Shipway integrates with Shopify, Woocommerce, Magento and other ecommerce software providers, provides end-to-end automation to D2C brands and ecommerce companies
Under automation, brands can enable omnichannel post-purchase features such as order lookup, shipment tracking, faster returns request, instant refunds, and easy exchanges
Shipway claims to process 4 Mn+ shipments every month with 500+ logistics partners
What sets the D2C experience apart from shopping on ecommerce marketplaces? Is it the brand messaging that matters more or is it about the technology that is running behind the scenes in product development and distribution, or is it actually about the product quality? Some would say that while most retail brands can match these aspects, a D2C brand is set apart from the herd by the personalised nature of customer experience. This is why customer experience or CX is such a big deal in the D2C world.
Experience is not just about the purchase stage (payments and checkout) but encompasses the stages before purchase (personalisation in marketing) and post-purchase (smooth delivery and returns) as well. D2C brands want to deliver a customer experience that is not only on par with ecommerce marketplaces but actually exceeds them, with personalisation and localisation.
There are a slew of Indian tech startups enabling India’s D2C revolution with their solutions geared to enhance CX at various stages. Many offer advanced social media marketing and sales analytics, while others focus on retention, and some such as Shipway are also focussing on the post-purchase experience, which is often left to the logistics providers by D2C brands.
According to Shipway founder Gaurav Gupta, Indian brands are quickly realising the potential of how post-purchase experience can catalyse repeat orders and enable D2C brands to fulfil the need for customer delight.
Founded by Gupta and Vikas Garg in 2015, Shipway integrates with Shopify, Woocommerce, Magento and other ecommerce software providers to offer end-to-end automation of the post-purchase experience for D2C brands. It also provides analytics based on on-ground data to allow brands to improve cost efficiency in the delivery operations and improve the success rate.
While Amazon, Flipkart, Myntra, FirstCry and other marketplaces make it much easier for consumers to order and get scheduled deliveries and such, most D2C brands want to reduce the dependency on these third-party platforms and increase their margins.
“Our forte is in customer experience. We are always looking at what we can do in order to enhance the customer experience in the post-purchase phase for D2C brands. Once the order has been shipped, we come in to automate the customer experience workflows in D2C ecommerce,” the cofounder of the Gurugram-based startup said.
Under automation, brands can enable omnichannel post-purchase experience features seamlessly such as order lookup, shipment tracking, faster returns request, instant refunds, and easy exchanges — all of which are advantages that ecommerce marketplaces offer. Besides this, Shipway uses data from failed deliveries also known as returns-to-origin (RTO) to help brands mitigate revenue leakage through fake orders.
The D2C Customer Experience Conundrum
Shipway caters to D2C brands of all sizes, but its primary acquisition channel is Shopify and other such ecommerce software which have in-built app stores for services. It claims to process 4 Mn+ shipments every month with 500+ logistics partners, including FedEx, DTDC, Blue Dart, XpressBees, India Post, Shadowfax, and others.
Shipway’s plans start at $9.99 per month for 500 shipments, with bigger volumes being supported at $0.01 per shipment. It also supports international drop-shipping tracking with China Post, China EMS, Epacket, Yanwen, Yun Express, SF Express, Royal Mail, Newgistics, UBI Smart Parcel.
While deliveries from ecommerce marketplaces and D2C brands are sometimes fulfilled by the same logistics provider or last-mile fulfilment service, marketplaces with deep packers can afford the higher costs associated with returns, whereas D2C brands have to run tighter ships and therefore need to be more wary. One of the key success metrics for D2C logistics is returns-to-origin (RTO), which means a product had to be sent back to the company after multiple failed delivery attempts.
In a country like India, where many of the orders are cash-on-delivery — as per RazorPay, up to 70% of orders are still cash orders — this is one of the biggest problems plaguing ecommerce companies and hits their bottom line severely. Shipway claims to solve this and reduce the RTO by 20% on average.
With Shipway, a D2C brand can automate communication to a customer in case of the first failed delivery attempt. The subsequent attempt to deliver is only made once the customer responds to this communication. Without a response, the order is sent back after the first attempt itself, thereby helping D2C brands save costs associated with multiple attempts.
Big marketplaces can afford to burn cash on these inefficiencies, but D2C brands with their focus on margins cannot do so. Each failed attempt is like doubling the cost. The company claims up to 30% of D2C orders fail because the customer is not available to receive the delivery, particularly on COD orders.
Gupta added that communication is key because, at times, the customer is not at the delivery location for many days. In this case, the delivery partner can await confirmation for when the customer would be available and only then make an attempt, thereby lowering RTOs as well. Shipway’s communication is done through multiple digital channels such as SMS, email or WhatsApp, so the odds of getting a response from the customer are higher.
Recommended For You:
“Sometimes, it’s not about the address or availability. Sometimes the customer is just not interested in the product so they will keep avoiding the delivery. We send them a notification to check whether they are interested or not. And if the customer is not interested, there is no need for a second attempt and to increase the operational costs,” he said.
Further, based on customer behaviour in past orders, Shipway can give D2C brands the analytics to recognise repeat customers or someone who has placed many RTO orders in the past. Based on this, the company can take a priority call on the order or contact the customer before shipping the product.
Similarly, Shipway intervenes to help in return and exchange automation as well, which is another cost-intensive aspect in ecommerce. It makes it easier for customers to book returns even when the order is in transit.
“We want to bring Amazon-like experience to all D2C platforms when it comes to returns and refunds and other things associated with post-purchase experience,” the cofounder said.
D2C brands usually do not have same-day refunds as a feature since it can be expensive and task intensive. Shipway is enabling these through its omnichannel customer experience suite, which D2C brands can leverage without being solely dependent on Amazon and Flipkart.
Over the past year (March 2020 to March 2021), the company’s total customer base has grown from 6K to 12K as the number of D2C brands has skyrocketed. Shopify, which is one of the key sources of acquisition for Shipway, alone saw a 120% jump in terms of new merchants in just the first six months of 2020 compared to all of 2019.
On the back of this, Shipway’s annual revenue rate has grown from $500K to $1.5 Mn in the same period as D2C shipments increased massively in the beauty, health and wellness categories in 2020, thanks to the adoption of ecommerce platforms in the wake of the pandemic and the lockdown. The biggest contribution to the new customer base has also come from the health and wellness segment in the past year as the Covid effect shaped consumer behaviour.
This base was already growing and adopting D2C products before the pandemic. A 2019 study by Numr Research claims 33% of Indian millennials spend almost INR 4,000 per month on health and wellness products. The pandemic pushed it over the brim by most accounts.
D2C brands across categories are primarily targeting millennials and generation Z audiences that are habituated to marketplaces and familiar with online shopping. Rising adoption for native D2C platforms has increased the reliance on tools such as Shipway to offer feature and service parity.
Shipway Plans Complete End-To-End Value Addition
India’s D2C market overall has grown too, and the ecosystem enablers are facing intense competition on the back of this momentum. According to the cofounder, the biggest competition for Shipway is not major logistics players such as Shiprocket, Pidge, Shadowfax, Locus, Shipsy and others. These are solving fulfilment and logistics problems largely, whereas that may become part of Shipway’s focus in the future — at the moment, the focus is on customer experience by working through brands.
For instance, Shiprocket, which raised $27 Mn from US-based venture capitalists Tribe Capital and March Capital in February this year, offers analytics based on fulfilment data. Shipway also offers analytics to brands based on customer surveys and feedback, but largely from the point-of-view of customer experience such as rewards or discounts.
Late last month, the Gurugram-based company raised $2.5 Mn in its seed round from IndiaMART. Gupta said the publicly-listed company saw potential synergies with Shipway and vice versa, even the startup can leverage IndiaMART’s platform and expand and offer services to millions of merchants.
Gupta believes the company’s product-led approach to solving ecommerce operational hurdles can set it apart from the competition. Next on the cards is fraud detection to help brands protect their assets from fraudsters and other scammers. Gupta tells us Shipway is looking to add fraud detection through machine learning and artificial intelligence, where the system can automatically detect whether it is a genuine order. He explained that the company is planning an IVR system for automation, before the order is processed, to detect fraud based on customer history or browsing behaviour if they have that data.
Besides the post-purchase experience, it also has plans to venture into the pre-purchase value chain. Here it will go up against a slew of companies including WebEngage, Clevertap, MoEngage, Wigzo and others, so Gupta is cautious about stating a timeline. “We do have plans for marketing tools but it’s not part of the immediate plans. But we want ourselves to be in the pre and post-purchase customer experience space.”
With the capital raise, the startup is looking to expand its product portfolio, improve recommendations and insights to its clients from the customer experience perspective, increase its team strength, and scale up its partnerships with third-party logistics players.
Since 2014, some of the notable segments in D2C that witnessed a spike in investments include fashion & cosmetics, home decor, consumer electronics, and FMCG among others. Inc42 Plus stated that fashion brands secured the maximum funding, accounting for almost $876.2 Mn in funding between 2014 and Q3 2020. The D2C fashion brands include Fablestreet, Clovia, Bewakoof, Lenskart and Bombay Shirt Company among others.
One of the core reasons for investors’ affinity towards the D2C category clearly points at the fragmented nature of the consumer base, giving room to both small, niche, and large players to exist. And as the market expands, the ceiling for ecommerce enablers is only going to rise.
May 18, 2021 | 15:20
The company’s annual revenue rate has been revised after publishing