E-commerce companies cater to millions of customers online and their fates rely on customer service which has only been burgeoning with customer expectations like faster or same-day deliveries, greater visibility, and tracking of the shipping process. Last mile delivery roughly would comprise 40-50 percent of the transportation costs making it the most expensive and time-consuming element of the logistics chain for any e-commerce player. Further to all of these factors is the ballooning D2C ecosystem where the last mile delivery partners become key players in enabling and improvising the overall experience for the end user. 

India saw the churn start in 2021 with Zepto birthing itself in stealth and making it to our doors with groceries in ten minutes as early as March 2022 along with Swiggy, Blinkit, and more fostering the Q-commerce space faster than ever. 

From developing new and technological frameworks to strategies that help brands thrive through the competition, we unfold the nuts and bolts of getting the last mile delivery in place and keeping the customers happy from the folks at Amazon India, Shiprocket, and Kart2Door. These experts shared their thoughts at IReC 2022.

The Last Mile Delivery Over the Years 

Amazon India has always been customer-centric and which is why it has and continues to see a successful adoption amongst the masses. Dr. Karuna Shankar Pande, Director – Last Mile Operations shares what it takes at the backend to offer a seamless, fast, and a friendly experience to a customer. 

“As a company, we’ve always worked backward from the customers trying to innovate on their behalf. For us, convenience for our customers is at the center of everything we do - the price, accuracy, selection, and speed and we see it as a combined experience where we even consider the allied products/or services that the customer would need to engage with either before or after having their product delivered.  So it’s about considering customer centricity. I know a lot has been said about speed, but convenience has many other vectors and we are only scratching the surface of introducing new ways. Over the last two years, COVID has of course forced most businesses to innovate in terms of contactless deliveries, CODs which are very high in India, how do we make unattended deliveries which are safe for delivery associates as well as the customer,” she states.

Atul Mehta, COO, Shiprocket adds, “Talking about the importance of last-mile delivery, it’s the post checkout experience where you have to keep the customer engaged for all the 3 days because he is with the brand for those 3 days. What the customer wants is very predictable and consistent performance. You can say three days and deliver it on the fourth day, but notify and deliver on the fourth day. The reason people like the experience on marketplaces like Amazon is the consistency in the end-to-end experience and performance. We need to focus on how that can be extended in the direct-to-commerce model and the ecosystem outside making the post-checkout experience as seamless. That’s where a lot of work is happening across the D2C brands. One-day deliveries and returns were not so common two years ago amongst the direct commerce players but now they’ve picked up the pace with fulfillment offerings for brands. These areas have evolved and will continue to evolve, bettering the experiences.”

While Puneet Chaturvedi, Country Head, Kart2Door talks about how as a new player, the brand is ensuring that they play a critical role for e-commerce companies, he says, “The need of the hour is technology getting into space. The last mile is important because it's the end point of the customer experience. We are a technology company doing logistics with a presence in five countries and we thought we can replicate the model in India too. We are in the sphere of doing same day to max 48 hours which is something that the customers in India are looking forward to.”

Insights, Trends, and Personalization for E-Commerce Brands 
 
According to Chaturvedi, “In terms of delivery, we are bringing a just-in-time (JIT) concept for one of our customers to have 12 o’clock as our cutoff time which is an 18-hour delivery schedule and it helps increase sales online as well as offline as we are into B2B as well as B2C segment. So the customers, as well as e-commerce players, can have their merchandise online as well as offline. It was started by Amazon many years back in the U.S. and FedEx supported that initiative.”

Evolution for D2C brands, as Mehta puts it, is about showing a promise as a brand to your end consumer. “Most of the D2C brands removing towards better control and predictability of the shipping process, the tech-enabled supply chain that offers connectivity and integration of seamless information flow and communicates that with the buyer simultaneously. For the buyer, that predictability reassures the trust in the brand's promise. It all boils down to the basics of selection, speed and pricing and how you get more predictable delivery of the product,” he shares.

The Role of Technology in Improving the Analytics of Last Mile Delivery 

We all are aware of how the global pandemic has forced and fueled e-commerce companies to deliver amidst supply shortages and increased demands. That is here to stay and increase manifolds but certainly not decrease as most Indian e-commerce companies’ growth is driven by a cohort that falls between the age group of 18-30-year-olds. All of it explains why warehouses, parcel management, and fulfillment companies need to amplify their roles over and above merely being just storage units. 

Pande says that the most critical factor is routing. It’s not only point-to-point but how you do the routing, a safe and well-defined machine learned manner so that the customer is aware throughout the process of shipment and also the delivery boys are safely able to transit through the process including the returns collections and management. This isn’t a one-time event but an ongoing process where a brand is learning how to make the process more and more accurate with time to reduce delays.

“Second is the address quality, especially when new customers start to increase on an e-commerce platform and orders start to increase. Interventions from AI, robotics, and machine learning can help brands get prompted whenever the input or selected address or pin code is faulty or the landmarks aren’t properly defined or estimated time of delivery and distance, etc. How well the work is done in determining the accuracy in address quality can determine how well a delivery happens,” she further added.

While explaining how to ensure that the delivery boys don't get lost, she says, “One, of course, is the maps, but there are also very hand-curated and machine-learned data that comes into play basis the actual delivery that is taking place. Developed countries have more accurate maps but in India, that’s not the case especially when we are talking about Tier II and III cities. Often Google Maps will miss out on the accuracy and minuscule details which require hand-curated data to be placed over and above what is visible on the map.  Address Quality Score which helps us in predictability.”

Puneet from Kart2Door shares how that’s exactly what the brand is about to introduce as a service in India –a Zomato or a Swiggy-like tracking mechanism where the customer, as well as the e-commerce brand, can track the shipment once it’s out of the warehouse until it reaches the doorstep - it’s called the Last Mile Visibility. It allows the customer to check when the package will be delivered, the total deliveries in that area, etc. 

However, Mehta talks about rarely addressed issues like unavailability of buyers, traffic, and unforeseen circumstances. “Beyond address and visibility, where technology does but can play an important role is in operations when there’s a defect and handling at scale when there are millions of shipments being attempted. There even a two percent defect would equal lakhs of defects. Operations is a business where one cannot have cent percent accuracy. In such instances, orchestrating a seamless communication with the buyer, ensuring the product is safely flown back, the delivery guy doesn’t panic, etc. - the NDR workflows as we call them are very critical, and handling them at scale makes a huge difference.”

When are Drones Delivering Innovation in India?

The technology is surely available in some shape or form. 

“The key lies in what customer problems are we solving or what is the scale at which we are doing, how are we proposing and not just symbolically doing something. Drone technology surely offers deeper and increased levels of accuracy and predictability but eventually, it all boils down to how innovative can we get on the behalf of the customer and add value,” explains Pande.

Mehta talks about leveraging technology to reduce delivery time. “From 15 days to a day or two and now same-day delivery is what consumers and brands are seeking. Buyers are expecting the ecosystem to solve for a 4-5 hours delivery which is very doable if supported by deploying the right micro-fulfillment centers, spread, replication, inventory, etc. So I feel a sharper same-day delivery is what I foresee in the near future.”

Challenges in Reducing Delivery Time

Mehta says, “At the fundamental level, I feel the challenge lies in replication - bringing the inventory closer to the buyer. Along with that, I feel being able to predict the demand - which is technology in the supply chain being able to correctly predict the demand so that brands don’t increase the costs of inventory by replicating in 40 centers. You have 3 city centers instead of one warehouse. So technology in predicting, demand and planning which giants like Amazons do really well needs to be available to emerge brands as well.”

Kart2Door seems to have cracked it already with the help of AI and ML models. In a beta version with 3 of their customers, they are catering to a cluster to solve their demand predictability 

Industry Segments that are Showing Maximum Demands

Mehta says, “There has been a surge in the rise of D2C brands across sectors. However, brands in personal care, beauty, and fashion are leading the game and standing out with high demands. In terms of region, the domination no longer is limited to Tier I and Tier II cities as Tier III is fast picking up when it comes to new cohorts of consumers, consumer behavior, traction, and preferences.”

“Post Covid and work from office resuming to normal, fashion, jewelry and ornaments is where the gravitation lies and where our customers are shipping currently,” adds Chaturvedi.

The D2C sector is here and set to bloom into a new normal with enormous support from emerging technologies and new models AI, ML, and robotics, and a lot of passion to build homegrown brands, for Indians and for the world. Here’s looking forward to India adding more products into her carts from Indian brands.