Crippled with shipment delays and mountains of returns, brands are crumbling under an influx of inquiries — and losing customers along the way. Here’s how to turn it around.
NEW YORK, United States — Christmas came early this year for many fashion brands — and not in a good way.
In March, with the coronavirus spreading across the US and Europe, brands suddenly found themselves deluged with e-commerce orders, as millions of people turned to online shopping during lockdowns. It was the sort of rush typically seen during the run-up to the winter holidays. Only this time, companies hadn’t had months to prepare.
“All of a sudden, on a random Tuesday in March, the holidays came early,” said Heather Howard, senior vice president of people and operations at footwear startup Rothy’s. “The entire supply chain system in the US was put off guard.”
What happened next can only be described as a total customer service meltdown that overwhelmed big brands and small brands alike.
E-commerce orders went missing or shipped out weeks after the promised delivery date. Many consumers felt an added frustration when they were confronted with lengthy wait times to speak with representatives by phone or online chat. Tensions boiled over yet again when returns and refunds were left in limbo.
Corporate social media accounts still look like a battleground, months into the crisis. A few recent examples from Twitter:
Nike and Uniqlo did not respond to requests for comment. Everlane said delays were caused by supply chain disruptions during the pandemic, as well as an unprecedented volume of orders and returns.
Responding to the Crisis
Some customer service issues were inevitable as soon as the lockdowns began. Stores closed with little warning, as did some warehouses and factories. Consumer spending shifted in unpredictable ways; Rothy’s, for example, received a torrent of orders off of a special discount for first responders. Normally reliable delivery networks became snarled with orders for toilet paper, toys and other quarantine necessities. FedEx even capped the number of items retailers were allowed to ship in May.
“It was a total shock to the system,” said Donny Salazar, founder and chief executive of MasonHub, an LA-based logistics company. “No one is prepared to deal with the explosion of volume. It’s creating an erosion of service.”
Many brands made the problem worse by cutting their customer service teams just as the crisis was ramping up. In June, homegoods giant Bed Bath & Beyond laid off over 200 customer service agents at its call centre in Florida. In April, Everlane terminated most members of its customer experience team. (The group was in the middle of unionising. Everlane Chief Executive Michael Preysman said the layoffs were caused by Covid-19 pressures, and not because of the union.)
The cuts were often part of wider efforts to reduce spending as sales plunged during the pandemic. But this is one area where the long-term damage to a brand's reputation outweighs the savings, said Jon Picoult, founder of Watermark Consulting.
“You’ll save money on staffing, but there will be pronounced impact over time,” he said. “Some companies will try to downsize and bet customers will be willing to tolerate the pain, but they will only be tolerant for a point.”
Investing in Customer Service
Some fashion brands have added temporary customer service representatives. Others are assigning the job to store employees while their locations are closed, or having workers answering emails and complaints on social media in addition to other duties.
Chinatown Market, the Los Angeles-based streetwear company, recently hired six employees who switch off working in the company’s warehouse and moderating social media. The brand saw e-commerce revenue triple between February and May, with spikes coming from Instagram TV content, as well as partnerships with Lebron James and Mike Tyson.
“For brands with a social following, it’s a gift and a curse … fans go straight to the comments section and air out their issues,” said Dan Altmann, Chinatown Market’s president. “As we’re scaling, we’re trying to make sure the comments aren’t constantly being flooded with complaints.”
Before the pandemic, the hair-care company Madison Reed had 35 customer service representatives, who handled an average of 700 customer inquiries a day. That figure spiked to over 4,500 in March. The company quickly moved employees from its closed “Color Bar” salons onto the service team, condensing a weeks-long training course into a single weekend.
Customer service can be outsourced, allowing brands to scale up when demand is heavy. But many companies prefer to operate their own teams to ensure shoppers speak with employees who know the brand inside and out.
Footwear company Aerosoles recently moved its customer experience team in-house. Chief Executive Alison Bergen said the decision came down to quality over quantity.
“With [third-party staffing] you could commit to responding in, say, two hours,” she said. “But we felt it was more on-brand to communicate with customers that we're a hands-on organisation ... It might take us two days now instead of two hours but we’ll take care of you.”
Brands today, Chinatown Market’s Altmann said, must see marketing, customer service and social media as one job.
“Your failures and missteps are out there, for everyone to see, so it’s all one piece that’s about dealing with the customer,” he said.
Hiring the right people is only the first step. Striking the right tone with customers is trickier. Many experts recommend full transparency, especially during a crisis when most consumers will understand why they’re experiencing delays.
“Consumers are more tolerant now because these are extenuating circumstances, but where things go wrong is when communication dies out,” said Natalie Berg, a retail analyst and founder of NBK Retail.
Rothy’s began placing a banner at the top of their website about a month ago that notifies customers about shipping delays. Chinatown Market has been posting shipping updates daily to Instagram, in addition to sending emails and responding to direct messages.
“We find it’s better to overcommunicate,” Altmann said.
When customers want to speak with someone, they need to know how long they’ll be waiting.
“It’s behavioural psychology: a known wait feels shorter than an unknown one,” Picoult said, adding that technology that allows representatives to call customers back should be standard at this point.
Berg also recommends brands be realistic about their supply chain, even if it means making difficult decisions like not taking more orders. Companies like T.J. Maxx and Victoria’s Secret both paused online shopping in March, during the peak of the pandemic due to logistical issues.
“You can’t fulfil an order and leave then a customer hanging,” Berg said. “That might leave lasting damage.”
Invest in Technology
The spike in e-commerce isn’t likely to subside anytime soon. That should motivate brands to invest in technology that automates certain interactions with customers.
“Brands need to be preparing themselves for the long haul,” Berg said.
FAQ pages should be updated regularly. Salazar said ticket management systems can tag and sort the top reasons customers are reaching out, helping companies identify their pain points. Rothy’s recently designated a member of its customer service team to track the frequency and nature of contacts, as well as what types of customers need help, said Nichole Cadwallader, Rothy’s director of customer experience.
Returns are a major driver of customer service issues, so making return labels easily available online can help reduce the need for a live interaction.
“You could cut labour in half just by having that automated,” Salazar said.
In recent weeks, Lululemon has been hit with a flood of customer complaints over delayed shipment and returns. "I'm still waiting for my money for returns that were sent back and received at the Sumner warehouse weeks ago... I'm really over this service and money hostage situation," one shopper recently commented on Facebook.
The fitness apparel giant increased capacity to handle customer questions and added a digital assistance component, where guests can make virtual appointments and questions about sizing and styles.
Picoult said brands should offer as much detail about the product as possible so that customers don’t have to make calls in the first place.
“The holy grail of better customer experience ... is to make sure they don’t place that call in the first place,” he said.