Pick me up
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Major e-commerce players like Amazon, Flipkart, and Snapdeal have introduced offline collection centers to expand their reach and reduce costs. These centers, like local stores, allow customers to pick up online orders near their homes. Amazon partners with over 1,100 small shops across 50 cities as pick-up points. Flipkart and Snapdeal have also launched 10 cities networks of pick-up zones. While it addresses delivery challenges, companies must ensure quality of service at centers to maintain customer experience. In rural areas with low density, this model is particularly suitable as individual deliveries are expensive.
Pick me up
- 1. 1 PICK ME UP Offlinecollection centersarehelping major e-commerce players to expand reach & saveon costs by offering flexibility in deliveries. By Zubin Poonawalla The doorbellrings. Once, then twice. The man outsidethe door standsin wait for someoneto respond & then eventually call’s the person he’s got a special delivery for. The person on the other end of the line justasks him to leave the package with the watchman. With the proliferation of e-comerce options, the onlineorderingstruggle is real & often comes with its own hassles. And that’s one partof the story – there have been multiplecases of prank deliveriesor prank ordersbeing placed with companies online& the wait for an order on the expected delivery dateremainsa problem for customersas well. Well, some companieshave begun workingon a solution. It all started with Amazon, which first introduced the concept of offline pick-up pointsin the country. Aspartof the Amazon ‘Pick-up programme’, the company enabled over 1,100 kiranastores, 35 BPLZ In & Outstores & individualentrepreneursacrossmorethan 50 cities – includingBengaluru, Delhi, Mumbai, Hyderabad, Vellore, Nashik, Vijayawada, Thoothukudi, Thanjavur, Tiruchirappalli, Manipal, Vadodra, Salem, Ludhiana& Rajkot. By way of this programme, customers – while placing an order – can choose to get the productsdelivered atthe location nearest to them from the list of available pick-up locations. From the designated pick-up point, they can then pick their ordersor return them as per their convenienceas locations such as kiranastores, bakeries, flower shops & travel agencies. As this modelcreates a win-win situation for all, Amazon isplanning to identify & train the staff at these pick-up pointsto smoothen the transition, which in return will add to morepurchases at the store. Flipkart & Snapdealare notfar behind, if notthe first movers. Calling them experience zones, Flipkart has also launched pick-up pointsin 10 cities across the country as of October. These offlinepick-up modeladdressessome key challenges – the unavailability of customersduringdelivery attempts, restricted entry of delivery boys into IT parks, gated communities& educational institutions&
- 2. 2 customerswaiting the entire day to receive a shipment. The customer today would also appreciate VAS such as open-box delivery & instant returnsor exchange. This modelbeing test run by Flipkart is relatively new & does not cover as many touch points. It promisesto, however, offer services like – spottrials, reversepick-ups, instant return, open-boxdelivery, cash on return, exclusiveproductdemos, assisted buying& third party services such as alterations, repair & the likes. Snapdealon the other hand has announced thatthe company planned to pushthe organization through all possible channels. This is termed as ‘omni-channelpresence’by making productsavailable offlinethrough retailers. Although onlineretail is still a very small part of the overall retail consumption in India. Most retail rders happen offline, when customers feel the need to touch, feel & experience the productbefore they make the purchase. Snapdealhas tied up with Shoppers Stop as well as Herp Motocorp to be able to tie up with select outlets across the country & reach its customers better. Some key advantages aside, what are the costs that these businesses are bearing while trying to win over customers? There is the issue of high real estate prices. But, as these pick-up centers are just 500 – 1,000 sqft in size & will be located at prime properties, the companiesare unperturbed. Atsmaller locations, pick-up centers will gradually open up as & when the volumesgoes up & becomes viable. Flipkart, claims that its new delivery modelwill, in fact, reduceLMD costs by 25-30%. Besidesthis, there is also the cost of training people for all the processesinvolved & making surethe transition remains sommth. The main pointhere is to partner with the right folks & get things in order. Thus, companiesensurethat the customers experience remainsuntarnished, & the companiesare able to piggyback on their partners’infrastructureto be able to make a smooth transition. In my view, the offline pick-up modelshould ensurethe quality of service at the pick-up centre. If they don’tpay attention to this, then it could adversely affectthe consumer’sentire shoppingexperience. This delivery modelmakesthe most sense in areas with low population density, especially ruralareas, where individual
- 3. 3 deliveriesturn out to be expensive. In the lonf run, I feel larger e- commerce vendorswillpartner with large physical retail chains so that they can be used notjust for offlinepick-ups, butalso as physical extensions of online commerce. This will also help the logistics arms of the e-commerceplayerssave on last-mile deliveries, since the process is human-heavy. Havinga physicalpresence – however small though it may be – can help leverage a brand’scredibility. After all, isn’t deliveringon their promises – both literally & figuratively – the biggest challenge that e-commerce companiesface.