Evolving Business Trends In E-Commerce Industry

Harshal Bhoi, SVP & Business Head, XpressBees | Friday, 26 April 2019, 09:45 IST

Zafar Ismail (Name Changed) Kashmiri youth who used to travel 18 km one way on treacherous Kashmir roads to reach his workplace in subzero tempera­tures. He quit and was lured to be stone pelter. Today, his work has not only come home, it has come to his cell phone. Eve­ry morning, when Zafar switches on his mobile he gets the work delivered to him. The details of shipments he must pick from a nearby warehouse and distribute it to people in and around his home are in hands. He deliv­ers happiness to the strife and weather-beaten Kashmiris whose only way to get high quality products in wake of Bandhs is E Commerce.

Sunder Rajan, a transport fleet management veteran of 25 years had spent his life managing trucks, their routing, planning, tracking and utilization. He remembers loading capacity; volume capacity of each transport vehicle in In­dia just like an experienced musician knows his notes. He used to take one full day every week to plan routing sched­ules, pickups and drops. No one other than him could do this critical job. Today, Ranjith, a graduate with 2 yrs. experience is doing entire planning using - Multi Depot Travelling salesman algorithm” and the planning process gets done in few minutes. Sunder is spending more time improving the other critical metric like Vehicle Utiliza­tion Efficiency (VUE) and Turn Around Times (TATs)

The rapid growth of E Commerce in India has put stringent demands on the logistics companies which fulfill them. In the E Commerce world, the consumer is the real QUEEN who is being wooed by discounts, free deliv­eries, no questions asked in return. Rise of Flipkart and advent of Amazon has meant that global gold standards of delivery have become the non-negotiable business value. This has put a massive demand of digitalization of a host of business processes which hitherto were being managed manually or by using non-digital means. In the article, we look at the key business processes where digital is making a massive impact on the efficiencies and accuracy.

1. Material Handling (Automated Sorting): Since the advent of postal systems sorting the shipments has been one of the most important activities in the distributive logistics. Huge heaps of out bound material were sorted by humans inspecting each and every par­cel or shipment and putting them into their respective zones. The process has seen an ocean of change where the material is loaded on conveyors, their barcodes are read by a bridge to deter­mine which zone they belong to and when the shipment reach near its zone bin, a pneumatic arm takes it off the conveyor to the bin.

"How fast the future arrives depends on how fast the E Commerce companies change their gears from being obsessed with Customer acquisition to become sustainable profitable businesses"

The automated sortation systems not only separate 1000s of parcels down to their last pincodes but also do it faster than what an army of 100s of humans can accomplish.

The Next Wave: The next wave of automation will lead to the systems not only sorting but also doing a check on the contents inside the parcels to determine its content. This will help prevent delivery of improper products or products in improper state. Ma­chine vision and artificial intelligence are likely to play a much larger role in fraud shipment detection.

2. E Commerce Customer Rat­ing and End of Era – for free returns: Every year 4 billion pounds of re­turned clothing ends up in landfill. In US alone, 7.5 million clothing pieces were returned in this holiday season. When analyzed, it was found that peo­ple order multiple sizes and multiple colors of the same cloth. They retain one and return all other. The reason for their behavior is Free Shipping+ Free return.

Return % from Ecommerce sales are on average 3 to 4 times more than in brick and mortar retail, the flexible policies on returns to lure customers or increase conversions have reached their expiry date. High returns not only affect the margins but chances of damage in multiple transit and pack­ing issues.

With advent of AI and ML, ha­bitual offenders (customers) who have a habit of returning their purchases will get individually flagged for inap­propriate behavior. Once their rating drops, they may lose privileges to buy during major online shopping festivals till their ratings comeback to respect­able levels. Return policies of all E Commerce companies would be rede­fined.

The Next Wave: The algorithms in the next stage of evolution will create a customer profile on a complex set of data comprising but not limited to key stroke rhythm, cart addition to pur­chases to returns pattern, shipping ad­dress, payment mode to prevent plac­ing of orders where return probability breaches a threshold.

3. Social Platforms becoming Transactional: Social media platforms are rapidly moving to a vector where rather than redirecting a user to a mer­chant site for consummation of orders, there will be one click buy on twitter, Instagram or facebook. This will not only increase monetization of user base but also make online purchases more frictionless and instant. The so­cial purchase may trigger a domino of transaction by people in the social net­work thereby adding to the shopping experience.

The Next Wave: Very soon we would see private messaging services platforms like WhatsApp/ WeChat too becoming transactional. A new in­spirational product purchased by user and shared on messaging platform may lead to options for other users in the group instantly placing the order for the product in chat itself. Other in­novation which is likely to appear in end of 2019 is personal bots which will learn the preference of users and help them pick right product after cut­ting through the marketing hype and knowledge.

Conclusion: The rapid growth in E Commerce industry has nudged the logistics and business processes to reinvent itself by adopting digi­tal tools. This may affect the online shopping environment and a myriad different way. How fast the future ar­rives depends on how fast the E Com­merce companies change their gears from being obsessed with Customer acquisition to become sustainable profitable businesses.

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