When you're creating and delivering a product, reverse logistics considerations need to be part of the overall strategy.
-Mary Kate Love
Episode Summary
The Buzz is Supply Chain Now’s regular Monday livestream, held at 12 noon ET each week. This show focuses on some of the leading stories from global supply chain and global business, always with special guests – the most important of which is the live audience!
In this week’s episode of The Buzz, hosts Mary Kate Love and Katherine Hintz bring you the second marketing edition of The Buzz! Together they tackle top news by discussing:
- The uptick in influencer and celebrity marketing
- The impact of Amazon Prime Day on consumer shopping habits and supply chain, noting the potential strain on delivery and reverse logistics due to increased purchases and returns
- Costco’s decision to increase its membership fee due to inflation and rising supply chain costs, while maintaining a high customer retention rate
- The importance of customer experience for customer retention
- And so much more!
Episode Transcript
Intro/Outro (00:03):
Welcome to Supply Chain. Now the voice of global supply chain supply chain now focuses on the best in the business for our worldwide audience, the people, the technologies, the best practices, and today’s critical issues, the challenges and opportunities. Stay tuned to hear from Those Making Global Business Happen right here on supply chain now.
Mary Kate Love (00:32):
Hello everyone. Happy Monday. You’re joined with myself, Mary Kate Love and Catherine here from the Supply Chain. Now team, we’re doing our second installment of the marketing edition of Supply Chain Buzz this Monday. So you’ll see kind of a mix of supply chain news and marketing news and things that caught our eye this last week that we think are important for you to know. So Catherine, why don’t you introduce yourself? I’m sure most of the audience knows you, but just in
Katherine Hintz (00:59):
Case. Absolutely. Good morning everybody. I’m Catherine Hints. I’m the director of customer experience here at Supply Chain now, and I’m usually behind the scenes for all of our shows. So it’s so exciting to be in front of the camera today with Mary Kay, and I’m excited to kind of give you our marketing content perspective on some of the things that are happening in supply chain. And not to give it away, but mostly retail in this episode,
Mary Kate Love (01:26):
A lot of retail. That’s what’s been coming up lately. I think that’s something everyone is interested in and it’s really a way where we can see supply chain innovation as both practitioners and in our daily lives. So I always like to talk about retail, but before we get started, we have to give a shout out to Scott and Amanda, who’s typically, Scott is in the seat here obviously, but he is on an Alaskan cruise, so we’re wishing them well. We’re super excited to see more pictures. We’re a little bit jealous, but we know that they’ve had an awesome trip so far. And Scott will be back in the seat tomorrow, I think, right, Catherine?
Katherine Hintz (02:02):
Yeah. So thanks for watching Scott, and I hope that your coffee is good. I hear that the West Coast coffee is a little bit better than what we can get in the south sometimes.
Mary Kate Love (02:13):
Yeah, it’s coffee time on the West Coast for sure, for us. Catherine and I are both in central time. It’s kind of getting towards lunchtime, so we’re just starting to think about that. Yeah, so lastly, just don’t forget to subscribe, supply chain now.com/join. That’s our easiest link that has everything from signing up for our newsletter, from listening to our shows, watching on YouTube. So that has everything you need there. We have just a few quick announcements, Catherine, if you want to kick us off and then I’ll talk a little bit about what that said.
Katherine Hintz (02:41):
Yes, of course. So this is not the only show that we have this week, so you can tune in on Wednesday for an exciting webinar with our friends at Bastion Solutions. And then on Thursday we have another great webinar with Coupa and we’ll be able to paste those links in after. If you’re listening and you want to RSVP to join us, I promise you, you will not regret it. These are going to be two really informative sessions and they’re also going to have some really clear takeaways for you to go back to your daily work and know how to improve your supply chain experience as practitioners and providers. So it’s going to be really exciting.
Mary Kate Love (03:19):
Awesome. And on that note, subscribing to our newsletter With that said that Scott writes almost every week. It’s a really unique newsletter in that it’s written by Scott fully from his perspective. It also pulls in all of our upcoming events or interesting tidbits from our shows from the previous week, which I always personally love because even if you listen to the show, you might’ve missed something and Scott tends to pull out that knowledge, put it in what that said, and you can read it and sign up for any upcoming events. So check it out on our supply chain now, LinkedIn company page and you can also subscribe to it via email. So both ways. Alright, are we ready? Can we
Katherine Hintz (03:58):
Dive in? What do you think?
Mary Kate Love (03:59):
Again, this is kind of a mix between our passion, which are supply chain and marketing. So hopefully you’re as excited about these stories as we are. And we’re looking at the comments here too. So if you are commenting, we’re going to be trying to looking in and pulling in some of your thoughts and ideas.
Katherine Hintz (04:17):
We have t squared with us T squared. I hope that you’re okay with it’s us this week and not, but hopefully we can bring on some nourishment from maybe a different point of view. And then we also have Edgar here with us. Hi Edgar, thank you for tuning in. And I think we’ll start diving in on some key trends and what we see happening in the marketplace.
Mary Kate Love (04:39):
So just on that note, the trends that we’ve seen. So all of our news stories again are a little bit different, but if we kind of boil it up and see these high level trends is people are continuing to reach customers in new ways. That’s everybody that’s trying to reach customers in new ways. So we’ll talk a little bit about some of the AI automation, creating personalized content to reach new customers. We’re going to talk about community building via influencers and celebrities. Tale is all this time is the celebrity to reach people, but we’re seeing new and improved ways of doing. And then we’re going to talk about something very supply chain related in the retail space, which is reverse logistics. So that’s a topic that kept coming up on some of the retail news that we’ve seen. So high level trends, again, we’ll start off with this influencer, influencer and celebrity marketing, which is personally one of my favorites.
(05:28):
I am a Bravo fan, I am a former Jersey Shore fan of all. I love all reality TV shows, most reality TV shows. And as we see influencers create these larger and larger followings, a million, 2 million, 3 million followers, we’re seeing partnerships that in my mind are very creative in reaching a brand new target audience. So we don’t expect this to stop. The trend is showing that we’ll see more and more influencer in 2024 and beyond. And really the sentiment about this, this always works as long as kind of the morals and values of the brand line up with the influencer. If it’s something that seems off or if it’s something that seems like, why is this person talking to me about health when I know this is what they do every weekend, then that’s when people kind of throw the flag up and say, Hey, this doesn’t make sense. It’s not
Katherine Hintz (06:24):
Going to work. Exactly. And I think that that’s one of the reasons why it’s so important as a company or even just as an individual at this day and age. We all have digital footprints. We can all be micro influencers in one way or the other. So to know your personal brand ethos and identity and then your company’s brand ethos and identity, it really helps you figure out in a more timely manner the right partnerships to look for and the right impact that you want and who you want to be associated with. Because I think we are seeing the reach of these influencers and celebrities get to huge levels with stuff like the Super Bowl and Taylor Swift, bigger people. And then we also see the rise of folks that are micro influencers that are partnering with smaller brands and it’s a mutually beneficial experience. And so I think that making sure that you’re leading with authenticity and you really believe in who you are and who you’re presenting to the greater marketplace and then what the company you’re partnering with is doing too. Like you said, MK is paramount to these partnerships really being successful.
Mary Kate Love (07:27):
Yeah, and I love you talking about micro influencers. We talk a lot about that here at Supply Chain. Now supply chain has a lot of micro influencers and people that have their own niche that speak about a topic within supply chain that they know so well. And we love working with those people because they really have a captivated audience and people trust ’em. So the trend is going more towards micro influencers versus celebrities with hundreds of millions of followers, if you will. And so when I was thinking about this, I was thinking about who are my latest favorite that I would give an award
Katherine Hintz (08:01):
To
Mary Kate Love (08:02):
These marketing partnerships And I have three.
Katherine Hintz (08:05):
Okay, I’m ready.
Mary Kate Love (08:06):
And I hope you like these ones. I think you’ll and I’ll explain who they are because if you don’t watch reality TV shows, you might not know. But number one is Lindsay Hubbard, who’s a reality TV star summer house on Bravo, she had a partnership with Clear Blue, which is a pregnancy test in the market that claims to be the best pregnancy test can tell the earliest. And what I love about this is Lindsay is a woman in her thirties who has over the years shared her fertility journey that she’s gone through a lot of different things in her fertility journey. So she’s someone that people trust that will share what she has gone through. Good or bad, she froze her eggs. That was all on tv. She went through a miscarriage that was on tv, and so now she’s pregnant and she announces her pregnancy with a partnership Clear Blue, which I just love because again, this is someone that viewers have seen struggle or share the journey through the past. And you have a large company like Clear Blue partnering with her on her pregnancy
Katherine Hintz (09:08):
Announcement. I love that. And I mean talk about showing your authenticity. I think there is never a situation that you need a pregnancy test that there’s not a sense of anxiety a little bit with somebody that has so publicly shared the ups and downs. You want a reliable company, you want reliable results no matter what you want that result to be. So I think that that is such a beautiful way to share her family expanding and to really clear Blue did a great job finding a good partner to share their story with. Yeah,
Mary Kate Love (09:42):
A great partner, a great partnership makes sense all around for both of ’em, right? And it’s somewhat kind of the same. My second one is Jimmy Darts, so he’s a YouTube TikTok influencer who’s known for basically random acts of kindness. So finding strangers, whether it’s taking them to Disney World or giving them a thousand dollars, whatever it is. So you can imagine why he’s popular. It’s really a feel good type of channel that he has. And so he partnered with Choice Hotels to give away two trips. And so that lines up with exactly with what Jimmy Darts would do anyways. Choice Hotel kind of gets their name and brand out there and is associated with this person that makes everybody feel good,
Katherine Hintz (10:25):
Right? Yeah. I love traveling, I love going on trips, I love staying in a hotel, but I think that there sometimes can be this undercurrent of stress when you’re planning. So the fact that they partnered with somebody that is trying to spread so much joy and kindness and probably a lot of relief to these people too, there’s definitely a psychological undercurrent of ease in that. So that was very smart on their part.
Mary Kate Love (10:48):
Super smart. Super smart. And again, this is really just giving examples of ways that companies are reaching their audience. So obviously in supply chain, reaching audience, when you’ve got a very niche tool that can save people time, that can solve their problems, it’s thinking outside the box, right? Partnering with different people, conferences that reach this audience of yours. And so the third one that I think is probably the most popular one that people have heard about is Snoop Dogg and Solo Stove. And so this is when Snoop Dogg said, I’m giving up smoke and then waited 24 hours and talked about, he was actually saying it with solo stove, which is a fire pit essentially that does not have smoke. And I can attest it works. My parents have one. It’s awesome. You don’t go inside smelling like smoke. It’s really a great product. But I mean I feel like everyone was talking about this partnership just being genius and I
Katherine Hintz (11:40):
Love it. I definitely think that hearing that come out of Snoop Dog’s mouth, everybody was like, this has got to be some shit going on a
Mary Kate Love (11:47):
Second. Yeah, what’s going on? What’s going on? So yeah, those are our top three celebrity influencer partnerships and Catherine Scott kind of a big marketing slash supply chain story that we’ll talk about next.
Katherine Hintz (12:00):
Yeah, so going off of the influencer and celebrity marketing stuff, I can say that we’re about to talk about Amazon Prime Day. And I think that in relation to those first stories, we’ve reached a point where there’s so many influencers and there’s so much affiliate marketing and there’s so much endorsement of reviews that I can say for myself when I go to buy stuff, when I’m researching for Amazon Prime Day, I’m looking at influencers and I’m looking at people that I can tell, I’ve heard them say maybe negative things about products before. And if they say that they like something, then I’m much more willing to buy it because so often I’m really glad they had to start disclosing when it’s paid comments and reviews on stuff. But I don’t know, I think that I would be curious if any of our listeners feel the same way that they have certain people that they go to when they’re researching stuff to buy
Mary Kate Love (12:52):
Someone that isn’t just going to do all the partnerships and push everything and they probably make an Amazon list and you probably follow the list and add it right to your cart.
Katherine Hintz (13:02):
I may or may not have a couple different anthropology home dupe list,
Mary Kate Love (13:09):
But
Katherine Hintz (13:09):
To kind of get down to the details, Amazon Prime Day is expected to set a new record in the US for online spending. For those who don’t know, prime Day starts tomorrow, July 16th and it’ll go on the 17th as well. And the reports are predicting nearly 14 billion of sales over two days, which is a 10.5% increase from last year. And I think that this is really important to mention because a lot of retailers are struggling to sell certain types of products like appliances, home goods, clothing, and prime days really going to help boost those sales. And I think is really interesting because as a consumer, as someone that shops a decent amount, I can say that I am guilty of waiting until Prime day or waiting until I know that there’s going to be a sale. And I don’t know if I’ve really thought about the impact that that has on retailers that if I’m waiting or I’m classifying things as these are the types of products that I’m willing to pay full price on, this is what I’ll actually buy from free people or I’ll actually buy from KitchenAid. I don’t want the Amazon knock off of it, then what’s going to happen after time for all of those retailers if everybody’s waiting for sales to happen?
Mary Kate Love (14:22):
Man, that’s so interesting because I’m thinking Catherine, wow, Amazon Prime Day is changing our shopping behavior and habits, right? July typically isn’t a huge spending time for me at least. Obviously November, December, that’s typical. But because I always know it’s coming around this time, I start to build lists of things that I would buy if it’s on sale. And I know a lot of that is just a mental, I think I’m getting a good deal, so I better buy it right now. And so I think that change, it’s such a large marketed event and it’s even the way they market it is they don’t release the date, right? No, they don’t, right? Until up until, so it’s like this really smart marketing approach where everyone kind of knows it’s coming and people are like, get ready.
Katherine Hintz (15:06):
They’re getting this huge inclusion of cash. I know for me, I’m buying a bunch of furniture for my house right now and I sat on those purchases, I had them in my cart and I am waiting. And the same thing for some other retailers. There are places like Target Circle Week was last week, Friday
Mary Kate Love (15:26):
I saw this
Katherine Hintz (15:27):
Week
Mary Kate Love (15:28):
And the Nordstrom sale anniversary sales, they’re trying to
Katherine Hintz (15:31):
Compete with everybody and I know that it’s probably really challenging and I also know that I am still going to wait until it goes on sale to buy most of my stuff.
Mary Kate Love (15:40):
I know it. Yeah. We were looking at stats before this and it said the average household spends $181, which that’s really significant if that’s the average. If you’re buying big ticket items, obviously you’re going to be going above that, but for the average household to spend almost $200 on this is truly,
Katherine Hintz (15:59):
That’s impressive, man. I feel like speaking of that, the impact that this is going to have on supply chain and on reverse logistics is going to be really, really big. I don’t know about you mk, but I am the worst culprit of just buying a bunch of stuff and then returning it.
Mary Kate Love (16:17):
I talk about this all the time on the show. I’m like, and it’s a consumer. I’m terrible with it. And I know the impact on supply chain too. And this is why I’m always for solutions that are better about sizing and taking actual, I mean, I think the sizing across different brands is crazy. And so that makes it so hard on everyone to know what size you actually are, even when they provide measurements and also who measures all the time. We’re not really doing, but we saw a stat that said from Prime Day, no one puts out the exact numbers, but they estimate that 15% to 30% of items are returned. And so if you think about, what did you say, 14 billion in sales, that’s a lot of returns to manage, to deliver, to pick up. And you think about the inefficiencies this poses and how much money is lost during that. And this is just such a huge problem and becoming honestly a bigger and bigger problem as people online spend and watch more than in person.
Katherine Hintz (17:16):
And now I’m thinking too, and I didn’t even consider this before the show, I do all of my Amazon returns at Whole Foods. There’s one nearby my house and I just take out my sub and I use the little machine and they
Mary Kate Love (17:27):
Throw it at them and they’re like, thanks.
Katherine Hintz (17:30):
What kind of impact is this going to have on all of their third party affiliates or vendors or even Whole Foods is owned by Amazon now owned, but I mean there’s going to be probably
Mary Kate Love (17:41):
Kohl’s does it too. Yeah, that’s a great point. Kind of backing them up, it’s like we’ve created this, I don’t want to say unnecessary, but kind of this unnecessary strain on the supply chain. It’s not a week before Christmas, it’s not a week before a large holiday. And we’ve created this strain on the supply chain that has a lot of moving pieces, and I do think this reverse logistics trend is going to continue to grow. I think Catherine, you and I were talking about maybe on our last marketing edition of The Buzz about how brands are shifting to, they still have a brick and mortar, but the brick and mortar is for you to experience their product and say like, okay, this is a product I’ll buy. I’m probably not even going to buy it in the store. They might not have what I want in stock, but I’m going to go home and buy the money. And so we’re seeing that shift a lot more where there’s, everyone thinks, oh, brick and mortars have totally gone away, but not necessarily. They’re more about a brand experience, but you’re still shopping online. So these rehearsal can fix kind would scare me. When I think about,
Katherine Hintz (18:42):
When you think about the clothing retail side of things, not as much anymore, but I used to shop at Madewell pretty frequently and their stores are always pretty lean. They don’t have a million sizes of everything. They don’t have every single color. And I am wondering if that’s kind of their experience too. Is it? I know for me, I’ll go to Madewell, I’ll try on jeans and then I know my size, so then I’m just going to put my size online forever unless there’s something specific that I don’t know how it’s going to fit. But that’s so much easier than I was going through to donate some clothes this weekend. And the sizing for everything is, I mean, I have six different sizes for the same. I know it’s unbelievable.
Mary Kate Love (19:25):
And sometimes the same brand is not
Katherine Hintz (19:26):
Even the same. So I dunno, I just think it’s really changing the landscape and it’s impacting so many different parts of it. And I think that the user experience and the aftermath of purchasing needs to be considered too. There’s so much technology that goes into prime day and then is your shipment, have they made the tracking label has a ship? How do you make sure when it’s coming and there’s a lot of strain that happens, all of the traffic that hits those sites over the next probably week or so is going to be fairly disruptive. I’m sure there’s going to be glitches and slow down. I’m sure that as much as they love to promise two day delivery depending on where you live,
Mary Kate Love (20:09):
We all know prime Day is the exception. Yeah, no, and T squared is kind of saying exactly what you said. You said reverse logistics needs to be more in the business strategy, and that’s right. When you’re creating and delivering a product, reverse logistics needs to be part of the overall strategy. We need to be thinking about it in business and it needs to be, we need to understand the cost of that two year business and who takes on that cost. Where are we eating that cost in the business? Are we deciding that it’s a marketing cost? It’s a way to get the product in the customer’s hand and the size might be wrong, but they’re still going to buy, right? So I think that’s a great point and people are talking more and more about that for sure. And we also saw what you’re kind of hitting about is that all this different technology, making sure that’s tip top, right? Because we know this traffic is going to be insane on days like
Katherine Hintz (21:02):
This. And I think it’s also a good reminder to be kind to your delivery drivers if they deliver your package to the wrong apartment building. I don’t know where everyone lives watching the show, but it’s very hot in the southeast right now and I don’t think a lot of the trucks have air conditioning still.
Mary Kate Love (21:21):
Oh man. It’s hot up here in Chicago too. I feel like my summer has been a hot one for sure. Well yeah, that’s Amazon prime day. Maybe Catherine and I can make a list of all the things we’re buying on Amazon Prime day and
Katherine Hintz (21:33):
Yeah. Oh my gosh. We’ll get one from Amanda too. Amanda’s Amazon lover. So maybe that’ll be our next,
Mary Kate Love (21:40):
We’ve got a card
Katherine Hintz (21:41):
Full too, article, have our retail picks.
Mary Kate Love (21:45):
It’s a great idea. We’ll put that in though. With that said, of all the deals we’re getting and it’ll be a nice range. I’ve got babies and toddlers, so I’ve got stuff in there. Catherine, I feel like you’re great with fashion, beauty, skincare, and Amanda as well. So we’ll have it all covered.
Katherine Hintz (22:01):
And then sticking with the retail trend, we have some news about Costco to share. So for the first time since 2017, Costco will be raising their membership prices and MK has some stuff that she’s going to share about how interesting their relationship with the supply chain is. But I’ll give y’all some insight on the actual membership chains itself. So this past Wednesday, they announced that they’re going to be upping their annual membership fees starting in September for individual and business accounts in the US and Canada. So they’ll pay $5 more, it’ll be up to $65 a year, and then executive memberships will be $130, which is 10 more dollars a year, which doesn’t seem like that much, but when you think about that, there are 52 million paid members. That is a lot. I mean that’s pretty impressive. They also are putting a cap on the reward available for the highest membership tier.
(23:04):
So basically if you’re a Costco membership, you can get a certain amount of cash back for your spending. So if you purchase a couple of big items, you’ll be able to see at the bottom of your checkout cart, your 2% cashback reward is up to X amount of dollars, and now it’ll be the maximum is 2% reward available for the highest tier members, and it’ll increase from a thousand to 1,250. And then about half of their memberships are that highest executive level, which I recently got a Costco membership. My family had one for a long time, but I finally decided that I was going to fly away from the, and I think that the executive membership was worth it because you get that higher cash back and if you plan on being a couple bigger purchases, you’re going to want that 2%,
Mary Kate Love (23:54):
It’ll paying for itself.
Katherine Hintz (23:56):
But what I thought was so interesting, especially being in customer experience and success and marketing, is that over 90% of Costco members renew every year. So they are really doing something right with their customer retention strategy is to think that 90.5% of their members renew every single year.
Mary Kate Love (24:17):
I mean, that has to be amongst some of the highest retention rates ever. And you wonder if this increase will have an impact on that, but something tells me probably not, right?
Katherine Hintz (24:28):
Yeah. Like I said, I haven’t had my membership long enough to know what the renewal process is. Maybe it’s automatic and that helps. Is that it just happens.
Mary Kate Love (24:36):
I think I am pretty sure I have a membership and I don’t remember ever
Katherine Hintz (24:41):
Renewing this. Maybe they’re hoping people won’t notice. They’re like, if we keep you low enough, they just won’t even.
Mary Kate Love (24:46):
Exactly. Exactly. Yeah. And I think Costco we’ve always talked about, one thing that is always talked about with Costco is they always try to keep their prices low. There’s the hot dog, what is it?
Katherine Hintz (24:58):
50 a buck 50 I think.
Mary Kate Love (25:00):
And the CO is always saying, it’s not going to raise. It’s not going to raise. Right? And it’s like you can’t even really buy a bottle water for a dollar 50 at this point anymore. So pretty amazing. I think to me, this increase in pricing is just a reminder that even the biggest and most successful organizations are feeling inflation and the rising cost of managing supply chain amongst other things. And so I think that I’m not super surprised about it. I think everything has increased. I hate to say it right, but it’s almost like as a consumer, we’re so used to it, which is not good because I wish we weren’t used to it and we would cause more fuss when things like this happen. But we are so used to it
Katherine Hintz (25:41):
At this point. Exactly. And I think it is kind of hard because with companies like Costco, it’s easy to almost feel like they’re doing you a favor. So you don’t want to complain too much because you’re like, I’m getting this cash back, I’m getting wholesale prices. I’m like, yes, I’m,
Mary Kate Love (25:56):
I’m buying in bulk. I’m getting it.
Katherine Hintz (25:57):
Yes. So then you’re like, is it really $10 a year is an increase, but if I bought all of the stuff that I bought at Costco at Target or Pub for even Walmart, oh my gosh, it would still be easily double the price for,
Mary Kate Love (26:12):
Gosh, yeah, I think about my diapers alone that I buy for the kids every month and it comes in bulk. It’s obviously a great price, and just that alone is probably worth the membership in this household. I buy my
Katherine Hintz (26:24):
Dog food at Costco now. My dog is really big, so it’s me. A lot of,
Mary Kate Love (26:29):
He’s huge. He’s really, but I think we, we talk about Costco supply chain strategy sometimes here and how we love their approach and obviously consumers reap the benefits of it. But a few things about their supply chain strategy and approach that you probably know you may not know, is obviously they have minimal touch points. So products are often going directly from the supplier to the warehouse in the store or directly from the supplier straight to the store. You’ve all seen the stacks in Costco where they’re using their store as their warehouse and things are moving around and moving off shelf pretty quickly. They also use a cross docking system. So items are transferred from inbound to outbound transportation with little to no storage time. Again, this is improving that inventory turnover. And so not having to hold that inventory, have that inventory take up space, the inventory’s right on the floor, you’re turning it over quickly.
(27:24):
That is a cost savings to the customer. They also do limited skews, so they’re really relying on high volume sales instead of having, I dunno if you guys have ever bought deodorant from there, but you end up buying 60 deodorants, when would you ever buy even two? So they’re really relying on you buying in bulk, not giving you as many choices, but giving you good choices. So you buy that deodorant and you buy those toothbrushes, whatever it is in bulk, instead of walking on the aisle at any other store and you have about 800 deodorants that you can choose from and you’re like, oh my gosh, I don’t even know what to
Katherine Hintz (28:02):
Choose. It helps with that decision fatigue of having endless options. Sometimes the best thing you can do is give your clients less options, less but higher quality.
Mary Kate Love (28:13):
That’s true. There’s something to be said about that too. I think Catherine is, maybe that’s why people love going to Costco so much. There’s obviously the first example, but it is kind of when you go to Costco, you’re just like boom, boom, filling up your cart, feel like you got a good deal. You kind of feel like they’ve done the work for you in terms of finding a good deal, keeping the price down. And even I’ve noticed they have a lot of products with good ingredients in it too. And I don’t know if that’s a strategic approach or if they just end up doing that because of their relationship with suppliers, but I think that is a bit about the customer experience. It’s like we don’t have that many choices to make in Costco. We just have to choose what could fit in our cart.
Katherine Hintz (28:55):
Is Costco the real influencer here? They have, instead of going on the Amazon shopping list, we just go to
Mary Kate Love (29:02):
Their house, they pick what we’re going to
Katherine Hintz (29:04):
Get. And I agree with you about the ingredients I am and I have food references for my ingredients and there’s so many things that they have that you can buy in bulk that is just so nice. Just know I’m going to have gluten-free crackers to eat my hummus with.
Mary Kate Love (29:24):
Yeah, you’ll probably have enough for
Katherine Hintz (29:25):
Six months for someone with dietary restrictions. It’s so expensive. And so it feels like I’m really actually saving so much money when I do that shopping at
Mary Kate Love (29:37):
Francisco, right? Yeah, I totally agree. And part of their approach too is those private labels. So we’ve all heard the, Hey, what is there? The Kirkland Vodka, right? Everyone says is the same as Great Moose. So there’s a lot of products like that where it’s just they go directly to the manufacturer’s supplier and they have their own private label that people tend to trust. I think the Kirkland products are trusted. Again, you feel like you’re getting this good deal. I think it’s just generally a great approach. And lastly on that list is their efficient packaging. Again, you’re going to buy in bulk so they don’t have to pay as much in packaging when you’re buying 60 odorants, right? It’s just all coming together. So I think there’s a cost savings there as
Katherine Hintz (30:20):
Well. Curious if there’s ever been any studies done on the fact that Costco doesn’t give you bags, you can ask for the boxes. That stuff came shipped in and I know in a lot of places, and not in the south yet, but in a lot of places you get taxed for bags or it’s like,
Mary Kate Love (30:36):
Yeah, we do here, you paint for your bags. Yeah, I think it’s 7 cents maybe. So you do see in Chicago, I think people are mad about that, so everyone’s carrying stuff out instead of just, I have
Katherine Hintz (30:47):
My reusable bags stacked up in the corner next to my door, but I’m curious,
Mary Kate Love (30:52):
You forget ’em at least every other time. I forget ’em all the time. There
Katherine Hintz (30:56):
Times I forget it and it’s in my car, they make it to my car and then I just get so excited that I’m inside and then I unload it into my car, into my back so I can carry it up to my apartment.
Mary Kate Love (31:06):
I know we need a reminder on our phone or something to tell us. But yeah, I think Costco, again, it’s just this really large retailer, very interesting supply chain strategy that typically delivers cost savings to their customers and they still are dealing things with inflation and the business costs rising, and we see that in kind of the membership be increased, but still an overall great customer experience for sure.
Katherine Hintz (31:32):
And to kind of tie all three of these stories together, it really does seem like buyers appreciate feeling seen and known, right? And I think that’s what is kind of a high point of all of these stories is that if you feel like you can relate to an influencer or you feel like a company like Amazon or Costco knows what you want before you have to ask for it, you’re going to give them your money. If you feel like, and I mean there are some things to be said about labor practices at some of these bigger companies, but if you feel like you are getting deals on things that reflect your lifestyle and your preferences, you’re going to keep going back to those companies. And if you feel like even you’re able to plan and strategize and research these white labels and get Gray Goose white labeled vodka as Costco, or I know I have their shampoo and it’s apparently the same as Pureology shampoo.
Mary Kate Love (32:28):
I didn’t know
Katherine Hintz (32:29):
That one. Yeah. So I really like it if you guys are looking for a new shampoo
Mary Kate Love (32:34):
List,
Katherine Hintz (32:35):
But I think that really making sure that everyone you interact with as a supplier or as anybody really in the greater business space that your client feels heard and appreciated, that customer experience is your customer retention. Just like here, T Square said it about Costco.
Mary Kate Love (32:54):
That’s so true. I guess we were not making that connection and that totally makes sense, right? Your customer experience is the reason for that retention. And it doesn’t matter if your customer experience is in store online or how easy it is to return. That’s still my customer experience. There are plenty of places that make it too hard to return that we won’t shop at. So I think all of that, your customer experience starts with reverse logistics even. That’s a great way to sum it up and kind of sum up our show too. I think that was all of our stories today. We hope you had a great time listening to our marketing supply chain mix of new stories. We like seeing these creative brand partnerships, these approaches in retail, what we can learn as both practitioners and I guess consumers in supply chain, right? So we hope you liked it. Catherine, do you have any final words, thoughts?
Katherine Hintz (33:47):
I don’t think so. Happy shopping and
Mary Kate Love (33:50):
Yeah, good luck with Prime Day.
Katherine Hintz (33:53):
Enjoy prime day and thanks for tuning in.
Mary Kate Love (33:56):
Thanks everyone for listening to the Buzz and we will see you hopefully at our shows this week as
Katherine Hintz (34:01):
Well. Bye everybody.
Mary Kate Love (34:03):
Bye.
Intro/Outro (34:05):
Thanks for being a part of our supply chain now community. Check out all of our programming@supplychainnow.com and make sure you subscribe to Supply Chain now anywhere you listen to podcasts. And follow us on Facebook, LinkedIn, Twitter, and Instagram. See you next time on Supply Chain. Now.
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