Monday, November 28, 2011

Why Woolworths Homeshop Needs a CRM (And Maybe You Do Too)

For those of you from foreign shores Australia, basically, has two supermarket chains (Woolworths and Coles). Both offer online shopping and delivery (for a charge). I use Woolworth’s Homeshop and while, in my experience, the range is a little more limited, the costs are a little higher and the quality a little inferior, relative to the the physical stores, the benefits of time saving and convenience outweigh the negatives.
All was fine until we moved house a few weeks ago when the problems began.


Late Deliveries

Woolworths provides customers a range of windows for delivery. One Monday we picked 6am-8am so that the delivery was part of the usual morning drama of getting the children and ourselves ready for work. 8am came and went and nothing turned up. My wife called and asked what had happened. She was told the bad weather and traffic had delayed the delivery and it would be there soon. At 8:10am it turned up. A minor delay and a little disappointing but these things happen. I wrote it off as an outlier.

Eight days later it was time for the next shop. Again we picked the ‘morning madness’ slot. 7:45am and nothing had arrived. My wife’s spider senses began tingling so she called Homeshop. She was assured the driver was on his way and would be there by 8am. 8am rocked around and still no groceries. My wife called again and was told the driver was running late and he would be there at 8:10am. Nothing at 8:10am and she called back. She was told the delivery was delayed and that is the way it is. An apology is apparently not part of the standard customer service.

If you imagine the Hispanic wife from Modern Family with an Australian accent, this is my wife. Respect is a big thing for her. No apology when groceries are late and a cold attitude is not the way to go with her. She was told the next delivery will be free and asked if there anything else that can be done. My wife asked to speak to the warehouse manager so she can give him some selected thoughts on improving his operations management. After all, she has knowledge of operations management from her time at a Fortune 100. The customer service operator refused and suggested she get her manager to call later. This was accepted. Unfortunately, the customer service operator failed to organise this call.

With two late deliveries, being generous, I put this down to a coincidence.

Eliminating the excuse of traffic, we decided to opt for a Sunday delivery. Sure enough, the clock chimes 8am and no delivery. My wife, again, puts in the call and receives an apology from the operator who assures her it should not happen. Next delivery will be free. My wife tells the operator she values her time more than a nominal delivery fee, suggesting she will give the business one more chance before moving to Coles.

The groceries turn up as she puts down the phone. Unfortunately, no checklist is provided and some foods have been substituted for cheaper alternatives (despite us ticking the box ‘no substitutes’ on the online order and no discount given for the inferior product).

Three in a row is now a pattern and suggests something systemic is involved.

Where Are The Problems And How Can A CRM System Help?

To see where the problems are, let us look at the steps in the process:
  1. Customer orders online and selects a delivery window
  2. Goods are selected from a warehouse and loaded into a truck
  3. Driver takes goods to home
  4. Goods arrive late and customer phones up customer service, receiving mixed service
Let us also summarize the issues experienced in the three deliveries:
  • Goods were consistently late, despite a two-hour window
  • Customer service did not know where the trucks were
  • Customer experience from the call centre was mixed
  • No reliable escalation process
  • Cheaper substitutes provided despite the order specifying not to
So how can a CRM system help?

Traditionally, CRM systems were about sales automation; helping sales people track sales opportunities and converting them to sales but, these days, they cover a much wider range of processes than just sales.

In the case of Woolworths, a good CRM system would link the online ordering system with the warehouse and the customer service centre. It would also allow for better management of the process of delivering excellent customer service. Let us review the specific issues.

Late Goods

This one is probably beyond a CRM system. Given the consistent inability to deliver on time to our new address, relative to our old address, I can only conclude Woolworths have a predefined route for the area and we now fall towards the end of that route.

Where a good CRM system could help would be in reporting on complaints received and determining the cause. It is likely others, nearby, also have the same experience as us and in the effective capture of these complaints and consolidation of reporting through a business intelligence (BI) system this issue could be identified and remedied through a review of the route or through the hiring of more drivers.

A cynic would suggest that Woolworths are willing to endure some level of dissatisfaction in order to maximize profits but I am sure this is not the case, given the high level of competition with Coles.

Customer Service Not Knowing Where The Trucks Are

In these days of ubiquitous GPS systems, it would be a relatively simple procedure to link a GPS tracking system with a CRM system via wireless internet, allowing the call centre to know where the trucks are at all times. Failing this, another option would be electronic signature for deliveries, similar to what is experienced with many courier companies (Homeshop still has a paper-based signature). The electronic signature would be transmitted back to the CRM system and the call centre, presented with an ordered list of deliveries, would be able to see where the truck is up to and estimate a delivery time (or the CRM system could estimate for them).

Mixed Call Centre Experience

There is little excuse in today’s world for an inconsistent call centre experience. Most CRM system provide a scripting facility and the ability to automate the process of servicing the customer. In my opinion, it is clear the Woolworths Homeshop call centre do not have access to standard procedures for dealing with common complaints and, unfortunately, have to improvise to the detriment of the customer.

No Reliable Escalation Process

It is often the case that call centres are geographically separate from management so it is not practical or possible for the call centre to escalate a call directly to a manager. Therefore, it is sometimes necessary for a call centre operator to request a customer be called back by management to deal with an issue more appropriately. Where the system breaks down is if there is not a simple system to action this escalation. Most CRM systems have a workflow engine, allowing the automation of activity as the system is used. In this case, the call centre operator could tick a box in a CRM system and the system would take care of the rest; contacting the most appropriate senior member of staff, based on the type of complaint. Even then, if the issue has not be addressed within a fixed time period, the system automatically escalates the issue further. Most call centres, meeting international standards, have such systems in place as well as well-defined service level agreements (SLAs).

Cheaper Substitutes Despite Instructions Otherwise

In this case there appears to be a breakdown between the online ordering system and the warehouse picking slip. Given substitution, when it does happen, appears to be a cheaper product, the same cynic from before would suggest there is a conscious decision, on behalf of Woolworths, to ‘try it on’ and occasionally slip in a cheaper product to improve profit but, as before, I doubt this is the case because the cost in customer satisfaction would massively outweigh any benefit in a few pennies extra profit.

If the picking slip from the warehouse was generated from the same CRM system as captured the online order, it would be a simple case of ensuring the ‘no substitutes’ option was displayed in large font on the generated picking slip.

Taking it a step further, let us assume a barcode reader is used for inventory management, scanning the items as they are removed from the warehouse to update the ERP system. If the CRM system presented an on-screen picking slip, rather than printed out, it would also be possible to link the scanner to the CRM system so that, when a substitute is picked for a ‘no substitutes’ order, the warehouse operator received a warning so they could fix the mistake or automatically generate a credit, email to the customer etc.


Ultimately, people implement CRM systems to improve communication, either internally or externally. In the case of Woolworths Homeshop there appears to be communication issues between the online ordering system, the warehouse, the delivery drivers and the call centre. A consolidated CRM system has the potential to address these issues, improve customer satisfaction and provide a competitive advantage. Let us hope Woolworths starts reviewing their process before our next order, otherwise we will be going to Coles.

The challenge for the rest of us is to look at our own businesses and consider whether we also have communication issues, which affect our ability to deliver excellent service, and consider how technology can be used to improve the situation.


OdEd said...

Judging by the responses from the Customer Service department, it would appear that the far bigger challenge is to engage the workforce, and implementing a CRM worth the name would highlight all those juicy User Adoption issues with a big flashlight.

Mattw said...

You must be joking Woolworth's spending money on software funny. What they really need is competent quality staff in stores to pick the goods correctly and on time. It would help if they contract a better transport company