“The only constant in life is change,” said Greek philosopher Heraclitus. And many times, change can be quick. Take, for instance, the direct-to-consumer (D2C) brands from India’s startup ecosystem. Although D2C brands like Noise, Forest Essentials and their ilk had been around for quite some time, the onset of the Covid-19 pandemic in early 2020 and subsequent nationwide lockdowns helped the D2C segment expand to untapped markets (and new pin codes).

As the pandemic pushed consumers to all sorts of online transactions for the sake of safety and convenience, all consumer-facing categories turned to digital commerce in droves, and their businesses multiplied. The D2C space in India currently boasts more than 50K digital native brands across industry segments, including FMCG, fashion, beauty and personal care, consumer electronics and more, according to an Inc42 report. The market opportunity is also set to cross $300 Bn by 2030, growing at a CAGR of 24% during 2021-2030.

Despite the shift in consumer mindset, online shoppers are now more demanding, looking for a variety of premium services like personalised shopping, always-on customer communications, fast shipping, zero delivery charges, hassle-free return/exchange policy and speedy grievance redressal, resulting in a seamless customer experience (CX). 

Interestingly, fast shipping has become a competitive differentiator due to the fast-paced lifestyle of Indian consumers and the rise of convenience-oriented business models already introduced by ecommerce giants and quick commerce companies. 

With Amazon offering same-day delivery and next-day delivery (SDD and NDD) options as value-added services, these are now emerging as the next battleground for enhancing CX, and D2C brands must adopt the same, according to Gaurav Mangla, cofounder and CEO of Pickrr, a third-party logistics (3PL) player leveraging AI-ML for optimises services.

Set up in 2015 by Rhitiman Majumder, Mangla and Ankit Kaushik, Pickrr was acquired by Shiprocket in 2022. 

“SDD and NDD, which involve fulfilling orders within 24-48 hours post a transaction, are the most sought-after services in the Indian D2C market today,” said Mangla. “Not only do they drive higher sales and revenue, but they also play a key role in improving CX.”

Delivery Speed Vs Roadblocks

In the past, customers were satisfied with the standard delivery window of three to seven business days. But with Amazon’s Prime service offering ultra-fast one-day/two-day delivery, consumers today have higher expectations from their favourite D2C brands.

Prompt deliveries will also remove friction around long wait periods. As buyers only have to wait up to 24-48 hours, there are fewer order cancellations due to poor customer care, information gaps or better deals popping up elsewhere. Additionally, successful SDD/NDD leads to high CX score, enhanced brand loyalty and better retention rates, asserted Mangla.

While a retention rate surpassing the industry average reduces customer acquisition costs (CAC), high CX yields even more benefits. A 2022 SuperOffice report states that companies/brands with a 10/10 CX score have witnessed buyers spend 140% more and remain loyal for up to six years.

Industry data also indicates fast shipping is no fad. India’s SDD market is projected to surpass $10 Bn by 2028 at a CAGR of 23.6%, a 2023 report by Market Data Forecast states.

However, ensuring SDD/NDD can be challenging for D2C brands. It will increase last-mile delivery costs, while the limited number of fulfilment centres will lead to longer distances and travel times. Automating the entire order allocation process is also required to streamline operations and save time. Finally, issues may crop up regarding scaling, fleet and route optimisation and real-time order tracking.

This is where 3PL players like Pickrr can leverage techvantages to help D2C brands fulfil customer expectations and beat the competition.

“Pickrr’s custom SaaS offerings and end-to-end logistics management help orchestrate and optimise SDD/NDD without increasing operational costs or impacting efficiencies,” said Mangla. “It enables delightful customer experiences, while the interactive dashboard allows sellers (read D2C brands) to have complete visibility and control over their SDD/NDD orders.”

The 3PL’s core offerings in the SDD/NDD space include automated driver allocation and driver slot management, dynamic en route order clubbing, live order tracking, KPI benchmarking and more, added Mangla.

Tackling Logistics Hiccups In Tier 2 And Beyond 

Indian D2C brands initially targeted Tier 1 markets, but industry experts believe that the next phase of growth will be led by consumers from Bharat – shoppers hailing from Tier 2 locations and beyond.

According to Amazon India, 80% of its new customers came from Tier 2 and 3 cities during last year’s festive season. A 2022 RedSeer study also states these regions may account for 88% of the online shoppers between 2020 and 2030. Going by these trends, brands looking to capitalise on these emerging markets must act fast. 

But this is easier said than done. 

If ensuring SDD/NDD in metro cities is tough, implementing it in non-metros will be even more challenging for D2C brands and logistic providers. According to Mangla, key hurdles will include address tracking, managing longer distances from warehouses, greater reliance on regional and independent courier partners and the absence of technology-enabled last-mile delivery solutions.

“To help D2C brands achieve SDD/NDD in Tier 2 locations and beyond, Pickrr has set up fulfilment centres in more than 30 locations across India,” said Mangla. He claimed that warehouses at these strategic locations could help brands reduce transportation costs and delivery time by 30-40%. 

“Moreover, to minimise order congestion, Pickrr now collaborates with various regional courier partners and ensures that orders are dispatched and delivered within deadlines,” he added.

Here is a case in point. Although Mangla did not disclose the brand’s name, he recounted how the 3PL player helped a beauty and skincare unicorn (with 800+ SKUs) fulfil its SDD/NDD aspirations.

The key concerns included multiple escalations regarding pickups and deliveries, as the brand’s delivery partners struggled to meet customer expectations. In addition, the D2C unicorn wanted to maintain a turnaround time (TAT) of 24 hours or less for ship-to-attempt (S2A), improve its first attempt strike rate (FASR) by 85% and convert 10% of the overall NDRs to successful deliveries.

For context, S2A refers to the time between shipping and the first delivery attempt. On the other hand, an NDR, or non-delivery report, details an order not delivered and the reason for its non-delivery.

“With Pickrr’s SDD/NDD services, the brand was able to optimise S2A to 0.8 days (about 19 hours), achieve a whopping 81% FASR and convert 93% of NDRs into successful deliveries,” said Majumder. “Moreover, any customer dispute regarding pickup and delivery is now resolved within 48 hours.”

Why Logistics Will Continue To Drive D2C Growth In Post-Pandemic Times

During the Covid-19 pandemic, India saw a massive surge in D2C brands. As online shopping continues to gain momentum even in post-pandemic times, it is now evident that the success of the homegrown D2C ecosystem lies in delivering a seamless CX at every step, with logistics playing a central role.  

Consider this. India will be home to 1.3 Bn+ internet users and 500 Mn online shoppers by 2030, according to an Inc42 report. The total addressable market of the country’s ecommerce is estimated to reach $400 Bn by that time, with the D2C market expected to hit $300 Bn, accounting for 70% of online retail. New and established D2C brands must explore emerging markets across Bharat or rural, remote and non-metro regions to script this growth story.

However, D2Cs will likely face growth challenges to attain this scale and customer base.  

To begin with, non-urban shoppers will also look for premium services like their urban counterparts, especially when it comes to cost-efficient/free shipping, fast shipping and convenient delivery – when, how and to whom a product should be delivered. A failure to meet these logistics demands may soon turn off the newfound sales funnel and growth opportunity. 

Of course, choosing a robust, reliable and tech-driven 3PL partner like Pickrr can help brands provide a smooth CX without spending a bomb. Logistics today is all about analytics and data technology, based on which shipping costs can be reduced and a high level of customer satisfaction can be achieved.

Besides, CoD (cash on delivery) will continue as a popular transaction model, which means one must leverage logistics tech for risk detection (through insights into customer demographics) and preventive measures to minimise RTOs. This will be all the more applicable for rural and remote India not too fond of digital payments.

In simple terms, D2C brands will require a tech-driven, efficient logistics game plan when prospects become customers, and dispatch and delivery issues shift to the physical world.

“Brands should also focus on refining their last-mile deliveries with tech, but customers will still expect a human touch,” said Mangla.        

Meanwhile, in a market increasingly dominated by tech-savvy, convenience-first customers, digital-native D2C brands and 3PL providers can be partners in growth to stand tall and leap ahead of the competition.