In the run up to the festival season that begins with Raksha Bandhan on August 18, the top three e-tailers — Flipkart, Amazon and Snapdeal — are working overtime to set in place the infrastructure that will provide users with a satisfactory online shopping experience with more hits and fewer misses, this time around.
While Flipkart, which has 17 Fulfilment Centres (FCs) with a total storage space of 5 million cubic feet, is beefing up merchandise selection in its top three “priority categories”, — mobilephones, home and fashion; rival Amazon is on an aggressive expansion spree of its fulfilment centres, with the launch of its 23rd FC at Virugambakkam in Chennai, taking its storage space to over 6 million cubic feet. This is the second of the sic FCs Amazon has invested in this year to cater to the spike in demand during the festive season. The e-commerce giant will soon have 27 FCs and a combined storage capacity of 7.5 million cubic feet.
Snapdeal has operationalised six new mega logistics hubs in Delhi-NCR, Lucknow, Hyderabad and Kolkata for the festive season, taking its count of FCs to 69 with a storage capacity of 3 million cubic feet. None of the three e-commerce companies were available for comment.
Ramping up FCs or warehouses pan India to cater to the steep rise in consumer demand during the shopping season is crucial to guarantee a consistent customer experience, especially given that during the last festive season, some of the e-commerce biggies had to bear the brunt of consumer ire due to much delayed deliveries, no-shows, fake products or empty packages that landed up at the consumer’s doorsteps.
“FCs are a way to ensure an excellent customer experience, as it allow e-tailers to exercise control on their inventory and qualityof products, ensure that returns are handled well, and ensure prompt delivery time frames,” said Sandeep Ladda, National Leader of Technology and E-commerce Sector Practice, PwC India.
Andy Frawley, CEO of Epsilon, a data-driven marketing firm that supports 15 of the top 20 global brands, observes: “Experiences shape how consumers feel about brands, including factors such as quality of products and service. The reality is, only 10 per cent of commerce is happening through e-commerce globally; 90 per cent still happens in stores, offline somewhere, which is why that consistent consumer experience between the online and offline world is so important.”
Recognising the need for consistent customer experience, all three e-tailers have hired executives with deep expertise in customer operations/experience to head the function. Flipkart hired KV Anand as Senior Vice President – Customer Experience, last March; Snapdeal hired Jayant Sood as Chief Customer Experience Officer, last April; and Amazon roped in Akshay Sahi, who was with Amazon US, to head Customer Experience in India, in January 2012, 18 months before the official launch of Amazon.in.
While most e-commerce players will offer pre-2016 discounts to keep online shoppers happy during the festive season, ensuring timely deliveries will require a ramp up in near-ship capabilities, observed Anil Kumar, founder-CEO, RedSeer Consulting. “A consumer in Bengaluru, for instance, should be serviced by an FC in a nearby location rather than from Mumbai or Delhi.” A mystery shopping audit conducted by RedSeer reveals that Snapdeal has the fastest delivery time of 3.9 days followed by Amazon at 4.1 days with Flipkart trailing at 5.1 days.
Diverse selectionHaving a large number of sellers on the marketplace ensures a diverse selection of merchandise, which online shoppers expect to see. Snapdeal has ramped up its seller count to 3,00,000, while Amazon has 1,00,000 and Flipkart has 90,000.
“Shipping goods from sellers located across the country can become a logistical nightmare. While e-tailers ramp up on FC space, they need to increase geographic spread of FCs, too,” pointed out Kumar.