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News Analysis 15 Sep 2021 - 7 min read

Australia Post CMO Amber Collins: e-comm, supply chain crunch needs intuitive CX before comms

By Paul McIntyre - Executive Editor

Amber Collins: "This is really now about managing the customer experience. Consumers are actually forgiving when they’re told what’s happening along the journey." Pic: Aaron Francis - The Australian

Last Saturday Australia Post’s “double vaxxed” CMO Amber Collins was in a Melbourne distribution hub from 7am for nine hours packing parcels for eager online shoppers. A perfect storm of Christmas trouble is looming for countless companies facing lockdowns, global supply chain crises and chronic pressure on their e-commerce delivery logistics. For some, the usual holiday abundance is likely to get ugly. 

What you need to know:

  • E-commerce faces a potential “breaking point” in November as red-lining consumer online demand collides with worldwide supply chain fractures, severe shipping line delays through to the March quarter and Covid’s local spread which is slashing workforce availability in logistics and retail distribution centres (DCs).
  • It’s the first real test of how digital transformation programs that have been compressed from five years to 18 months will hold-up.
  • Crowd sourced delivery firm Sherpa doubled its business in the last FY and doubled again in the 10 weeks to September doing same day deliveries for the likes of  Dan Murphy's, Chemist Warehouse, BWS and SMEs
  • Sherpa CEO Duncan Brett says the pressure at present is “extreme and painful”
  • Australia Post froze parcel collections from e-commerce players earlier this month for four days to clear a backlog. CMO Amber Collins says if Christmas came two weeks early last year, it’s four weeks early this year
  • Collins says infrastructure is at capacity for managing online customer demand.
  • Active customer experience management is an antidote to customer blowback, including better management of shopping carts linked to stock availability and delivery innovation like click and collect pop-ups
  • Digitas Chief Data Officer Maurice Riley says eight in ten 10 of its clients had rolled out customer data platforms but six in ten hadn’t used it to change how they interact with customers. 
  • Per Riley: “It seems like we're still on that train where they're buying, investing in technology and then it’s sitting in the corner and not actually getting used.”  

The e-commerce landscape has leapt ahead four years in four months in terms of penetration levels. Infrastructure is at capacity.

Amber Collins, CMO, Australia Post

Pressure “extreme and painful”

The consulting, tech and IT giants which have dominated the digital business transformation narrative over the past 18 months of Covid are about to get their first serious acid test.

These much-heralded transformation programs that have swelled the revenue lines for those in the technology and advisory sectors, are approaching high-risk status. 

Companies large and small have frantically and often gallantly compressed five years of systems and customer reengineering into 18 months of Covid-induced chaos. But the pressure is now palpable from an extraordinary confluence of Covid curveballs. 

“I’ve been in e-commerce for 20 years either as a retailer, an analyst or a consultant and I’ve never seen anything like this – the pressure out there is extreme, it’s really painful,” says Duncan Brett, CEO of crowd-sourced delivery service Sherpa, which doubled its business in the last financial year and doubled it again in the 10 weeks to September managing same-day deliveries for retail giants including Dan Murphy’s, BWS, Chemist Warehouse and hundreds of small and medium enterprises like Jack Singleton's Roses Only.

It seems like we're still on that train where they're buying, investing in technology and then it’s sitting in the corner and not actually getting used.

Maurice Riley, Chief Data Officer, Digitas

Breaking point for November

“That Christmas period is always a bit of a tsunami but you’ve got breaking points coming at the end of November and the start of December,” Brett fears.

His gig economy start-up now has 10,000 “Sherpas” ranging from retirees doing one delivery each day, through single mothers making deliveries around school hours, to pro drivers earning up to $2,500 a week. In July, Sherpa signed on 2,500 new drivers, four times the typical volume as the battle among delivery networks escalate. Brett says the pushback on Amazon’s typically prescriptive and tough 'Flex' driver system has been “helpful” for his company.    

“We had a lot of South East Asian and international students who went home through Covid," says Brett. ”The driver pool is shrinking and demand is increasing. It’s a massive, massive problem.” 

Now it's coming to a crunch: Red-lining consumer online demand is colliding with worldwide supply chain fractures as materials supply chokes, severe shipping line delays that stretch through to the March quarter and Covid’s local spread slashes workforce availability in logistics and retail distribution centres (DCs). That Christmas red line is coming early, says Brett, and just about all of e-commerce will feel the impact.

E-commerce shutdown

“One e-commerce company we’re aware of has completely shut its online store and isn’t taking orders because of demand,” says the head of a marketing services firm familiar with the situation. “They literally cannot fulfil demand. They're not advertising because they can't stimulate demand any further. They just can't take new orders.”

Australia Post is the one of the highest-profile casualties. It put an unprecedented three-day freeze on parcel post collections for e-commerce retailers on September 4 to clear its backlog. CMO Amber Collins says Australia Post is trying to hire 4,000 people while managing Covid’s spread through the current distribution centre workforce. But it’s also competing with other major retailers doing likewise. 

The punters clearly sense something.

Collins says Australia Post app downloads are up 90 per cent year-on- year, with customers notching up 4.5 million opens each week while website visits are up 30 per cent to 9.3 million weekly. Upwards of 30 per cent of Australia Post call centre volumes right now are from people checking their delivery status – before their parcels are even due to arrive in typical delivery windows.I

This is really now about managing the customer experience. Consumers are actually forgiving when they’re told what’s happening along the journey.

Amber Collins

Infrastructure, systems not keeping up

“It’s high risk,” says Collins. “We don’t need to tell Australia there’s delivery problems. The media is doing it for us. There’s going to be significant pressure in the [logistics] networks, not only ours but everyone’s, if this thing continues. The e-commerce landscape has leapt ahead four years in four months in terms of penetration levels. Infrastructure is at capacity.  If people saw Christmas come two weeks earlier last year, it’s coming four weeks earlier this year.” 

But retailers, says Collins, are the most ”inventive and creative of all responders”. They’re promoting click and collect options hard, building collection pop-ups and in the case of cosmetics chain Mecca, concierge services. “You can’t let the stock sit on the shelves,” says Collins.

Roses Only but no occasion

Although the big end of town tends to grab the attention, Sherpa’s Brett says SMEs account for 95 per cent of its customer base. 

Jack Singleton’s Roses Only service is running at double it’s typical weekly volumes, driven by runaway demand for non-occasion based purchases. “People are using flowers as a proxy for a catch-up,” he says. “When Australia Post takes four days off picking up from e-commerce retailers, it doesn’t matter for us.” 

All Roses Only deliveries – and 1300 Flowers, which Singleton also owns – are in the “last mile” to the home, using the likes of Sherpa from 14 warehouses the group operates across the markets it operates in. It made 500,000 deliveries in 2019. 

“The only issue we have is the human resource to manufacture the product,” says Singleton. “We’ve got to be so careful splitting our people into A and B teams and allocating them by day parts and days of the week.”

Consumer blowback

Customer frustration is at a knife’s edge the closer we get to Christmas. Collins says the priority for any online shopping site now is to actively anticipate customer experience and manage accordingly. Those still hampered by connecting up legacy systems to e-commerce shopping and fulfilment are in real trouble.

But there is a level of patience and understanding from customers when you “tell the truth", says Collins.

"We experience that all the time in our call centres. When we explain 500 team members are isolating, there is some level of understanding. This is really now about managing the customer experience. Consumers are actually forgiving when they’re told what’s happening along the journey. Don’t let people put products that don't exist in shopping carts. That’s where e-commerce falls down, if you’re not sophisticated in your visibility of product supply chains. If you have a sophisticated front-end, you’ll be able to tell customers where the stock is.”

That could still be a distant North Star for many according to a survey across clients at Publicis-owned Digitas – eight in ten said they had implemented customer data platforms to connect different data sources and customer channels, but six in ten hadn’t used it to change how they interact with customers. 

Magnitude of disappointment

“It highlights that wave of vendor selling in technology at a high level but it only gets implemented at a basic level,” says Digitas Chief Data Officer Maurice Riley. “So you have this magnitude of disappointment. I was hoping we could get off this train now that decisions like this have made it properly into the C-suite, and were not just being made by the IT team. But it seems like we're still on that train where they're buying, investing in technology and then it’s sitting in the corner and not actually getting used.”

But some firms are getting it right. Collins cites the Cotton On Group as a benchmark for adjusting logistics through the latest lockdowns and actively addressing customer experience at the same time – retail brands in the portfolio include Supre, Factorie, Typo and Rubi. “What a great job they are doing,” she says. They’ve got all their brands in one warehouse and they’re making it simple to cross-brand shop and they pick once, then deliver instead of having six parcels going to the same customer.”

Active customer experience management

The customer experience bleeds into delivery innovation too. Some are identifying when there’s an apartment address they will ask customers if deliveries can be made to a parcel locker or a post office for them to collect and Collins says customers like the certainty. The same goes for returns. 

“The Iconic is a classic example of a brilliant e-commerce player that manages their returns process swiftly,” says Collins. As does ASOS - when a product is returned to an Australia Post office and scanned, the refund is immediately made to the customer before it lands back in a warehouse. “That’s incredible. They know good customers are not sending back old used product," Collins adds.

"For everyone, this is now about really managing customer experience. When you do that they understand. They really do. When you don’t is when the risk of losing them becomes acute.” 

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Paul McIntyre

Executive Editor

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