Logistics: The Wind Beneath D2C’s Wings
For the longest time, brands aspired to go online and build a closely-knit association with their consumers that enabled them to receive direct feedback and engage with them for longer. However, this seemed like a distant dream in the past of their heavy reliance on ecommerce platforms like Amazon & Flipkart that stood tall as a walled garden in between.
With the increasing coverage of the B2C logistics networks over the last few years, D2C brands today are able to bypass large ecommerce portals, reach their customers directly and maintain the same customer experience in terms of offering visibility, and timely delivery and even returning goods at will.
Much credit goes to NHAI which announced 23 new expressways covering 7800km in 2020, making last-mile delivery to many more towns and cities a possibility. No wonder shipments too jumped by over 70% in the last quarter of 2020 (Oct-Dec) according to an IANS report, owing to an increase in online shopping.
Digitisation, evidently, also emerged as the backbone of the economy during and post-pandemic era. It opened up opportunities in the ‘Bharat’ segment where first-time online consumers boomed with multiple business opportunities for D2C brands.
Prodipto Roy, CMO, Quickshift shares how streamlining logistics has enabled D2C brands to have end-to-end supply chain operations available at one click. “It has opened up avenues for product lines that never thought to be featured as products being purchased online. It has allowed the entry of many new categories and brands in personal grooming, healthy snacking, nutraceuticals, etc. that would find it difficult to get shelf space in retail shops.
It has brought down the lead times for delivery. Workflow automation has brought the entire operations in sync right from digital marketing teams to fulfilment centres to technology platforms to customer success teams,” he adds.
Beating The Blues
Experts, however, witness a plethora of challenges that perhaps need an immediate address. To begin with, in India, logistics costs are high because of the high cost of transport, lack of scale of operations, there is a lack of trained resources in the eco-system, Integration of AI-led models with similar efficiency need to be achieved in all other processes and outsourced warehousing and fulfilment services by logistics companies do not allow for standardisation in customer service experience. This can hurt the brand as well as the logistics business in the long run.
Praveen Jain, Co founder, ON- Move by Zast logistics agrees that for a B2C logistics business, dealing with D2C brands directly means managing a long tail of customers as against working with large ecommerce platforms which offer huge volume to them. “Working with multiple D2C brands means catering to their unique requirements, which could be a big challenge,” he adds.
For Niranjan Sharma Co-Founder & CEO, Kisanserv, transporting different products all together in the same vehicle is a challenging task. “Here, we need to look for loadability to optimise transport cost. In India, we face challenges to get the right size vehicle with temperature and humidity control as per production requirements in Rural areas.
Also, transportation cost in the case of fruits and vegetable transport is high compared to other products as transporter charges for reverse logistic cost also. We are trying to optimise this by connecting all our sourcing and consumption points with each other which helps to utilise vehicles which are returning back to the source,” he asserts.
Technology At Rescue
Today, any D2C brand can aspire to give as good an experience to its customer as a large ecommerce portal can offer and technology is certainly the key enabler in the process. By leveraging the tech capabilities of the B2C logistics platform, these brands can talk directly to their consumers without the hassle of constant miscommunication in a one-on-one chat environment, making the online presence of the brand highly scalable. Real-time visibility and instant communication capabilities have improved consumer experience in buying directly from the brands.
From social media channels for targeted marketing to CRM systems for exceptional customer experience, technology is helping these D2C brands achieve the next phase of growth. The right mix of technology and business disciplines has opened up a world of possibilities for the brand, allowing it to flourish exponentially.
Given that the D2C ecosystem is becoming highly competitive, data-driven decision-making is imperative for success. The use of predictive analytics backed by AI/ML will help understand the consumers' purchase behaviours and trends better. It will further maintain a healthy supply chain management and provide the consumer with what he is really looking for. It is really the time for brands to capitalise on the right opportunities, build on their tech capabilities and increase revenues.
