With the rise of online commerce and consumers located across tier-I, II, and III cities, there is a greater demand for businesses or brands to maintain inventory close to the customer’s location so that deliveries could well be completed more quickly, asserts Rakesh Munnanooru, Founder and CEO, WhistleDrive.
India is a country full of multi-cultured people that celebrates colourful festivals. With India’s biggest festive season coming closer, the peak of logistics is just around the corner!
A season full of festivities, excitement, and jaw-dropping discounts from e-Commerce, D2C brands, and retailers makes it even more delightful. This season has always been important to the Indians, and it has become crucial in the post-pandemic world. It is observed over the years that industries sell over 35-40 per cent of their stocks during the season’s sale. The dramatic year of 2020 has increased the urge in customers to celebrate this year with huge enthusiasm and the industry is prepared to rebound with its flash sales offers.
Around 20 million people are expected to shop on various e-Commerce platforms during the festive season, amounting to US$ 3 billion for players like Amazon and Flipkart, according to a report by the research firm.
Inventory management at scale
The preparation for the season started two months ago for the major players and service providers, with planning out the volumes, warehousing, storage, manpower, suppliers, and logistics. Due to high demand, the costs for all the services shoot up during the season and special rates are paid to all service providers. As per our sources, e-Commerce alone is expected to see four times of sales over last year’s volumes. Giants, like Amazon and Flipkart, are adding huge storage spaces to ensure faster shipment of deliveries to customers. With the estimated plan for the peak, manufacturers increase the production volumes and keep the stock ready in all major locations and cities as per the trends.
A challenge that has been found interesting lately is that the demand pattern and demographics at each geography is now different as people relocated in the last one and half years. Also, with the increased online commerce and customers distributed across the tier-I, II and III cities, there is a high need for the businesses or brands to maintain the inventory close to the customer’s location to be able to do quicker deliveries. So, we see a huge demand for micro-fulfillment centres across the regions, especially in the urban areas. Other retail stores will still have an upward demand as the shopping spree is going to start from the first week of October.
Efficient order processing
The order processing process has become ever efficient with micro fulfilments centres and dark stores, which will eliminate the process of shipping goods from the manufacturing location to the city hub of the place of order, which brings down the order delivery time by 60 per cent. Most of the order processing occurs in a distribution center or warehouse where pickers, sorters, and packers’ function in sync towards order achievement, or it can also be done by small groups based on the scale of business operations.
As the overall process is partially decentralised with micro fulfillment centres, the speed and efficiency is improved while the costs might be fractionally high compared to the regular way of order processing.
Season sales come with the delivery date anxiety, as the customers only wish to get the goods delivered soon as ordered while logistics companies optimise the deliveries with little more resources than usual. Two things are considered important for dispatches: adequate manpower and resources, and efficient order processing.
Peak season usually finds the industry grossly understaffed and overworked. The peak season brings complexities, for which companies and service providers must be well prepared. As the expectations for the shorter lead duration are merged with a probability of reduced operational costs and increased efficiency, it becomes important for the supply chain to push its stock for faster distribution. This signifies fulfillment of orders, cancellations, dealing with damaged goods, returns without delays. For e-Commerce companies, the delivery time of goods on average is expected to be between 7-10 days, while it is two days during non-season. For other privately operated D2C brands, the delivery time would be 5-8 days, while it is three days on the regular days.
To handle the demand, Flipkart has created more than 30,000 jobs in its supply chain logistics operations, while Amazon India has also added over 50,000 seasonal positions across its networks ahead of their respective festival sales. The same is the case with several other e-Commerce and retail giants. Also, with the incentive models, the companies will encourage the service providers to deliver more to reduce the overall delivery time.
Last mile order tracking
The moment a customer places an order there is a sudden urge in the individual to keep track of the order. It is important for businesses and their delivery partners to provide timely updates on order delivery for an improved customer experience. From shipping to the date and time of the delivery, the customer wants to know where the package with just a click is. To improve the efficiency in last-mile deliveries, Amazon announced the launch of a new version of its Delivery Service Partner (DSP) program in India that allows aspiring entrepreneurs to set up and launch their own package delivery business.
Managing customer returns
Reverse logistics is one of the very crucial elements of e-Commerce deliveries. To provide a superior experience to the customers today almost every online retail business offers the flexibility to return the orders placed at zero additional cost, but on the downside, the cost of returns adds around 7-10 per cent to the base price of the product. Hence, businesses need to choose a reliable and efficient logistics partner, who can process the customer returns seamlessly without any additional damages. In addition, compared to a traditional ground-operations-only company, a technology-enabled logistics partner will add more value by helping us visibility of the return product journey towards its origin warehouse.
The demand for technology is growing in tandem with the growth of D2C brands, and it is especially crucial during the holiday season. With our in-house Whistle Tech, we are optimising the operations and enabling seamless last-mile deliveries for several brands.