comes with trade offs, but as you kind of look to adjacent industries like grocery and how they've handled that transparency, that substitution or convenience, if you will, in their operation, you know, that that could be instructive as you think about, um, future capability.
Speaker 2:Okay. Uh, one that was just recently added that really rose to the top of the list. Fast it's on a lot of people's minds is labor and labor constraints. And the question is how are you dealing with labor market and retention challenges while also working to support growth and support the increase in demand in your businesses?
Speaker 3:Yeah. I can speak a lot on that from a future standpoint and how we're thinking about it. I, I showed a lot of automation, right? We're looking at how do we change our processes to remove labor or to reduce the reliance on labor, but still have that high accuracy and get things out there. So that's one pillar of it. The other is putting systems in place that allow the job to be more simple and be more like a, a, a smartphone that they pick up. They already know how to do it. You eliminate the training and how do you just make it a lot more fun and easier for people to come into work so that you can anticipate how you're going to, you know, get people in that don't want to be there long term. And then really it's tapping in, and we're doing a lot of work, um, trying to tap into the gig labor and let people work when they, they wanna work versus saying, you need to be here five days a week for eight hours a day. How do we leverage that as well? And truly come at this from a lot of different angles to make it a better place to work, enable us to bring people a lot more effectively and efficient, and then do our reliance on labor.
Speaker 5:Yeah, I would say it's, it's sort of a short term and a medium long term question for us short term. We're, we're doing a lot of the same things you guys are probably doing. We've got retention bonuses, we're putting in place. We're, you know, we're trying to do incentives for people to stay on the job for X amount of time, as opposed to just raising wages across the board. That's worked better for us in terms of retaining talent. And especially as we went through the fourth quarter, when there was a lot of comp petition for talent, we, we spent a lot on retention and making sure we had specifically drivers, you saw on my slide, we, we make 14,000 deliveries every night and we have to have a driver on all those vehicles. So it's a lot of trucks on the road every night and having those in seat was critical. So we, we did make a short term investment, more long term. We're starting to look at more automation, kind of to the, to the point made earlier. And, and we're going back and looking at automation that probably didn't make sense two years ago because the economics weren't there. But as wages continue to go up, up, up, it starts to look like there might be an ROI there. So, um, I'm trying to, to reteach myself, not to say that won't work in our business because it didn't work three years ago. Maybe it works now and it didn't before. So man, that's, there's a lot of people who are gonna try to sell me stuff now that I just set that up on the stage. And I'm realizing that right now and regretting my decisions,
Speaker 8:It's important for us to be invested and engaged with our employees first and foremost. But, uh, that doesn't necessarily always lead to retention. We've made investments in pay. We've made investments in shift differentials. We've made investments in expanding our second third shifts because there was untapped capacity to deal with some of the bubble. We've also made significant in technology. You know, we did a facility in Arizona that was high tech. We're building a like facility, uh, outside of Nashville right now, but we're drawing from some of that technology and bringing it into our legacy facilities and retrofitting it, not so much to displace labor it's really about create, be the upside capacity for the future. So it it's, it's a combination of all of the above.
Speaker 2:Great. Thanks everybody. Okay. The next question is now kind of looking into the future and it's, it's dealing with speed delivery and, and what's next. And the question is, can you talk about past the need for speed? What's next for customer demands and some topics that are of interest here, visibility on shipments for consumers, different promise levels that you're offering that sort of thing
Speaker 3:And kick it off and you guys can pick it up from there, but I think absolutely right. Visibility's gonna be important giving the right contact points. So they know what's happening with the, their shipment. I do think sustainability come into play a lot more than it has, and people are gonna care a lot more about how sustainable the efforts are and how we can make trade offs, where we're not sacrificing services, but we are bringing in a lot more, you know, ability to what's actually going on and where their products come from and how recyclable is their packaging and all these things that, that we're talking about. Now, I just think are gonna continue to come to the forefront.
Speaker 8:I think, uh, I, I started my career at DHL and I think about all the milestones I could see when I was looking at shipment transactions and as a, as a retailer or as a consumer, that wouldn't help me. Right? So transparency, yes. More milestones, probably not milestones that were intuitive. Uh, and that really helped me understand whether the promise is gonna be met. I know I keep going there, but it's the reliability of the milestones that we're sharing, not necessarily adding six more to drive four more calls to the customer service center at$10 a call, right? You're, you're just, you're just driving up expense and you're not really satisfying the customer. So the reliability there and right, so we push hard into our carriers that we need you to be as reliable as we need to be on behalf of our customer, because that's where the partnership comes, comes to be. Uh, and then when that's not happening, I'm looking at my order management system and I'm pulling you back. I'm pulling the carrier back because you're not delivering to the promise. And until we start seeing, I don't know what the dryness is, uh, until we start seeing, um, improvement against the service, we've gotta meet that customer promise. We need you to meet your portion of it, uh, if you're a carrier, uh, so that we can succeed together and continue, continue to expand the partnership.
Speaker 2:Very true. All right. Thank you all. All right. One more question. This one has to do with eCommerce orders as they're to delivered and theft. And the question is about how in your businesses, are you dealing with theft in terms of policies that you're adopting, uh, in, in bus in terms of business and delivery, as well as your procedures for the delivery. And then finally, how you're handling customers claims on theft,
Speaker 3:Take a stab at this one. You know, when we think about theft and the deliveries, we don't control our last mile. So we're relying upon carriers. And so we take a lot of what they're saying, but ultimately, I mean, if a customer's calling in with the complaint or an order's not there, you know, we end up replacing the order and, and shipping it to it and doing the right thing and making sure that the customer's taking care of no matter what happened.
Speaker 8:So we watch a customer satisfaction and index and our customer service team shares that along with us. And, uh, it's rare that that is the top of the list of things that a customer might be concerned about. They're more likely to comment on, could you stop using this carrier because they never placed it on my porch. They threw it in the ditch, they did this, they did that. And I get that if you're on the carrier side of this equation going, yeah, we see a lot of that. That is the exception. We see that statistically, but we're trying to establish a relationship with these customers. And if we damage that relationship, they may not come back. They may try someone else. Uh, and they're attentive to who the exact carrier is. I get more feedback to that end than I do specifically about, Hey, a package theft happened because we have power within a package theft. I would look, we we'll go deal with the claim part of it. We need to make it easy for the customer. First job, take care of the customer, do the right thing for the customer. Be attentive to all of the customers. Um, feedback
Speaker 6:I had, one last thought is the delivery experience is the future of the customer experience. So bill, I really liked what you said about taking care of the customer there. And, you know, I live in Atlanta, it's a place known for porch piracy. So it's very real where I live. So as a consumer, I feel this, but what we also see, you know, happening, it's more so in, in Europe than it is in north America right now is, you know, delivery lockers or pickup locations. And of course, Amazon is, is doing this with whole food stores and we'll see other, you know, pilots, but as you think about the future of your network, particularly if, you know, you're delivering to like a Metro statistical area, that there's a lot of, you know, theft on delivery, you know, think about those partnerships that you offer. Those customers that give them alternatives, that, that are convenient for them. And we're starting to see more lockers and multi-tenant buildings for instance, uh, and the infrastructure is starting to get built out. So I think this goes back to when you think about conveniences and choice and, and making sure you are delivering a great delivery experience, you know, this is part of what us supply chain leaders will, will start thinking about as you shape the future of supply chain.
Speaker 5:Yeah. And, and the product mix we have is more of an immediate consumable. Typically it's not something that gets stolen off of porches, but kind of to, to John's point, we do have lockers in a, our stores. We do have some pickup that happens in store because people are concerned about that problem. So we have taken advantage of that problem. Although specifically our deliveries to, to consumers, we don't really see this cuz it's, I'm getting a pizza right now and you're at the door to get your pizza more so than it's being left on the porch for a long period of time. So kind of a different, different type of model.
Speaker 2:Okay. Okay. That's going to, uh, wrap us up. First of all, really appreciate all of you choosing, uh, this breakout session to, to join us with this is, uh, a topic that's very, uh, near and dear in that all the panelists here are very passionate about. Uh, second of all, uh, please extend a nice appreciation to all of our panelists. Thank
Speaker 6:You.
Speaker 2:And then lastly, now that we're done with the obsession, please do us all in favor and just open up the app. Take a moment to respond to the survey. Your feedback is very welcome and we do act on, on your feedback. So thank you all.
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