When you are doing an e-retail business in India, where the total serviceable pin codes are little over 25000, providing last mile “free” logistic is in itself a over commitment towards customers. And if you add that unimaginable cost towards reverse logistic (RTO), you will have a clear picture regarding one of the key reasons for bloodbath in e-commerce space. Whenever you search for review of any player be it new or old, one major problem that is equivocally stated is default on delivery time and state of package. Reputations and ROI on huge marketing expenditure are closely knitted with the “Wow!! Factor” that you deliver to your customer. So the million dollar question is that on what parameters you will choose your shipping partner and how they perform on these parameters. Following comparisons are based on 2 million data points (shipments) chosen from multiple e-commerce companies across all major verticals.
- COD and Prepaid Serviceability
- Top reasons stated by courier companies for RTO
- Average and 85%ile time taken by logistic partners for first delivery attempt
COD and Prepaid Serviceability
Once in a conference, I was listening to a prominent market leader stating the fact that orders from tier 2 and 3 cities are increasing at better rate when compared to metros. Major reasons stated were, the access to premium brands and authenticity of products. The question is do their logistic partners also share the same dream. Following bar graph shows the reach of major logistics partners (COD and PREPAID).
Average and 85%ile time taken by logistic partners for first delivery attempt
To benchmark the service quality of the different providers, we have compared average and 85%ile of the total time from dispatch to first delivery attempt. Clearly companies who have started as specialized ecommerce last mile delivery partners are doing significantly better over others. Companies like JAVAS, Chhotu have close to a day of average TAT for first delivery attempt and 2 days TAT for 85%ile numbers.
The data supports the emergence of localized players and their commitment towards timely delivery. At the same time among the players with greater footprint in serviceability, Bluedart is a clear winner. Most of the orders served by them were on the customer’s doorstep by 5th day.
Top reasons stated by courier companies for RTO
Now we will take a look at other important component of this discussion – RTO. Data shows that sometime people order items just for fun. This accounts for 45% of RTO. Now, here is a major grey area. Are people actually refusing to accept or my courier delivery guy never reached the address? This is tackled currently by different e-commerce player by cross checking RTO’s. Some of them are doing random calls to customer, while others ask delivery boy to arrange a call between a refusing customer and the company executive.
Established players in market like flipkart, myntra, homeshop18 and many more have taken a strong stand against this problem by setting up their own delivery network. There is minimum basket size on which free home delivery is done and they monitor the performance for every delivery. But the bigger question is, are you ranking your logistic partner frequently and for each transaction? Don’t you want to know who is a better partner when you are sending high value items via COD? Do you trust same partner with both fragile and bulkier goods?
Answer to many of the questions asked above is automation of performance monitoring and courier allocation process to the extent possible through the use of technology. There are companies in the market who now provide technology to support such automations but an important evaluation criterion should be configurability of the product according to your operations and not vice versa.
(Original Contribution by Unicommerce )