COVID and the contact center - how eBay's biggest re-commerce seller musicMagpie has become more efficient during the crisis

Profile picture for user slauchlan By Stuart Lauchlan November 17, 2020 Audio version
Summary:
musicMagpie is an e-commerce success story, but the onset of COVID brought fresh challenges to how the firm ran its contact center operation. In the event, the crisis has in fact changed a lot for the better.

Magpie
(Pixabay)

A common theme of many people’s lockdown over the summer months will have been killing time by finally clearing out the spare room or the loft or the garage and in the process discovering long-forgotten items that were put into storage years ago. The question then becomes - what to do with all this unwanted stuff unearthed by the long-postponed clear out?

While some things will be destined for rubbish tips or recycling, other items, such as CDs, DVDs, books and consumer electronics, can be turned into hard cash via outlets such as musicMagpie. The firm was founded in a garage in Stockport in the North of England back in 2007. Since then the company has grown to become the world’s largest re-commerce business and the biggest seller on eBay and Amazon, with the firm now looking at a potential listing on the London stock market.

When sellers come to the firm’s website with items for sale, a buying price is calculated using an algorithm based on factors such as the item’s popularity - the biggest seller is still ABBA’s Gold CD! - and the price it fetches on other websites. If the offer price is acceptable, customers send their items to musicMagpie and payment is made before the goods are then offered up for resell at a suitable margin mark-up.

It’s undeniably an e-commerce success story. Co-founder and CEO Steve Oliver notes that the firm has expanded its reach over the past 13 years:

We've really evolved our product categories from those early days of just CDs, DVDs, games. We added books as well, which is a great category for us, but really in the last three to five years we've made that transition across to becoming the UK’s biggest mobile phone recycler. Well over half of our turnover now is consumer technology products. It's not just mobile phones, but also games consoles, tablets, MacBooks etc, so it's a wider product category…It’s kind of a one box strategy of people decluttering, so whether they want to sell us their old media or books or phones out of the drawer, they can do all of those things with us.

COVID and the contact center

As noted above, the pandemic-triggered shift to working from home and the imposition of lockdowns as left a lot of people with time to declutter. That’s undoubtedly been good for business, says Oliver:

In the early stages [of COVID], it was almost a little bit uncomfortable because obviously so many core businesses were so badly affected - hospitality, travel, physical retail. But there have been COVID winners. I'm not particularly comfortable with that phrase, but we positioned ourselves as as being here to help for two sets of customers. We do have two sets of customers. We have a customer who sells to us and a  customer that buys from us. We've positioned ourselves as here to help people work from home, to help people stay connected, as we all ended up on Zoom quizzes every Friday night. We've all got Zoom fatigue now generally, but we're all on tablets and our phones even more than we ever were….People started buying books more and returning to films and games etc. So that was the customer who bought from us and we got increasingly busy. But also we had people at home who had more time and perhaps had a desire to raise some cash for their old stuff and we have to service that customer as well. So there was an increase in demand for both of those services.

That had implications in turn for how musicMagpie serviced this increased demand in terms of capacity and resourcing, he adds:

We had to be careful we didn't swamp our operations and contact center with volume with this increase, especially at the time of COVID. Obviously we all went to work from home as an office and our contact center did, but our operations team very much had to stay on site, managing our operations. We did have to be careful. We got them very comfortable and safe and secure with social distancing and staggered breaks, etc. But we did have to be careful of not really letting the racehorse run away with itself in terms of volume.

In the event, the challenge was almost in the other direction, he recalls:

Contact volume stayed fairly static. I think certainly in the early stages customers were a little bit more forgiving if something took a little bit longer than it normally did, [such as] delivering. As we all know, the logistics services have added somewhere between 50% and 100% of volume through their networks, so I think customers were a little bit more understanding of the service that you're offering.

Moving the contact center team to home working took place in March and was executed over a 48 hour period, Oliver explains:

That transition to working from home for them has been really superbly done. They're all very happily working from home. Actually - and I don't think we're unique with this - we saw some really interesting results where absenteeism went down, productivity went up and also the flexibility of when we could talk to our customers also went up. We just told everybody, 'Make it work for your circumstances. If you need to do a school run or make tea, [do it and] then come back and log on’. We were so flexible, much more flexible working. Come back on in the evenings. That suited us really well.

Efficiency gains

According to Oliver, the COVID crisis has, if anything, led to operational efficiencies for the firm. The majority of contact between customers and company takes place online, mostly via email:

We have become more efficient. We brought a chatbot that's dealing with about 15% to 20% of our queries. We haven't needed to recruit because the chatbot has taken away [work]. That's averaging query responses in about 15 to 20 seconds and the C-Sat scores really high on that. Just the bog standard, ‘Where's my delivery? Have you got my stuff yet?’ on the inbound selling to us is taking some strain off and making us more efficient basically.

We are almost entirely email and and live chat, a little bit of social media interaction. We took the very brave decision to take the phones off about 15,18 months ago, before the pandemic. To be honest, it probably made that transition to get people home easier because we didn't have to do voice. We do offer voice still. We'll do a call back service if somebody really wants to talk to us because it's just easier to deal with it over the phone. We will call them back. But 80% [of customer interaction] is is on email.

He adds:

I really like this whole chatbot thing.  I mean I'm catching up with the modern world and I have to say...I'd rather just type and type away than speak to them and if somebody can answer me by telling me, ‘Here's your tracking information, yes, your product’s with us, it will be dealt with tomorrow and you'll get a payment’, that’s fine for me. That's good. And that's very much the way forward for us and obviously it makes a great deal of business sense and cost efficiency.

The shape of things to come

Looking ahead there are new customer engagement initiatives in the pipeline, beginning with the rollout of the UK’s first mobile phone buying kiosks. There will be 20 of these initially, located in branches of The Co-op and Asda supermarkets. Customers can visit a kiosk and place their phone through an inspection hatch for scanning, after which an offer price will be made. If the customer accepts that offer, the phone goes into a storage container and instant payment is made via bank transfer.

This, notes Oliver, means that the customer has money that can be spent on the spot in The Co-op or Asda outlet in question, an appealing prospect for the kiosk hosts. It’s a win/win overall, he argues:

I often call ourselves the lazy man's eBay. When I say that I mean 80% of the UK population won't sell on eBay. It's too much hassle. It takes time and effort and technical inclination, taking pictures and going to the Post Office. We provide free logistics and fixed valuation, but if you can't be bothered even doing that, you might walk past one of our kiosks now in a grocers or a convenience store and actually we'll be talking to the customer live.

The one place that everybody is still going to is the local food shop or the supermarket, once a week. Actually we do use the Asda toyou logistics service as well for that very reason, if somebody didn't want to drive specially to the Post Office and park and queue and all that kind of thing. We do see [a kiosk] as incremental volume as well. It will act as a drop off. So somebody can just complete the journey, but equally somebody can walk up and do the whole journey.

As for that at home contact center team, there are now plans for them to return to the pre-COVID working norm. A rubicon appears to have been crossed as Oliver observes:

We have advised our contact center colleagues that it's unlikely that we'll bring them all back into an office environment. We've asked them obviously, 'Are you happy working at home?’ and almost unanimously they told us they are. It suits them, it suits their lifestyle. I was a real old dinosaur about working from home, I don't mind admitting it. To me it was like everybody's gonna be sitting in their underpants, watching This Morning and not working. Actually that's not the case. The thing about the contact center is that it is measurable. You can see how many queries, how many customer contacts they are they are having, so we can actually measure the fact that productivity has gone up. When we've asked them, 'What's your happiness score out of 100 about working from home?’, it's late 80s, low 90s in the two surveys that we've done.  Staggering really.