Free Press Journal

Retailers ramping up, logistics is their big bet

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Any general, they say is only as good as his army. And anyone will tell you that a war is a-brewing. The war we speak of, is of course for dominance in the e-commerce space. With billions of dollars being poured into e-tail, there’s little wonder why leading e-commerce operators are bullish about future prospects. Heli Ranjan, an independent market research analyst surmises that in the next three years alone, there will be an exponential growth in the e-commerce space, with logistics contributing handsomely to the growth.

Almost corroborating Heli’s view, is the recent ‘Manpower Employment Outlook Survey’ which states that internationally Indian retailers are looking to ramp up employment and recruitment with the expectation of increased business. According to the report, almost 41% of Indian employers are looking to hire employees in this month of the year, as against last year. The biggest increase numbers wise is being plotted in retail, across logistics, supply chain and transportation.

E-Retailers bullish:

“Have you seen the latest Airtel ad”, asks Chirag ‘Champ’ Alreja, one of the directors of popular novelties website Hitplay, “with unlimited 4G not too far away, I predict that there is definitely going to be a boom in the number of high speed, mobile internet connections that are going to be availed of in the country. This simply means a greater number of potential customers from far off regions of the land. Which can only mean one thing, a greater volume of business. And 100% of the e-commerce business depends on order fulfilment, which emphasizes the importance of logistics, transportation and delivery.”


With the official festive season kicked off by the popular ‘Ganesh Chaturthi’, what follows can only be described as the annual gold rush of the retail trade. In fact predictions are that this year, nearly 20 percent of e-commerce’s $25 billion in revenues (i.e. nearly $4 billion) will be generated in the period between now and December. Since e-commerce stands to gain a whole lot, it has bet in a big way on logistics. This ‘bet’ includes mass recruitment in large numbers across verticals in the logistics space. Take for instance ShopClues’ decision to add nearly 1200 new members to its 800 existing staff. Snapdeal too is expected to add 2500 new faces to its existing tally of 2500 employees.

Sahil Dalal of Ahmedabad based groceries superstore, myonsto says, “we have always been committed to order fulfilment. This is why we have always recruited the best possible delivery specialists to ensure that all our customers purchases reach them within a stipulated delivery time. We are proud to say that very few, if any at all are ever missed out.” Other business owners and e-commerce operators agree with Sahil’s view and stress on the final step in the customer delight spectrum, that is order fulfilment and prompt deliveries.

The true importance of delivery and logistics to e-commerce

To illustrate the importance of delivery, distribution and e-commerce, the following excerpt from a guest post written by Melissa Sawyer, a deliveries and e-commerce consultant is extremely pertinent.

“For it to be viable for customers to shop online instead of at a brick and mortar store, the online experience needs to be convenient and practical – more so than using the physical store. In many cases, this will manifest in the form of cheaper products and a wider variety of stock than a small store could offer. However, the strength of a brick and mortar store will always be that the customer leaves with the stock then and there. The item is theirs immediately, without any further delay. Shoppers are willing to wait for their items only if the online shopping experience is easy and free of complications.”

The above excerpt amply demonstrates the importance of timely deliveries for the hassle free customer experience that is so important for the sustained success of an e-commerce portal. Only and only when a customer is assured that their deliveries are going to reach them in a timely, trackable manner, will they finally go ahead and click the buy tab. What’s even more important from the standpoint of the e-commerce portals is that every consumer transaction ends in timely, hassle free delivery. Relying on the right logistics partner is the key. In the words of Jeff Bezos, “life is too short to be hanging out with people who aren’t resourceful.” The same is true of logistics partners in a connected e-retail context. The sustained growth of e-commerce is directly proportional to the growth, development and evolution of logistics.

Little wonder then that in this season of plenty, logistics providers are also ramping up their delivery offerings in order to make the most of it. Says an insider at a logistics bigwig, “in a season that is going to be worth 25 billion dollars, there is no way we can stay aloof from the action. We began ramping up months ago. Even right now, there are new positions being created and filled as we speak.. There are order fulfilments being planned months in advance, based on predictive data models, that have been instituted based on big data that has been captured months in advance. This then has been used to set up the requisite infrastructure that would be needed to deliver the best possible results for their gold rush.”

E-commerce speaks:

If one needs proof that e-commerce and logistics were probably the most complementary, symbiotic industries out there. All you need do is spend a few minutes with CEOs of both e-commerce dotcoms and delivery chain operators and this mutual respect becomes clear as daylight.

“We have always believed that deliveries are a cornerstone of success in business. After all only when a customer finally receives a parcel, does the e-commerce experience finally become real. We understand the immense importance of deliveries to our business and we make sure that we have an extremely high rate of successful deliveries. We go to the extent of partnering with multiple delivery companies to ensure that order fulfilment is prompt and done with the least amount of hassle as possible,” says Sahil Dalal of Myonsto. “Being in the business of daily needs and groceries, our needs are also highly specialised. This means that our partners need to be equipped with all that is needed for our deliveries to reach fresh and undamaged. Thus far we’ve received very few complaints on the standard of deliveries and services we offer,” he beams.

Santosh Naik, a divisional manager with one of the most sought after Logistics Company says, “all of us are extremely aware of the importance of the upcoming season and we understand that our contribution is of vital to the enduring success of the e-commerce business verticals in the country. As partners, the e-commerce companies are extremely cooperative with our requirements. The consignments are always packed as per our specifications and marked clearly with precise addresses for error free delivery. Most of all however, we are continuously surprised and delighted by the fact that these companies are extensively using big data analytics to predict customer behavior and in many ways are giving us better estimated numbers; which just a few years ago was virtually unheard of.”

Being complementary industries it is but obvious that e-commerce and logistics are interdependent on each other for their growth. However a growing school of thought also makes a case for e-commerce companies to internalise the function, in order to minimise overheads. “Think about it,” says economics professor Theresa Rana, “in the long run, the only way a business may remain profitable is to internalise most overheads. I wouldn’t be surprised if e-commerce companies themselves instituted logistics and delivery departments. With discounting being the primary way e-commerce companies need to minimise the overheads they are facing and very soon this will cause more and more online retailers to jump on the logitics bandwagon.

Conclusion:

Whether or not the complementary nature of e-commerce and logistics continues for a long time, as of now they are as Chirag Alreja of Hitplay Devices rightly says, “absolutely critical” to the enduring success of e-tail. Little wonder then why most online stores are betting their season of plenty on these providers.