India has been witnessing a surge in online selling over the last few years fuelled by over 750 million internet users. The stringent lockdown conditions in the last 12 months have only increased its significance owing to restricted movement. Increased internet penetration and changing consumer behavior patterns have led to disruption in the Direct-To-Consumer (D2C) space which has led to a 25 percent y-o-y growth and clearly, makes us aware that this trend is here to stay.
The D2C approach comes with its merits - better reach and communication with your target audience removing the impact of middlemen in the seller-buyer relationship. This is why brands are only getting keener to dive deeper into this ecosystem and constantly look at ways of enhancing their customer’s experience. Considering this trend is at a nascent stage, D2C only brands amount to more than 1,000 in India currently and is expected to grow exponentially over the next 5 years.
The pandemic had adverse consequences for most with social distancing norms and restricted movement at shopping centers putting the relevance of retail in question. However, this has also presented an opportunity for D2C brands aiming to make a connection with their customers directly. With increased focus on digital advertising on social media and better control on profitability, brands have found a way to make their business impactful and successful at the same time.
But this opportunity is laced with its own set of challenges mainly with respect to order fulfillment. Brands are constantly grappling with challenges such as:
● Inventory Management at Scale: Poor inventory control can have a huge impact on your cost management as your stock keeps piling inside your warehouse but is not being shown to your customers for purchase.
● Efficient Order Processing: Once an order is received, a huge cost leakage can occur if order processing is inefficient and slow. This reduces the trust a customer has in your product and tarnishes the customer experience.
● Timely Dispatches: Managing multiple tasks at once can be daunting and can disrupt your order dispatch time. This parameter alone can turn your customer off and makes his move to your competitor very likely.
● Last-Mile Order Tracking: Managing last-mile deliveries through multiple courier partners and customer care teams needs to be seamless and proactive which can be difficult to maintain.
● Post-Purchase Customer Experience: Customers will always be wanting to engage post receiving the products for any return, replacement, grievances, or feedback that can make or break their trust in your brand.
● Managing Customer Returns: If a return is initiated, the product has to be inward, checked for quality, and re-stocked for sale if the product is fine. This needs a lot of attention and can easily create confusion at the backend of your warehouse.
This is where outsourcing order fulfillment to an expert can be of great help. Having the retail fulfillment infrastructure and technology in place can help you better manage logistics. For instance, automatically processing orders that are placed on your online store can help verify order information, including the shipping address, before it is sent to your fulfillment team to pick, pack and ship. Not only speed is a priority but order accuracy also has a significant impact. This has led to a renewed focus on a single interface solution that manages all the operations seamlessly and in an efficient manner.
Investing in automation tools and systems can be costly. However, that doesn’t mean there isn’t a solution. If your business is at a stage when you can’t keep up with your current monthly order volume, the best option is to outsource fulfillment to a third-party logistics company that can integrate with the shopping carts, shipping partners, and customer care teams.
This interface empowers brands to gain full control of their business operations through a computer screen allowing them to focus on their core functions. They are able to focus better on their core product and brand communication to shape their long-term goals. Automation plays a significant role in improving logistics management. Automating parts of the supply chain, from order processing to shipping, can help reduce manual work, aggregate data, and insights, improve speed and accuracy, and provide more visibility into the entire supply chain. The success of D2C brands, therefore, depends a lot on tech-enabled fulfillment: A de facto combination for entire e-commerce fulfillment.