With the accelerated growth of the ecommerce segment during the pandemic, it has become an attractive sales channel for businesses
As new businesses enter ecommerce and D2C segments, they have to cope with various logistics challenges
Inc42 caught up with Mangla to discuss the role of enablers in reducing logistics barriers and helping brands in scaling efficiently
The rise of ecommerce in India has presented a lucrative opportunity for small and medium enterprises (SMEs) dealing in consumer goods. The Covid-19 pandemic and subsequent lockdowns further drove the ecommerce industry as it increased the consumer adoption of digital channels for shopping. With more than 100 Mn online shoppers, there is a lot of trust for businesses looking towards ecommerce to scale and grow and many have already started selling their products online.
Amazon India highlighted this mass transition of businesses to ecommerce in a recent announcement. According to the marketplace giant that reached the 1 Mn seller mark on its platform in December 2021, it onboarded 450K sellers in the past two years.
But marketplaces are not the only entry point for ecommerce sellers. The pandemic has also brought to the fore the D2C segment, where businesses sell on their dedicated websites for greater profit margins and better control over customer engagement. The D2C segment has also grown considerably in a short period of time and presents a huge opportunity for mature ecommerce players. According to a report by Inc42, the total addressable market in the D2C space has nearly increased from $26.8 Bn in 2019 to $44.6 Bn in 2021.
Despite the ‘newfound’ opportunities, the challenges are many for new entrants. From procurement and manufacturing to marketing and sales, logistics and customer engagement, there are plenty of critical operations to manage and optimise to run a D2C business efficiently.
To solve the operational challenges faced by new-age, digital-first brands, ‘enablers’ like Wix (offers platforming solutions), WebEngage (a martech platform), Pickrr (a third-party logistics platform) and many more companies are developing specific solutions to help accelerate India’s D2C economy.
“Today, D2C brands just need to focus on building the right products and creating brand stories to get consumers’ attention. Everything else can be outsourced to ecommerce enablers. This is an opportunity that enables almost anyone to build a brand and start selling, which was not possible even three years ago,” said Gaurav Mangla, cofounder and CEO, Pickrr.
Pickrr has developed a wide range of logistics solutions powered by big data, artificial intelligence (AI) and machine learning (ML) to help SMEs with speed and accuracy in delivery fulfilment. Set up in 2015 by Gaurav Mangla (CEO), Ankit Kaushik (COO) and Rhitiman Majumder (CMO), the Gurugram-based 3PL startup works with more than 75K ecommerce and D2C brands and claims to deliver 3 Mn shipments per month.
Here are the edited excerpts from our interaction with Gaurav Mangla as the CEO talks about the entry of small and medium businesses in the ecommerce space and how new-age logistics players can drive these brands’ growth through a robust delivery system and the subsequent customer retention.
Inc42: What are the key challenges businesses face in logistics management?
Gaurav Mangla: Logistics has always been a crucial operation. It is because marketing and customer experience directly impact conversion, but the post-purchase experience drives retention. Logistics management comes with many levers, including inventory management, warehousing, transportation and last-mile delivery. One of the major challenges is coordinating these components while maintaining the speed and accuracy in fulfilling orders.
The next thing is creating visibility. Brands need to track every order to know precisely where the consignment is and communicate it to the customer.
Finally, the biggest challenge is to deliver orders faster. If a brand cannot deliver a product within 48 hours in Tier 1 or Tier 2 cities, people would prefer to buy on Amazon or Flipkart (as they have guaranteed delivery slots). Turnaround time in logistics is one of the most critical metrics that can turn customers into brand loyalists or see them visit just once and never return for repeat business.
Inc42: What should be the top three priorities for brands when it comes to logistics?
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Gaurav Mangla: Customer Satisfaction (CSat), should be the first priority for every D2C brand when it comes to logistics management. It is important to engage with the customer and ensure that the brand is meeting their expectations, this can be done through engaging messaging and initiatives, branding and more. Reducing operational costs can also play a significant role here. It’s because at the end of the day, any extra cost will increase the overall price of a product. This can easily turn customers away if the competition offers more affordable rates.
The next priority should be bringing more accuracy and speed to the workflow. Fast shipping and order accuracy matter most in the world of logistics. But that can only be achieved when warehousing, transportation and last-mile delivery work in sync.
Next comes building processes and tools for better stock management and demand prediction. These help in ensuring smart warehousing — making the operations more efficient — allowing the brands to make 1-2 day deliveries and stay prepared for demand surges.
Inc42: How can a 3PL company like Pickrr help D2C brands solve these challenges and scale?
Gaurav Mangla: At Pickrr, we have built an end-to-end logistics tech stack to bring speed and accuracy to order fulfilment. All our sellers have full access to this platform, where they can choose their courier partners for each pincode. We work with more than 20 delivery partners and list their performances across key outcomes as well as prices to help brands make informed decisions. Moreover, a recommendation tool helps them pick the fastest or the most affordable options.
The platform further displays the live status of each order for the convenience of the brand. Plus, timely updates are sent to end customers to maintain transparency. We also notify end customers about transit delays besides pickup and last-mile delivery information.
We believe that 3PL players like us play a crucial role in building a seamless post-purchase experience for a brand. This is directly linked to the net promoter score (an indicator of how likely a customer is to recommend a brand or its products), and we take that responsibility very seriously.
At present, we have more than 13 fulfilment centres across the country through which we can deliver 70% of the orders within 24 hours.
Inc42: In India, the majority of SMEs lack tech awareness. How do you create a seamless onboarding experience for them?
Gaurav Mangla: We have an excellent customer support team and key account managers who assist businesses from Day One. We help all our sellers with a thorough walkthrough of the platform. Also, the dashboard is well equipped with all relevant videos for the users to understand the platform’s functionality and they can refer to the same anytime.
Our key account managers are always in touch with the businesses and resolve issues at their end. We regularly communicate with every brand with whom we work to understand its specific needs and help it with customised solutions.
Inc42: D2C brands are now tapping into Tier 2 and Tier 3 markets. How do you help brands deliver orders to those locations and build a positive experience for end customers?
Gaurav Mangla: One of the primary reasons brands struggle to expand to Tier 2 and Tier 3 cities is the logistics barriers. Consumer behaviour in those locations is quite different from what we see in Tier 1 cities. First, there is a lot of impulse buying in those markets. So, if a brand takes a long time to deliver an order, the shopper often changes his mind and refuses to accept it, thus leading to an RTO (return to origin). We work with a lot of local courier services to ensure this does not happen. This is one of the key focus areas of our fulfillment centers across India.
Second, these consumers prefer cash-on-delivery (COD) over online payments due to lack of trust. Essentially, they do not like to pay for a product before receiving it. So, any business aiming to tap into these markets should be willing to accept COD orders and reduce the delivery time.
We have built all our solutions to help the sellers understand the various aspects of the market. For instance, we have Pickrr select, which allows brands to select partners of their preference and budget in a particular area, Pickrr Connect that helps sellers to engage and stay in touch with the end consumers at every step and Pickrr Predict which helps them identify high-risk zones to ensure better decision making.
At Pickrr, we keep the delivery time to a minimum for both COD and prepaid orders. We have also improved our last-mile efficiency and we will continue to enhance customer experience at every step.