Logistics

For e-tailers, third-party logistics service providers take centre stage in delivering customer satisfaction

Sangeetha Chengappa Bengaluru | Updated on March 17, 2021

The preferences and expectations of online shoppers are shifting from discounts to faster delivery, safety & hygienic experience   -  The Hindu

As online retail goes mainstream, growing from 3 per cent of overall retail penetration in CY 2019 to 5 per cent in CY 2020 and estimated to reach 11 per cent at $140 billion in CY 2025, delivery will become a key differentiator for brands and platforms to improve customer satisfaction.

The preferences and expectations of digitally mature online shoppers are shifting from discounts and product assortment-led parameters to convenience such as ‘Faster Delivery’, ‘Safety & Hygienic experience.’ The emergence of digitally native brands over the last few years combined with Covid-19 pandemic has accelerated the digital journey of traditional brands and retailers. However, owing to smaller scale, there is a need for partnerships with third party logistics platforms for last-mile fulfilment, to provide best-in-class delivery experience in order to drive customer satisfaction, reveals the Delivery Delight Index by RedSeer and Shadowfax.

The Index is a result of 9,000 consumer surveys covering 34 players across four types of platform – e-tailing marketplaces, hyperlocal marketplaces, digitally native brands and traditional brands/retailers. The index measures the satisfaction of end customers for various players across two key delivery parameters – speed and experience.

Experience is further measured on seven key metrics across various legs of delivery including pre-, during- and post-delivery. The Index reveals that compared with players with high captive share of logistics, traditional retailers and digitally native brands are able to provide similar or better delivery experience by partnering with third party logistics players, which are democratising deliveries and helping them reach customers in Tier-2 plus cities.

“I foresee that five years down the line, e-commerce will evolve into maximum two-day deliveries. The index will enable a deeper understanding of customer behaviour and preferences and help brands/platforms better serve their customers. Third-party logistics will emerge as an important driver for bringing consumer delight” said Abhishek Bansal, CEO and founder, Shadowfax.

The leaders in the delivery experience, per the Index are: E-tailing Marketplaces - 1mg, Amazon and Pharmeasy; Hyperlocal Marketplaces - Amazon Pantry, Bigbasket, Dunzo, Flipkart Supermart, Grofers, Swiggy and Zomato; Traditional Brands/Retailer - Decathlon, D’Mart

Digitally Native Brands - Mi, Zivame

“This is the first time that such a comprehensive study has been undertaken in the e-commerce sector to understand where various brands and platforms stand in the overall delivery experience” said Anil Kumar, founder and CEO, RedSeer Consulting.

Published on March 18, 2021

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