ASK THE EXPERT - How to Improve Customer Retention in the Cold Chain
By: Mike Spindler, Co-Founder at Wellness Management Network
Since 2017, restaurant home deliveries have tripled in size, according to The McKinsey September 2021 article Ordering In: The Rapid Evolution of Food Delivery Brick Meets Click clocked a 7-fold increase in grocery pickup and delivery over pre-pandemic levels with at least half of American households ordering monthly or more often. Now, fueled largely by pandemic lockdowns, meals and ingredients are increasingly delivered to your door or shopped, bagged and loaded into your car. Neither of these studies measures direct-to-consumer meal kits, ready-to-eat meals, or a wide variety of perishable products, all of which have mushroomed. All these channels are expected to continue to grow rapidly at the expense of traditional channels such as taking a trip to the supermarket without assistance.
During this rapid shift to consumer delivery and the uptick of home delivery companies, the competition to gain repeat customers is quite the challenge. In order to develop this kind of loyalty, it is crucial to go above and beyond to create the best experience and product possible.
With a great deal of experience shipping very perishable products direct to consumers in several companies, I have learned that growth and retention are entirely dependent on managing and meeting customer expectations on every order. Envision your customer opening each box and the subsequent customer experience until consumption. We secured the very best perishable product and then tried to program its journey so that it arrived predictably, in a pristine condition. Not an easy job! In direct-to-consumer deliveries, the product is out of our control as soon as it leaves our shipping dock.
There are two important results:
1. Delivering the product at a temperature that would result in the best “sense” of touch, smell, and above all taste.
2. Delivering a package environment that inspires customer confidence in the product, avoiding excess moisture, warm package interiors, torn packaging, etc.
Product quality (freshness, surface integrity, taste), packaging, coolant and delivery service level all impact the customer’s experience. Numerous combinations of packaging, coolant, and product were tested to arrive at the best potential solution for delivery regardless of location and time of year.
One of the key concerns is product safety. Recently, I reviewed the nearby North Carolina State University study summary, completed on twelve Meal Kit and Direct to Consumer companies, revealing that 76% of all such deliveries arrived at the consumer's home with the product above the "safe temperature" recommendations from the USDA/FDA.
Product safety, such as a fast, easy-to-use web and mobile toolset are table stakes. The customer expects them. This study reveals that there is much to be done in claiming clear, sustainable leadership in this area to corral that burgeoning demand.
Consistently delivering the product at its peak quality is the most important aspect of customer growth and retention. Clearly, there is plenty of opportunity for packaging designers, process and equipment providers, coolant innovators, courier services and relevant feedback loop technology providers to improve performance and take over leadership.
The winners, those companies who manage to this end, will win consumer loyalty and see their retention climb.
Mike Spindler is an innovator and business builder for B2B and D2C information-based services and products. He focuses on the collection, distribution and use of product data for a competitive advantage using consumer and market data for application development and digital FMCG businesses.
Mike was a founder of efficient market services, Inc., the first demand-sensing information company; a founder, board member and president of MyWebGrocer from inception to profitability, CEO and board member of Gladson Interactive; founder of ShelfSnap, a merchandising audit service utilizing image recognition and spatial analytic engines to drive in-store merchandising results. Most recently, Mike held the CEO position at FultonFishMarket.com where he lead the creation and development of the largest online fish and seafood distribution in the U.S.
Growth and retention are entirely dependent on managing and meeting customer expectations on every order. Consistently delivering the product at its peak quality will create customer loyalty.
1. Product quality (freshness, surface integrity, taste)
4. Delivery Service Level
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