The pandemic exposed holes in the supply chain, say industry leaders of India’s D2C ecosystem
The pandemic forced D2C and omnichannel brands to reimagine and revisit their supply chain strategies to continue scaling. A tech-enabled supply chain was an answer for many of them.
To understand how D2C brands dealt with the changing customer behaviour and continued delivering superior customer experience, YourStory’s Brands of New India Mega Summit saw a panel discussion on ‘Re-thinking Supply Chain Design for D2C and Omni-Channel Brands’, featuring Lokesh Gupta, Vice President - Supply Chain,; Maruthy Ramgandhi, Chief Product and Technology Officer, ; Vedang Patel, Co-founder, ; Taran Chhabra, Founder, ; and Rajaganesh Sethupathi, Head - Enterprise Solutions, . Here are some key takeaways.
Explosive growth of online commerce
Rajaganesh of Delhivery believes that today markets have expanded with more business being generated from rural India. “This means customers are discovering more on different platforms and they are looking at faster deliveries. We’ve seen the sudden surge of quick commerce with groceries. They seek instant gratification,” he said.
He highlighted two factors that have become extremely important for D2C brands - sourcing and distribution. There is a demand for greater reach, availability of products, and the brand’s ability to service far flung areas in a short period of time. “The question remains, how you can give a good customer experience without compromising on cost and growth,” he said.
Wakefit’s Lokesh echoed similar sentiments. “Consumer behaviour has been changing and people want same day deliveries today. Startups are trying to give same day delivery at least in metros,” he shared.
The pandemic exposed holes in the supply chain
“If you had holes and gaps in your supply chain, the pandemic ripped it open. You had to have a strong backend,” said Vedang, adding that brands had to become super agile. The Souled Store credits their growth to having real data. He explained, “When a product goes live, the click through rates, the conversions are tracked and flown into our supply chain. We start projecting what the demand will be and this happens in real time.”
Speaking about Bewakoof’s experience, Maruthy said that they do not go high on their inventory commitment. “We start with a small set of inventory, put it out for customers. We then look at the key metrics like CTR, revenue. We look at that to see what is working and what is not. That helps minimise risks from an inventory standpoint,” he explained.
Bewakoof also leveraged ‘Just In Time’ (JIT), internally called ‘the colour model’. “A lot of our designs are printed and delivered just in time. It used to take us 20-30 days to get it ready and ship it out. But we have managed to bring it down to seven days,” Maruthy said, adding that they are optimising technology to bring it down further to two days.
The ecosystem has changed
Neemans’ Taran spoke about the company building their own supply chain in India. “Our supply chain is totally global. We brought the entire assembly to India. Today, we make 3,000 pairs a day. The ecosystem has changed and we work with some of the best assembly guys in India,” he said. The need arose when they wondered how to market their products. “We've brought amazing natural, sustainable products that are extremely comfortable for everyday wear. Our footwear is feature-driven. Features are something you look at in products and electronics. But not in footwear. We’ve said this material is flexible, breathable, and can be worn in winters - we just pivoted and wondered how we can market these products,” he said.
Lokesh added that for them, it was important to reach more customers and also maintain the same experience. The team started opening more warehouses and today, they are present in 23 cities across the country. “Due to increasing SKUs and fluctuating demands, our replenishing cycles were getting affected. To overcome that, increasing vehicle frequency was the answer,” Lokesh added.
Reliability is key
Rajaganesh insisted that during the pandemic, the importance of reliability and recovery increased. “This has been our biggest challenge. We run with blue collar workforces across thousands of facilities and anything can go wrong. For example, there could be a COVID outbreak in our last mile centre. Planning for this and being proactive is important. We were able to map our delivery locations and manage our routing around the restrictions with data,” he said.
Delhivery expanded their fulfillment network. Due to this, they could promise faster deliveries. “We also acquired PrimaSeller which helped our omnichannel retailers. We are open to experiments to figure out the next wave of supply chain innovations,” he added.
Customer experience is the centrepiece
“You can have a great product, what customers remember is how they felt when they got the product,” said Vedang, adding that the proposition for The Souled Store is celebrating fandom together. “We pay attention to our NPS score. Our response time is 10 mins, faster than others in the industry. We are very sure about how our customers need to feel. We don't want our customers to wait and solve their problems soon,” he said.
As for Taran, response time has to be catered better. He said, “It has to be technology-driven, where customers are informed when the pick up is happening, are we giving them preference on where they are available.”
You need a solution, not a service
Rajaganesh said that the most common service D2C brands use is the express parcel delivery service. But there are ups and downs and the network is not 100 percent, which is something every brand understands and they know that logistics cannot be perfect.
“The issue is how quickly you can identify mistakes and work on them. You also manage the customer appropriately. Fast recovery is important. At the end of the day, we need to build that customer trust and build a reliable supply chain for brands and as they grow, how can we enable that growth. We have moved away from providing a service to providing solutions. These are solutions that are co-created. Neemans’ requirement is different from Wakefit’s. When you buy a service, you get vanilla products. But if you want a bespoke solution, you need to have a conversation with the right set of people from either side,” he said.
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