Editor's note: This article has been penned by Medha Khanna, the head of Finance team at Grofers, a Sequoia Capital backed hyper logistics startup. The company has just turned one and to mark the occasion, decided to give away free macarons to its customers. The campaign was successful and the learnings from it are valuable for all early stage startups...
Grofers is changing the way local commerce finds its way to your doorstep. We provide hyper-local logistics that enables smoother transactions between local merchants and consumers. We are bringing technology and innovation to a market that has long run on paper slips and telephones.
We started operations on January 1st of 2014 and within a year, the company has processed over 150,000 local transactions. The Grofers mobile app now features over 9,000 items that you can purchase from stores around Delhi NCR and get them delivered to your doorstep within 90 minutes.
The 1 year macarons
The biggest advantage we have is a well spread out delivery network that services over 170 merchants across the three cities. Delhi NCR is our most advanced market and the only one where we have released our android app (bit.ly/grofers) so far. We wanted to spread awareness about Grofers, the fact that we do delivery of almost anything to your doorstep within 90 minutes - and get some feedback on our mobile app as well.
We got 300 macarons ready for our big day (27th December) and were expecting to deliver them to about a 100 customers. I wrote a blog post and shared it on social media, talking about Grofers and the free macarons. Turns out, people really like free stuff, especially when that free stuff is a decadent pastry. Users had to go into our app and checkout a birthday wish in order to get the macaron. That way, we were able to verify their phone number and also get their address.
We got 3 requests in the first half an hour or so. This number kept creeping up for the next couple of hours and the flood gates opened between 1PM and 3PM when we received 230 birthday wishes. By 6PM, we had processed almost 400 orders, distributed over 700 macarons. We ran out of supplies of our own macarons pretty quickly - even after rationing down to 2 a user from 3 a user. We also cleaned the shelves at Theos, L'Opera and Choko La - the only places we could find around our stations that had macarons. Eventually, we started giving away cookies from Subway and by 8PM had emptied three of their outlets as well.
When the dust finally settled, we had processed 463 orders. The shortest delivery time was 37 minutes and longest delivery time was 216 minutes (more on that later). Not bad for an app that is one week old. More importantly, our app crashed 92 times and we got a whole bunch of feedback in one day.
Be ready for the worst case scenario: We were confident that our worse case scenario would mean we ran out of macarons and had to source them locally. We had taken local stock and expected that all the bakeries in Delhi combined would be able to supply any excess need. The uneven demand from different areas meant we wiped out our own inventory and that of the stores in some areas very quickly. There were no macarons available at any stores in Gurgaon after 2PM on Saturday. If they were, they probably were too expensive for us to buy (although we did buy a few just to surprise some customers).
Really, be ready for the worst case scenario: I remember asking our operations team if we should eliminate the Birthday store from some areas which were too far out. The reaction was, nah - no one from Najafgarh will know about Grofers. We got two orders from Najafgarh. At 6PM in the evening, the news spread to IMT Ghaziabad and i guess a couple of dorms binged on free cookies yesterday.
Play to your strengths: While we were new to the online shopping world, we had gained a lot of experience over the last year doing hyper-local deliveries. What saved our ass at the end of the day was the fact that our operations could handle the excess orders, fulfil them from local stores (even when they weren't that close) and still manage to do over 1000 regular deliveries. Marrying online and offline seems to make a lot of sense, but actually making it click is a lot more complicated. I couldn't be more proud of our operations team that absorbed the extra pressure.
Don't be afraid: We thought of this experiment after a fairly lengthy beer session on the day our app launched. We were nervous, very conscious of our ability but very excited that we had a delivery network that could probably accomplish something this crazy. Not having to invest anything upfront helped us take the chance (we got macarons against a barter with one of our clients) - but what really tipped the scale in our favour was the fact that we had no clue how it would turn out.
Now that we know, you know. Good luck.