Home Big Grid How third party logistics are helping brands and retailers succeed: Redseer

    How third party logistics are helping brands and retailers succeed: Redseer

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    Online retail in India has grown more than 3x in the last 4 years and is only set to be bigger in the coming years. Along with its growth and other sectors dependent on it, along the way there has also been a dynamic shift in the consumer preference and expectation from the online channel. While few years back, discounts, offers and product assortment were key factors driving customer decision to purchase from online channel, but it has now changed to digital maturity as preference of online shoppers have evolved, and they are seeking convenience related parameters such as ‘Faster Delivery’, ‘Safety & Hygienic experience’ more over discounts.

    1. Delivery experience has taken centre stage in driving consumer NPS

    Over the last one year, we have seen that while online shopping is seeing more adoption, delivery experience has become a key parameter to drive customer satisfaction. Besides delivery experience, factors better product quality, array of offerings, safer than offline, discounts among others also.

    2. Delivery being fulfilled by Captive as well as 3PL players

    Over the years, have played a key role for e-commerce to strive in India. While Captive have taken prominence, (3PL) now also plays a key role. However, the role of 3PL players differ from one vertical to another. While it contributes highly for digitally native brands (DNB) and other emerging brands, it is still low in the e-grocery and foodtech space. DNB and other traditional platforms gaining momentum online have better control on their technology and product which helps them to on-board a customer. But, owing to smaller scale, there is a definite need for partnerships with third party logistics platforms for last-mile fulfilment and with emergence of ‘Delivery’ as a key factor for driving customer satisfaction, it is imperative for these brands/platforms to provide best of the class delivery experience to drive the overall customer satisfaction.

    3. We developed Delivery Delight Index, to measure the performance of brands and platforms on this key consumer metric

    In order to understand how delivery experience differs from one vertical to another and how brands can improve their customer experience, we launched Delivery Delight Index in association with Shadowfax. This will help brands and platforms to assess their relative positioning in terms of delivery experience provided and how they can improve their delivery experience score which in turn will help them to drive customer satisfaction.

    ‘Delivery Delight Index’ has been developed after ~9,000 consumer surveys covering 34 players across four types of platforms i.e., E-tailing Marketplaces, Hyperlocal Marketplaces, Digitally Native Brands and Traditional Brands/Retailers.

    4. Emerging brands perform well in delivery, on the back of 3PL

    Platforms such as Xiaomi, Decathlon, Dunzo came out as frontrunners in their respective sectors in terms of high delivery experience satisfaction. The results are based on customer surveys and helps brands improve their NPS score which will in turn drive customer satisfaction thus reducing acquisition costs.

    As customers become more aware and comfortable with online shopping, delivery experience will become a key parameter to retain and onboard customers, hence this report unveils some invaluable insights on this competitive market.

    5. 3PLs shipments have grown by 70%+ in OND’20

    Showing a significant growth, 3PL shipments grew 70% in the month of October-December 2020 wherein it contributed 45% of the shipment volume for the e-tailing industry. 3PL shipped 750 million which was a growth of 450 million from the period of July-September2020.

    6. But, 3PL has a lot of headroom to grow in eGrocery & Foodtech
    However, 3PL has tremendous headroom to grow in eGrocery and foodtech as it completes merely 10% and 5% in the respective sectors. While 3PL has grown from 107 million shipments in July-September period in 2020, it has only grown by 2 million in the eGrocery space during the same period which shows that it has a long way ahead.