It’s Diwali season, which means brands are going full throttle at sales, discounts and marketing strategies to join the gifting boom. While festival shopping isn’t a new concept around the world, markets like India provide unprecedented scale owing to their high population. Riding high on the e-commerce wave, brands gear up every year to bring literal ‘festivals’ to the consumers straight through their devices. While this spells good for business overall, it also brings an unfathomable amount of stress to the backbone of trade, Logistics.
During what is considered the most extravagant celebration of the year, Logistics firms are engaged to the tee, with handling capacities stretching beyond their given constraints, but in India, it’s business as usual. Last year alone, the two biggest e-tailers averaged about 3 million units of shipments per day during a 5 day Diwali sale. This clearly calls for contingencies that tackle sever bottlenecks slated to happen. A recent repost by Numadic Transport solutions mentioned that Amazon extended it’s handling capacity by 100%, doubling it’s storage and logistics capacity to 13 million cubic feet and it’s reseller base to about 2.2 Lakhs. Such a serious financial and operational commitment to infrastructure, during a financial period riddled with GST reforms and demonetisation tells you the sheer importance of Logistics preparations in the festival phase.
In this context, last mile delivery has been the bone of contention for many manufacturers and retailers. Due to the meteoric rise of e-commerce, the complete supply chain industry in India has reacted, tried, failed, learnt and readjusted it’s strategies to refine this process. True success in last mile however, eludes even the best players in the Industry. Amidst all this trial and error, Omnichannel supply chain management has emerged as the hopeful solution to logistics woes. ‘Phygital’ as we call it, involves a careful partnership of physical and digital channels that enables a seamless journey of a product to it’s customer. What this does essentially is place the responsibility of last mile logistics to the customer. Take for example, Tata Cliq, the newest player that has surprised many with it’s definitive success in e-commerce in such a short timespan. It’s ‘store fulfilment’ model is the alternate to the standard ‘warehouse’ model, wherein any time a customer places an order, they’re notified of the nearest store they can pick it up at or have it home delivered by the store itself. This does the following:
– Reduce the standard logistics costs involved in last mile delivery by big providers
– Enable customer to have greater control over the product delivery, thus reducing future overheads like call centre, tracking, coordination costs and time.
– Solve inventory limitations for the sellers
– Outsource the logistics to the local area-based fulfilment providers, speeding up the last mile process.
What this gives way to, is basically a shared-economy model of sorts for the logistics industry, one which has been prevalent in public transport through Uber and accommodation through Airbnb. This new model allows brands to sell at scale, without really having to own or build the whole logistics infrastructure from scratch, and rather use the specific touch points at various cities to fulfil their local customer bases.
What this means for the logistics providers is that they have to pivot their focus on building infrastructure that enables such hyperlocal systems rather than have a blanket country-wide provision. Each model operating independently, yet monitored centrally gives rise to an agile, hyperlocal models that finally provide a smooth customer experience.
This is essentially the beginning of R&D in the dynamic field of logistics, and more innovations are yet to come, but now you know what goes into giving our customers their Diwali delights.
Pridel is a global freight forwarder with a network spanning 5 continents, pioneering technologies and using our expertise of 25 years to enable a strong logistics infrastructure for leading brands around the world.