Thread by @zshanlon

#Commerce OPERATIONS thread from a technology perspective:

Agenda:
1)EDD
2) SLAs
3) Inventory picture
4) Returns
5) Refunds

1) EDD - The golden goose is giving an unique and accurate estimated delivery date for every customer based on their location. The problem - this is HARD.

There are solutions that can solve this in theory, like @narvarinc, but in reality no one does EDD exceptionally well because there are so many rules and edge cases to consider.

The experience is your first problem.
Q: How early in the buying process do you message EDD? PLP? PDP? Cart?
Q: How do you message a unique AND accurate location based EDD if the user isn't logged in?
A: You can't.

Best case scenario is that you have a default EDD that then improves once you get ship details BUT this negates the entire perceived value of EDD early in the funnel.

Sure there are zone based tables you can create but they are wrong about as often as they are right. I live in North Carolina and right now my IP is showing Atlanta because of my ISP.

This also gets more complicated when you have more than once potential fulfillment location.
Q: From which do you base your EDD?
A: It depends on the item and it's location...

The best EDD is one that is accurate.

It's best to manage expectations and simplify the process. Pick your furthest zone and message that EDD everywhere.

This also leads into #2 - SLAs.

2) SLAs - 3 day ground MUST be 3 days ground. Overnight MUST be overnight.

Expectations >> Speed...most of the time.

If you've messaged your worst, standard shipping EDD you have options to improve operations while hitting your SLAs.

Most of your customers will be in a faster delivery zone than what you messaged. You can do 1 of 2 things in this scenario:

1) Over deliver - get the package out and beat their expectations.
2) Prioritize - delay picking during high volume times b/c you don't need the full SLA

A word of caution - there are no perfect operations. Some people will be thrilled if you delivery a package early. Others will be upset b/c they were out of town.

Expectations >> Speed...most of the time.

During peak times, or when you have some disruption in operations, you NEED to auto-upgrade shipping methods to hit your EDD. It's expensive but meeting expectations is the foundation of a trusting relationship.

3) Inventory Picture - A complete inventory picture has 3 components:

1) Node level inventory (individual DCs or stores)
2) Network inventory (aggregate across all channels)
3) Safety stock (inventory intentionally removed to prevent oversell)

Q: How do you display availability online?
A: It depends on your omni-channel capabilities.

If you can ship from store, you should show NETWORK inventory. If not, web should only sell off of the DC node.

Q: How do you manage safety stock? I want to sell all my inventory.
A: Yes, you do, but you want to avoid overselling.

If you can ship from store:
SAFETY stock = NETWORK inventory - AVG inventory interval SKU volume

Translation: You should be getting a new inventory every 15-20min. If your fastest SKU sells X units in 15 minutes then Safety stock could >= network inventory. In this case the website should revert back to DC stock only.

Q: Why wouldn't you always show store node inventory online?
A: Because stores typically have low inventory and there is an operational lag between submit and store picking. It's common for a consumer to take the last one off the shelf and hold it before an associate can get it.

4) Returns - Make them easy.

The absolute BEST customer experience is when you print the return label and put it in the original box.

...but...a little friction in the returns process sometimes makes a consumer think twice. It also saves the brand a ton of money. Printing labels ain't cheap.

Once a return is created, make sure you message the customer.

Expectations >> most anything.

If you don't confirm the return AND the refund you'll create more for CSR work fielding calls and emails.

Depending on your industry and product set, you MAY be able to include confirmed returns in transit in your network level inventory.

If you have to clean, fold, inspect, repair, etc. upon receipt then the time that takes may prevent you from including returns in the inventory.

5) Refunds - They aren't free. Some brands will issue a refund at first scan. I love it.

But what if the consumer doesn't put all the return items in the box? You have to keep an auth on their credit cart until the return is verified which also costs.

On issues like these it's important to have a framework for evaluating the positive experience on the customer and that corresponding impact on the bottom line.

Is immediate refund a necessity for our brand?
Is it a differentiator? If so, how much?
Is it status quo?

DC returns process is almost as important as pick/pack for 3 reasons:

1) It's unsellable inventory
2) It could prevent issuing a credit memo (which @SecretCFO might not like if it means he can't have accurate EOQ numbers)
3) It impacts sales/promo cadence