E-commerce in India—though growing rapidly—is still in its nascent phase. People like me (not the early adopters) have moved from ‘skeptical’ to ‘comfortable’ when buying online. The motivators that took us to an online store (an ‘e-tailer’ for our purposes here) from a brick-and-mortar store were heavy discounts, convenience of sitting at home and shopping, available reviews of products, ease of comparing products, ease of returns, and time to think and buy instead of impulse buying to name a few. Lost in the process, however, were the ability to touch and feel the product before buying, and that immediate satisfaction/happiness when I pay for something and get right then without any time delay. Well, we are smart enough to overcome the first issue (more often than not) by visiting some mall over the weekend, have a look at that phone or that shoe or that wrist watch that we intend to buy, and come out of the store and order it right then through our smart phones. And that’s it; we are done. The item will be delivered to our door step. But wait… this might take its own sweet time. Depending on our location and the online retailer’s warehouse, we might get the item somewhere between 3 to 15 days, or even longer. Now in this cut throat competition world of e-tailing, the top dogs have come up with the concepts of same day delivery’. Recently Amazon and Flipkart have launched ‘Amazon Now’ and ‘Flipkart Nearby’ respectively which promise a delivery within a few hours. Sounds crazy? Not really. Let’s see how it’s possible.
How do they do it?
Same day delivery (or delivery within a few hours) is easier said than done. The e-tailers will probably need a separate supply chain which works on minimal lead time at every node. Among other things, the e-tailer must have – 1) a highly efficient team that understands and plans according to the customers’ buying pattern; 2) a smart warehouse; and 3) swift logistics partners:
Needless to say that it will need a lot of financial muscle for the e-tailer to build and then sustain this model. The product category has to be such that it requires less space and fetches high margin to the e-tailer. Price point cannot stay as competitive as it was before. But as they say “no pain = no gain.”
Will it really work?
For same day delivery, all the components involved in the new supply chain model have to work like an orchestra and produce a symphony. If any link in this chain gets broken the e-tailer will be unable to live up to its delivery promise. This results in an unhappy customer, and a few unhappy customers in this internet enabled world may hurt the e-tailer’s brand image. So after putting in so much effort, after investing in getting the infrastructure set up, the e-tailer still risks its brand image by promising something that it may not always control, i.e. delivering products within a few hours. One needs to understand that this is way different from a ’30-minute pizza delivery’ because of the many variables involved.
And for a moment let us assume that the orchestra is in sync and producing a beautiful symphony. Are the end users in India – or anywhere else – ready to pay more to get the product on the same day? I’m not so sure. While it might be a great idea to beat the competition with fast delivery, there are things that attract Indian, and many other customers more than faster service, like more discounts!
How can JDA help you?
While same-day delivery is not in the cards for every retailer, JDA can help you make intelligent and profitable fulfillment decisions to achieve success. Solving your inventory planning, replenishment and order fulfillment challenges has never been easier! Contact us today to find out if JDA’s Intelligent Fulfillment solution is right for you.