E-commerce in India (though
growing rapidly), is still in its nascent phase. People like me (not the early
adopters) have moved from ‘Skeptical’ to ‘Comfortable’ zone while buying online. The motivators that took us to an Online store (or an ‘E-tailer’ so to
say) from a Brick and Mortar store were heavy discounts, convenience of sitting
at home and shopping, available reviews of products, ease of comparing the
products, ease of returns, time to think and buy instead of impulse buying and
a few more. Things that I lost in the process were to touch and feel the
product before buying it and that immediate satisfaction / happiness when I pay
for something and get that right then without any time delay. Well we are smart
enough to overcome the first issue (more often than not) by visiting some mall
over the weekend have a look at that phone or that shoe or that wrist watch
that we intend to buy, come out of the store and order it right then through
our smart phones. And that’s it, we are done, the item will be delivered at our
door step. But wait… this might take its own sweet time. Depending on our
location and the Online retailer’s warehouse, we might get the item somewhere
between 3 to 15 days or more. Now, in this cut throat competition world of
E-tailing, the top dogs have come up with the concepts of ‘Same Day Delivery’.
Recently Amazon and Flipkart have launched ‘Amazon Now’ and ‘Flipkart Nearby’
respectively which promise a delivery within a few hours. Sounds crazy? Not
really… Let’s see how is it possible -
How do they do it?
Same day delivery (or delivery
within a few hours) is easier said than done. The E-tailers will probably need
a separate Supply chain which works on a minimal lead time at every node. Among
other things the E-tailer must have - 1) A highly efficient team that
understands and plans according to the customers’ buying pattern 2) A smart
warehouse 3) Swift logistics partners.
After the new system is built up
and the customers start placing ‘Same day delivery’ orders at the Online store –
Needless to say that it will need
a lot of Financial muscle for the E-tailer to build and then sustain this
model. The product category has to be such that it requires less space and
fetches high margin to the E-tailer. Price point cannot stay as competitive as
it was before. But as they say “No pain - No gain”.
Will it really work?
As described above, the for the
same day delivery all the components involved in the new model of supply chain
have to work like an orchestra and produce a symphony. If any link of this
chain gets broken the E-tailer is unable to live up to its promise. It results
in an unhappy customer and a few unhappy customers in this internet enabled
world may hurt badly to E-tailer’s brand image. So after putting so much effort,
after spending loads in getting the infrastructure up the E-tailer still risks
its brand image by promising something that it may not always control i.e. to
deliver products within few hours. One needs to understand that this is way
different from a ‘30 mins Pizza delivery’ (because of so many variables
involved here).
And for a moment let us assume
that the Orchestra is in sync and producing a beautiful symphony. Are the end
users in India ready to pay more to get the product on the same day? I don’t
think so. We are the people who do not mind waiting for weeks to get something
along with our friends travelling back from the US just to save a few dollars.
We are the people who stood in queues for kilometers and to whom police had to
control (in Mumbai)
when Big Bazar offered some discounts during their initial days. We are the
people who do not mind travelling extra miles even to different cities
sometimes to save some extra bucks. So we don’t really mind waiting for a few
days if we get something cheaper (compared to receiving it the same day).
While it might be a great idea to
beat the competition but there are things that attract Indian customers more
than faster service, like MORE DISCOUNTS.
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