With e-commerce growing at a fast pace in India, it has become imperative for online retailers to join hands with India Post to ensure better shipment delivery. Let’s explore various possibilities and practices in how post offices are redefining the last mile customer connect for retailers.
Amazon has made a very significant announcement some days back, which is speculated to have a long-term and foundational impact on how retailers deliver their shipments. We are talking about Amazon’s pilot collaboration with India Post to leverage it as a channel for retail shipment delivery in the country.
E-commerce is a business model that, even though is currently in its maturing stages, is set to grow to a very large proportion by 2020. Obviously, this requires a modern logistics infrastructure that is not only cost effective but also highly integrated with the e-commerce company. In a competitive and margin-critical retail business model, the shipping and delivery costs currently often account 6-12 percent of the total product costs.
E-commerce retailers are building their customer logistics capabilities in multiple ways. Some are setting up their own captive logistics infrastructure; some are tying up with specialised e-commerce delivery partners, while many are partnering with existing courier companies. Though these options are satisfying the existing need, scalability and expansion are still a question. Understandably, the wish is for a logistics mechanism that provides a reach into the largest number of pin codes in India powered by a captive fleet and storage locations. What more could be an ideal candidate than the good old post office?
If an organisation whose core competence is delivering mails and packages from one location to the other at the lowest possible cost was not enough, there are also multiple advantages of a public sector behemoth with its own and extensive supply chain infrastructure and processes.
The post office in India, similar to its counterparts in most parts of the world, had been on a rapid decline. This is the most ideal time and opportunity for the private sector to be a lifesaver and establish a partnership with the post office. This will see significant investments into modernising the post office supply chain and technology infrastructure.
UK Post Office’s e-commerce service “Click and Collect” allows online retailers to offer shoppers the opportunity to order items for collection at their local post office branch.
Another example is Canada Post which has proven to be a highly credible partner to online retailers by providing a low-cost and reliable shipping option. Canada Post also provides integration with e-commerce technology platforms such as Shopify. It also deliver flyers, catalogs and other direct marketing materials to the Canadian residents.
In order to grow beyond the traditional mail business, a post office should an immense focus on its business processes and technology infrastructure. For the non-service, the post office should establish its core competence as a delivery channel. This requires creating highly robust and repeatable business processes in its core logistics areas.
The post office back-end operations should have a tight integration with the service providers. The objective is to create a transparent multichannel post office enterprise in such a way that each service provider enterprise can see its transactions and customers right through the post office operations.
About the Author:
Shijo Sunny Thomas is the industry lead for Retail & CPG at Fujitsu Consulting. He works closely with retailers in co-innovation of retail solutions for the store and the enterprise.