Offline collection centres, hyperlocal models the new weapons of high-speed e-deliveries

Reflecting the increasing attention ecommerce players are paying to speed and accuracy of order deliveries while also clipping the enlarging bill from delivery costs, online marketplace Snapdeal has rolled out a new service ‘Snapdeal Instant’ to allow delivery of packages to customers as early as within an hour of placing the order. Based on a hyperlocal delivery approach, Snapdeal will allow sellers to ship the product directly to consumers through its courier partners or via its fulfillment centres.
To start with, the service would be available in Delhi, Mumbai and Bangalore, before extending to eight major cities in the next two months. The service is currently limited to packages weighing below 5 kg.
“Snapdeal Instant is aimed at further improving customer experience on our platform by enabling faster deliveries and maintaining product quality at the same time. Customers could get their products delivered as early as within an hour of the order being placed,” Snapdeal Vice President Operations Ashish Chitravanshi told PTI.
One of the main challenges for ecommerce companies today is the possible unavailability of customers at delivery times, which kicks off a process that ramps up costs for both the company and its merchants. Offline collection centres could resolve this problem as well as eliminate last-mile delivery costs, which typically account for about 28 per cent of the total cost of transporting goods for ecommerce marketplaces.
Online retailer Flipkart last month indicated that it plans to set up 500-1,000 sq ft pickup or collection centres in smaller cities with a population of up to 50,000. This will help the company to pace up its delivery model to tap into the growing demand in these markets. It has already launched 20 so-called ‘experience zones’ in 10 cities and plans to open 100 centres across the country by March 2016.
As per the new delivery model, Flipkart will send goods to a collection centre; the shopper will be informed through a text message sent on the mobile number. Subsequently, the customer can collect the package from a collection centre.
Flipkart launched this pilot project in January this year. “A six-month pilot of the project saw at least 80 per cent of orders picked up at the collection centres,” the company said in a media report.
Last year, Amazon India started similar pickup services under the ‘Amazon Pickup’ programme that let buyers collect their parcels from selected locations. The service has grown from 20 pickup centres in Bangalore to 800+ points across 45 cities, including Thoothukudi, Thanjavur, Vijayawada, Belgaum, Kolhapur, Rajkot and Ludhiana.
The company had piloted Amazon Pickup at Bharat Petroleum’s In & Out stores in Delhi and Mumbai last year. Going forward, the company plans to extend this deal to make all the In & Out outlets across the country its pickup points. Currently 35 In & Out stores have already been on-boarded to act as pickup points for Amazon.
Meanwhile, online marketplace major Snapdeal also conducted a pilot on establishing collection centres recently and is looking at doing full-scale zone up programmes on these collection centres.
Flipkart’s model mirrors the strategy deployed by e-commerce companies in price-sensitive markets like France, Germany and China to help improve profitability. In France, a network of pickup points such as Relais-Colis and Mondial-Relais allow for parcel pickup and returns at local stores, including tobacco shops
Globally, customer pickups of ecommerce orders are not a new strategy. Amazon launched Amazon Locker in 2011, through which customers can retrieve their packages at a local locker location using a personal code. The company also has thousands of pickup points across Canada.
Industry experts believe that with smartphones proliferating in every nook and corner of India and online shopping growing in tandem, an offline system such as as physical collction centres will be a necessary innovation for ecommerce merchants to control costs, while making good on delivery promises even in far-flung geographies.
Inputs by Mehak Sharma