How Mebelkart is shifting from traditional to hyperlocal model to expedite delivery mechanism?

Retailer Media caught up with Rahul Agarwal to understand the dynamics of quick deliveries and how it has made an impact on the millennial consumers.
Rahul Agrawal, Co-Founder & CEO, Mebelkart

In today’s vibrant online retailing scenario, delivery has become one of the key factors in defining the future of the eCommerce industry as a whole. Today economics of every retail business, be it online or offline, is measured on its logistics and delivery system.

As the millennial consumers want products/ services in short timelines, the supply chain management and logistics skirmish is just getting bigger and serving the consumer in a better way. Many eCommerce companies have altered their logistics and supply chain mechanism to provide consumers with a seamless online shopping experience.

List of such companies also include the online furniture retailer Mebelkart. Retailer Media caught up with company’s Co-Founder and CEO, Rahul Agarwal to understand the dynamics of quick deliveries and how it has made an impact on the millennial consumers.

Share with us some recent trends of eCommerce logistics and delivery mechanism?
It is interesting to note that as per KPMG’s report titled ‘Fulfilled!’ the logistics sector in India specific to eCommerce retailing alone was valued at $0.2 billion in 2014 and is expected to reach $2.2 billion by 2020, thereby witnessing a CAGR of 48 per cent during this period.  The same report goes on to add that the e-commerce retail returns are as high as 20 per cent which include returns on account of logistics failure and also customer initiated returns.

Why have you started focusing on the hyperlocal delivery models?
To cut down the return costs and to ensure a seamless delivery mechanism we at Mebelkart are betting big on a hyperlocal delivery model which we believe is the way forward in the space we operate in. The merits of hyperlocal furniture delivery are twofold. On the one hand, we are ensuring speedier delivery to our customers and on the other hand we are nurturing an ecosystem of local sellers to address the order requests emanating from the same region.

Being a furniture retailer, what all it takes to provide a seamless delivery experience?
A seamless delivery experience is not just ensuring the dispatch of Product X from Point A to Point B in the shortest possible time. It is way beyond that. As the country’s leading online furniture retailer, we realise this and have put a lot of emphasis in ensuring our delivery processes are shipshape to offer the best experience to our customers. At Mebelkart, we invest a lot in the various aspects of the supply chain from procurement, quality checking, storage, packaging, dispatch (last-mile), to even handling returns to the satisfaction of our customers.

Why a lot of online retailers have started their own logistics wing despite having a bunch of quality solution providers in the market?
There is no end to this debate on keeping the logistics aspects in-house versus outsourcing it to an LSP. I believe it is a matter of personal choice and what works well for an organization should be doneand of course keeping the customer interest as supreme.Logistics is one critical aspect of the business where you can make or break the brand. It is therefore essential for any furniture e-retailer to ensure that logistics is handled well, even if it is outsourced it can still be monitored and gaps addressed.

What are the major roadblocks when it comes to same day delivery?
We have recently invested a lot of time and effort in moving towards localization of supply. That is bringing onboard local manufacturers and suppliers of quality furniture products and serving the local buyers from this pool of local sellers. We tested out the efficiency of this model in Bangalore recently through a pilot program which led to delivery time cutting down to just 2-3 days. Hyperlocal, we believe, is the way forward to ensure a wow customer experience. We are gradually transitioning from a national model to a hyperlocal model which is far more efficient. Same Day Delivery for a heavy goods category like furniture is still a distant dream. We don’t want to announce it yet without doing the groundwork first. We believe that the hyperlocal business model that we are transitioning to will eventually expedite the delivery mechanism and who knows we might see a day where same day delivery is made possible.

Future retrospection
Ours is a dynamic industry where the future is hard to predict. Having said that, I believe we have a well-researched business model which is sustainable and adaptive to the changing times. We have a team of go-getters who can deliver the goods for us in the future as well.

Rahul Agarwal