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The Last Mile Promise: When the Supply Chain Goes Phygital – From Hype to How

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Customer behaviour has changed in the post-pandemic world and today depending on what the customer expects from a brand they are shopping from, the brand or the retailer is changing their dimensions of doing business. It is all about putting forward the right supply chain, which is inclusive of a good last mile fulfilment device. Let’s hear from the experts on this to gauge more insights.

When the COVID-19 hit, digitalization became a buzzword and every sector in business started to adapt to the digital ways. Soon after the pandemic started gaining prominence the retailers with the brick and mortar stores closed down due to the curbs, taking the omni-way in this situation was the only way of doing business. But along with all other functions, the supply chain also adopted digital technologies to give a better experience to the customers. As of now with digitalization, the customers’ trends have changed drastically and the supply chain is emerging as a key to enhance the customer experience and drive heavy sales for the retailers. 

We had a session around this subject at the recently concluded Phygital Retail Convention held at Renaissance, Mumbai on the 10th and 11th November 2021. Powered by Shiprocket this session was indeed the right podium to deep dive and get expert insights about ‘last mile’. 

In the Box 

  • Session Moderator: Siju Narayan, Retail Industry Practitioner and Chief Experience Officer, Rexemptor Consult
  • Anil Menon, Head of IT, LuLu Group India
  • Anurag Saxena, CIO, BIBA
  • Atul Mehta, COO, Shiprocket
  • Gurukeerthi Gurunathan, Co-Founder & CTO, Caratlane
  • Manoj Patel, CIO, House of Anita Dongre
  • Prashant Bokil, CTO, Being Human
  • Ranjan Sharma, CIO and Head of Supply Chain, Captive eCommerce & Quality Assurance, Bestseller India
  • Satish Panchapakesan, Sr. Vice-President and Chief Information Officer, Arvind Fashions

Does the Supply chain accelerate Customer Experience?

Nowadays, CX not also depends on the end-relationship the brand makes with its customers. The customer experience doesn’t end after placing an order, the post-purchasing behavior also depends on other factors like creating a great design experience, creating delivery experience etc. Ranjan Sharma, CIO and Head of Supply Chain, captive eCommerce & Quality Assurance, Bestseller in this context said, “One of the key things to retain a customer and make them keep coming back and buying from us is the last mile post-purchase experience. We can beautifully discover all the pre-purchasing experiences, they all are durable but the post purchase experience is so much defragmenting and there are so many players contributing to that, which makes it more complex. And, if any brand is able to achieve that thing then you can retain the customer for life.” Anil Menon, Head of IT, Lulu Group, India talking about the strategies of the shopping centers stated “That’s one point which can’t be missed as now supply chain is the key but to overcome right now, there are many elements that are running around customer experiences. Earlier when you need to talk about customer experience, the question raises that Is Marketing doing a good job? But, now people have realized how the supply chain is in this whole circle of customer experience.” 

Menon believes that now the supply chain and IT has become one thing and both of the factors contribute equally to the last mile. The pandemic has made us realize that the supply chain is the backbone of the customer experience. Anurag Saxena, CIO of the brand Biba who started their journey as a departmental store but then took the form of an independent brand shared how the supply chain can enhance the customer experience “We are the brand who started our digital journey in 2014 and introduced the e-commerce platform. While identifying the right platforms for our digital journey, we also stimulated the supply chain part of the journey also. For our brand, it was difficult initially as customers were experiencing late deliveries. But after 3 years, we improved and identified the right partners and we can now deliver in 24 hours. And, through this we can give personalized attention to the customers as we have a good customer analytical space and now we can identify our regular customers so that we can give them proper attention. We have launched a luxury section on our flagship stores also to ensure that our customers gets a good and rich experience, and we identify their purchase history,  suggest to them what is required, what are their liking and disliking. So as far as our regular customers are concerned, I think they are very satisfied with us. But again, yes, challenges are always there.”

How pandemic has affected the supply chain?

The pandemic has forced brands to adopt an omnichannel approach, as now customers need everything in just one click. Digital interventions such as IoT, machine learning, blockchain, warehouse automation, and automated guided vehicles (AGVs) have leveraged the supply chain to take a digital route. But, some companies who debuted digitally understood the importance of physical stores as well and therefore to make a phygital experience of their brand for a better customer experience. Prashant Bokil, CTO, Being Human when speaking about the journey of his brand mentioned, “During the pandemic, we had made a transition from one company to another and it was very difficult for us to complete all the things in one place. And, whenever we started the entire translation we were not ready with our website also. That was one part of it, so if we talk about the last mile partner we face many issues out of it, and still, we’re learning and we’re making it more and more accurate.” Atul Mehta, COO, Shiprocket added here from the logistics company perspective and shared that the supply chain and IT are two functions, which go hand in hand. He stated “To me it is a delivery experience and it is as important as customer experience, what the customer is doing from the front-end. What experience you’re delivering to the customers is super-critical, like right of it is in the background. You see the customer coming, purchasing and auditing the metrics and giving the world-class post-delivery experience is super-critical.”  He also shared about the brands that they have partnered with “I think it’s been a journey for us in the organization and even the conversation we’re having with the brands. Brands are getting deeper into it and now want to tell customers how the goods can move faster, when it is going to get delivered, predictability, speed- a post-order engagement starts becoming important. Initially, as a brand you want your goods to be delivered but when you scale up then the brand understands that they want their customers to come back. But while growing, they see the analytics and understand if the customer is coming back or not. What was the delivery experience, what is the marketplace they’re offering?” 

Gurukeerthi Gurunathan, Co-Founder & CTO, Caratlane shared about their experience of supply chain when they started digitally initially and then decided to go the offline route as well “It’s very important for us because people buy our products for gifting, about 60% of our operational orders were for gifting purpose. So there is a lot of emotion attached to every particular order. It’s not the utility or commodity that people use, it’s more of relationship and trust-building and so on. So if you spoil that particular experience then we are actually damaging the brand reputation for two people- the person who is gifting as well as the receiver, so it is very critical for us to stay on track with delivering the right experience. We go to an extent in which we can book a flight to deliver the order at the right time. So, we don’t leave it to the last mile partners, sometimes if the dates get slipped we definitely ensure that the product reaches the customer.” 

Changes in the Customer Behaviour 

The pandemic has made all the customer experience digital, which has raised the expectations of the customers that the brands need to meet with to gain a higher engagement. The customers are shifting to value-based shopping. Manoj Patel, CIO, House of Anita Dongre said that “The idea or concept of customer experience, supply chain were already there when we all were starting our business, but now these concepts have become more prominent. Previously it was more in-store, but now it is going to the end-customer. Customer expectations have however altered over the years and today you need to be transparent to customers and tell them if you are going to deliver them in 2 days or 3 days, or if it’s not getting delivered, inform them. It makes the customer happy and they are more open to trust you. And, that helps because if your customer is happy, your business will automatically grow.” Anil Menon, Head of IT, LuLu Group India said that the customer expectations are increasing, now the brands needs to think one step ahead of the customer. Now every organization has started looking internally as one. He added further, “The digital experience that we are offering has to be taken to the next level. And how do you take it up obviously by cutting out the edges and making it finer for a customer and also make sure that you bring a feature which is unique to your brand and your customer, makes all the difference.” Gurukeerthi Gurunathan, Co-Founder & CTO, Caratlane told what their brand is doing for the betterment of customer experience “We create clusters among the pin codes, depending on where the product is located or available. As we have a dynamic network and sometimes we actually fulfill orders from various showrooms also. So, the product is not sitting in a particular warehouse. If an order gets placed in any of the online mediums, the order gets blocked from that physical storeroom. Similar to that there are various conditions that come into play.”

What is the average delivery turn-around time?

In a hyper-competitive business world, every company wants to deliver its goods as early as possible. Online retailers have been driven by customer expectations to provide faster, on-time delivery in order to remain competitive. Gurukeerthi Gurunathan, Co-Founder & CTO, Caratlane when commenting about the average delivery turn-around time said, “It actually depends on the type of product. For example a platinum product takes a much longer time and roughly anywhere between 3-12 days. Also, it depends on various factors. Usually, we do it in a matter of a few hours also if the order lies in that particular location and we’re able to commit to that. So, a lot of time we have fast deliveries and express deliveries and committed delivery and a lot of that happens in a particular region. But otherwise given a range, in terms of jewelry people are willing to wait, because these are products are not made out of the mission, but they are handcrafted.”Atul Mehta, COO, Shiprocket said from a perspective of a logistics company “I think for us the journey started off at 3 to 5 or 7 days, and then we quickly realized basis the feedbacks we were receiving that the customers want us to be more precise. So, basically as a brand, if you are using a Shiprocket platform for logistics, then we can capture the pin code of the customer as well as the location of the inventory of a particular product. We know the SLA of different courier partners, and what is going to take and hence we can tell customers on the website that they can order in these many minutes and it will get delivered in 3 days. Fundamentally, what we do is because we have that information but how we’re leveraging technology upstream in making it a part of delivery.” Ranjan Sharma, CIO and Head of Supply Chain, captive eCommerce & Quality Assurance, Bestseller India said “There are multiple ways and multiple services we can do it, there are set of customers who need it in few hours and they are ready to pay the up-charge because that’s expensive, as delivering in few hours is a value-proposition. But if there is a customer who want it few hours as they need it today, we’re building those services for them, if at all we have a store in that versatility. Omnichannel is making that available, Dark Stores are making that available, chains of stores with the partners are making that available. We’re expanding it to the Tier-II and III cities with a lot of franchise channels.” Sharma further added “But what is important is now we’re not leveraging or dependent on a few distribution centers alone, which used to be the case earlier. And that’s what is making it possible for us to deliver in a few hours or a few days, and the customer will be able to make a choice to decide where and how they want it to be delivered. As there are few customers who are okay to get it delivered by 7 days and hence it’s not the best thing for me to deliver him from Select Citywalk store or a Palladium store, which will most expensive thing for me to get it delivered v/s customer who is ready to pay a up charge and want it in few hours, as he has to attend a party in the evening, then I will make it happen from whichever store possible, as I had network and inventory available with me.” 

Satish Panchapakesan, Sr. Vice-President and Chief Information Officer, Arvind Fashions shared “The first one is inventory discoverability where we have a localized pin code view of a particular order and we decide on serviceability or we decide on a seller who’s best suited to actually service the product. Now we’ve gone to a slightly deeper view in terms of ‘can my brand actually get that particular pin code serviced through an alternate store’. By doing an inter-store transfer to ensure that the brand doesn’t lose the customer for that particular inventory not discovered by that store. But we could actually use my agile system practices in terms of how we are configured to bring in a hierarchy system and then bring the inventory quickly to a point where it can do the last mile “