Charged by consumers’ digital-first approach in the wake of the pandemic, startups are increasingly leveraging the D2C rush. And understandably so, as the model allows them to bypass intermediaries and reach customers faster and more efficiently.
Broadening the customer reach has advantages, especially when one eyes short-term sales goals. But retaining customers is an entirely different ball game. In fact, new-age brands often face a double whammy. Meeting shoppers’ expectations with industry best practices is of critical importance despite additional expenditure. But sticking to cost-effective solutions is necessary for better profits and long-term sustainability.
The art and science (read technology) of building an enriching customer experience cannot be ignored, though, if one has to level up the growth game for the long term and keep a cap on customer acquisition costs (CAC). A Forrester report says that 80% of customers recommend a brand only after a good shopping experience. So, this is going to be challenging.
How should D2C brands without the deep pockets of legacy players ensure a consistent customer experience (CX) beyond the purchase stage?
Forward-thinking brands are increasingly leveraging end-to-end services offered by ecommerce enablers. Website builders like Shopify and Wix; logistics and supply chain partners like Shipway and Blue Dart and customer support channels like Zendesk and Freshworks deploy tech-driven capabilities — from digital payments to shipping to comprehensive customer relationship management (CRM) — to help brands facilitate operations without compromising on CX.
Take, for instance, Delhi-based Heads Up for Tails (HUFT), an omnichannel retailer of pet supplies. In 2019, the company was overwhelmed by too many return/exchange queries, compelling it to process some manually to stay up to speed. However, HUFT had a huge problem tracking and monitoring the returns.
There was one way out of the intense Excel exercise. The company opted for Shipway’s automated and proactive tracking mechanism to monitor refund and exchange processes, keep a tab on shipments and send timely updates to customers. Eventually, HUFT clocked a 70% reduction in turnaround time for an end-to-end return process, while manual requests dropped to zero.
The process improvement was not too surprising. Since its launch in 2015, Gurugram-based Shipway, a SaaS enabled platform, has helped companies reach out to customers. It is a 5-in-1 automated service provider covering shipping, order tracking, notifications, NDR (non-delivery report) management and AI based fraud detection.
“We observed that D2C brands struggled to provide a smooth customer experience, and it became a challenge for them to scale up and grow like industry pioneers,” said Sandeep Pati, AVP of marketing and partnerships at Shipway. “Our automated services give merchants more flexibility and easy-to-use applications so that they can manage operations, customer engagement and logistics on one platform,” he added.
“In D2C growth we somehow work as a CRM (customer relationship management) through which brands can give their customers the best in class services,” says Shipway which claims to have on boarded 12,000 plus sellers, over 600 courier partners and more than 50 3PL integration partners. According to the shipping automation service provider, it handles an average of 5 Mn shipments a month. The company recorded a 100% yearly revenue jump in FY21 and is targeting $10 Mn revenue in FY23.
A ‘Super-App’ In Play To Boost Brands’ Performance
Shipway’s core competency lies in post-purchase tracking, shipping and resolution, requiring a one-stop platform for multiple solutions and functionalities.
Referring to the company as a ‘super-app’, Pati explained how brands can leverage Shipway’s DIY solutions to ensure flexibility and optimise the shipping process. “We are providing automated tools which are easy to customise and use. The goal is to provide brands with solutions before they realise the problem,” he said.
For instance, Shipway has helped partner brands integrate tally and accounting, automate returns and more. It claims to have simplified the workflow for Tamil Nadu-based Vilvah Store — an omnichannel skincare brand — by bringing down its operational cost by 20%. Gurugram-based lifestyle brand, MensXP used Shipway’s solutions. As a result, the brand reduced overall time consumed for dispatch operations from five hours to 15 minutes, Shipway told Inc42.
The startup aims to become the go-to option for brands seeking cost efficiency by reducing multiple POCs (points of contact) and leveraging a comprehensive service bouquet. Let’s take a look at its tech-driven solutions and how they are helping brands:
The Power Of CX In Optimising Growth
A recent report by Freshworks shows that 80% of buyers are more likely to purchase products when brands offer personalised experiences.
Explaining the importance of CX, Pati said, “If they are satisfied with a product, your customers become your brand ambassadors, and this will help brands grow their business.”
The company has an NPS (net promoter score) system to track and assess CX. This allows D2C brands to track feedback on different parameters such as buying, post-buying and product experience. Based on scores generated by the system, brands can analyse their strengths and weaknesses and work accordingly to put things right. For example, a 60-70% overall score indicates a good shopping experience. But a 40-50% score suggests that brands need to work on their CX, Pati added.
Integration And Partnership
Today, brands are leveraging an omnichannel approach to reach their customers. Keeping this in mind, Shipway has integrated with major ecommerce marketplaces such as Amazon and Flipkart as well as ecommerce enablers like Shopify and its ilk to bring its solutions to the fore. Here is a case in point — Brands using Shopify account for 70% of all its major clients, Shipway said.
The onboarding process is also quite simple as partner brands need not integrate API. The plug-and-play API integration enables brands to track all major courier providers such as Blue Dart, Delhivery and DTDC in one place. The idea is to help brands customise Shipway’s solutions that will help engine their growth, Pati explained.
While the pandemic-induced rise of ecommerce has driven many brands to opt for the D2C route, online adoption comes with its own set of challenges. For instance, Razorpay estimates that 1 in 3 online orders can end up in RTO (Return to Origin). This can severely affect businesses, especially small businesses and startup brands as they have to bear the costs.
“There is no direct formula to tackle RTOs. But to minimise RTO, you need to take proper actions at the different stages – starting from order confirmation to order delivery”, advises Pati.
Building on the same thought, Shipway has many tools in place to overcome RTO-related losses:
Shipway analyzes user data (purchase history, address check, pincodes etc) to flag brands of potential frauds. “If a customer has bought something from a brand 10 times, out of which 8 have been RTO, we raise a flag (high risk order) indicating fraudulent activity”, said Pati. Further, if the customer’s address is not concrete, Shipway’s AI driven-system detects and warns the brands, he explained.
Shipway believes that alerting the brands at the right time can help prevent frauds as the sellers have the option to hold or delete suspicious orders.
A centralised dashboard helps brands manage NDR by sending automated non-delivery follow ups for undelivered orders. The system opens multiple paths for the brands, such as re-attempt of shipments, holding on to the order, or returning it to the origin.
- COD orders to Prepaid conversion:
One of the challenges with COD (cash on delivery) is that when the customer returns the product without paying for it, it adds to the seller’s revenue loss. “Out of 70% of COD orders, 20-30% are RTO’s,” Pati explained, adding that customers can refuse the order as they have nothing to lose in the first place, are not genuine about it, or find the same product elsewhere. To counter this challenge, Shipway allows brands to give monetary incentives (coupons, & discounts) to their customers, 24 hours before processing the order. The customers can convert their COD order to prepaid and enjoy these incentives.
What’s Next For Shipway?
“We are constantly going deeper into our products & offerings to bring more value to our D2C seller community and power their growth. We want to deliver a top-notch post-purchase experience for them to enable high repeat purchases & drive customer loyalty,” Pati said.
Shipway is set to bring a plethora of new additions, backed by AI/ML to not only detect frauds but to also prevent them. It is also introducing its own courier service to expand its product stack beyond tech support.
When it comes to India’s D2C landscape, ecommerce enablers have emerged as catalysts for brands as they script their success in this space. These enablers play the part of foot soldiers in this thriving ecosystem — poised to grow at a CAGR of 25% between 2020-2025. As more and more brands go the D2C way, it will be interesting to see how enablers such as Shipway evolve and develop their solutions to solve sellers’ pain points and help them grow.