Successful scaling of Direct-to-Consumer (D2C) brands is deeply rooted in proficient logistics management. This entails streamlining processes, harnessing technology, forging strategic alliances, and maintaining a customer-centric approach to ensure a seamless and scalable supply chain. While in the earlier section, we dived deeper into the value chain & strategic drivers of successful D2C brands and the upcoming trends, in this section, D2C players highlight the intricacies of an efficient supply chain and the pivotal role of Logistics Service Providers (LSPs) in this ever-evolving journey…
LOGISTICS plays a critical role in the scaling of D2C brands from 0-100 by offering scalable infrastructure, enhancing delivery speeds, minimizing expenses, boosting customer contentment, and utilizing data analytics. Investing in a strong and effective logistics and supply chain management is essential for D2C brands to sustain their expansion, ensuring ample capacity, adaptability, and scalability. Through refining their logistics processes, D2C brands can elevate the customer journey, trim down costs, and stay ahead in the swiftly evolving market landscape, securing their competitiveness and profitability.
Tarun Gupta
Tarun Gupta,Co-Founder, BOULT: In the age of D2C commerce, the success of any D2C business hinges significantly on efficient logistics. Timely deliveries and a smooth customer experience are paramount, and effective logistics can be a game-changer for businesses in this realm. As D2C companies expand, they often grapple with the complexities of managing their logistics operations, and this is where technology becomes instrumental.
According to a KPMG report, companies equipped with robust logistics and supply chain infrastructure can potentially slash their delivery times by a minimum of 50%. Technology serves as a powerful ally for D2C companies, enabling them to streamline logistics, elevate customer satisfaction, and ultimately achieve their business objectives.
Technology proves particularly beneficial in managing inventory levels for D2C companies. Advanced tools like predictive analytics aid in accurately forecasting demand and optimizing inventory levels. Through technological integration, D2C companies can mitigate the risk of stock-outs, minimize wastage, and elevate overall customer satisfaction. This is especially relevant in the context of supply chain innovation where real-time data and analytics play a crucial role in optimizing inventory and meeting customer demands efficiently.
Another critical area where technology plays a pivotal role is in coordinating deliveries. Given the myriad carriers and delivery options, ensuring prompt and cost-effective deliveries poses a challenge for D2C companies. Leveraging technology enables these companies to streamline logistics operations, enhance delivery times, and provide an improved customer experience.
A PwC study has also highlighted that unreliable delivery times lead to 40% of consumers abandoning their online shopping carts. In the current scheme of things, technology in supply chain management has emerged as a solution to this challenge by offering features for more effective tracking of deliveries across multiple carriers. Real-time tracking and delivery status updates empower D2C companies to furnish customers with precise delivery information, thereby reducing the likelihood of complaints and bolstering overall customer satisfaction
Darshan Chhajed
Darshan Chhajed, Manager– D2C & Global Ecommerce, Symphony Ltd:Logistics plays a crucial role in the scaling of D2C brands from 0-100 by ensuring efficient order fulfilment, timely delivery, and customer satisfaction. In the early stages, D2C brands must establish streamlined logistics processes to handle increasing order volumes as they scale. This includes optimizing warehouse operations, inventory management, and shipping processes to meet growing demand without compromising on speed or quality.
As D2C brands scale, logistics becomes even more critical in maintaining customer satisfaction. Fast and reliable shipping options become essential to meet customer expectations and compete effectively in the market. This is where Turnaround Time (TAT) becomes crucial. A quick TAT ensures that customers receive their orders promptly, leading to higher satisfaction and potentially repeat business. Implementing advanced logistics technologies, such as automated order processing and real-time tracking, can help improve efficiency and transparency in the supply chain, driving innovation in supply chain management.
Furthermore, logistics can impact the scalability of D2C brands by influencing their ability to expand into new markets. A robust logistics network allows brands to reach a wider customer base and fulfil orders across different regions efficiently. Overall, investing in logistics infrastructure and processes, including optimizing TAT, is essential for D2C brands to scale successfully from 0-100.
Dr. Ashvini Jakhar
Dr. Ashvini Jakhar, Founder& CEO, Prozo: In the realm of retail brands, particularly within the domain of D2C brands, the journey from inception to market dominance depends on the brand's seamless operation and its ability to do swift customer deliveries. This is where logistics plays a pivotal role. Brands that harness efficient and comprehensive supply chains can ensure timely production, optimized inventory management, and on-time order fulfilment. Customer satisfaction, essential for building market credibility and organic growth, is guaranteed only through safe, affordable, and prompt deliveries. By engaging in strategic logistics planning with supply chain partners, D2C startups can reduce costs, alleviate hassles, and mitigate potential errors. Leveraging the expertise and cutting-edge technologies provided by leading logistics players makes it less challenging to scale from 0 to 100 and beyond while maintaining a high level of product quality and customer experience.
Shivam Pandey
Shivam Pandey, Head– Inventory & Supply Chain, Good Glamm Group:Here are key aspects of logistics in the D2C scaling process:
Order Fulfillment: Streamlining order fulfilment processes is essential. As order volumes increase, efficient picking, packing, and shipping processes become crucial to meet customer expectations and reduce lead times. Implementing scalable order management and warehouse management systems helps handle increased order volumes without sacrificing accuracy or speed.
Inventory Management: Efficient inventory management is vital for preventing stockouts and overstock situations. Implementing robust inventory forecasting and management systems ensures that the right amount of inventory is available to meet demand. Scaling may require expanding or optimizing warehousing capabilities to accommodate larger inventory volumes and ensure timely order processing.
Shipping and Distribution: As order volumes increase, negotiating favourable shipping rates with carriers becomes essential for cost-effectiveness. Scaling often involves reaching new markets. Logistics must adapt to international shipping requirements and customs regulations for seamless cross-border operations.
Technology Integration: Implementing automation in logistics processes, such as automated order picking and tracking, helps enhance efficiency and reduces the likelihood of errors. Utilizing data analytics for real-time visibility into logistics operations aids in identifying bottlenecks, optimizing routes, and making data-driven decisions.
Scalable Partnerships: Engaging with reliable 3PL providers can be crucial for scaling. 3PLs offer expertise, infrastructure, and scalability, allowing D2C brands to focus on core competencies. Building strong relationships with suppliers ensures a steady and scalable supply chain, minimizing disruptions as the business grows.
Customer Experience: Offering flexible delivery options, such as express shipping or multiple carriers, enhances the customer experience and can be a competitive advantage. Keeping customers informed about the status of their orders, including tracking information, is crucial for transparency and customer satisfaction.
Returns Management: Establishing efficient and customer-friendly return processes is important for managing returns as the business scales. It contributes to customer loyalty and satisfaction.
Regulatory Compliance: As a business scales, it may need to comply with additional regulations, both domestically and internationally. Ensuring compliance with shipping regulations, customs, and other logistics-related legal requirements is essential.
What have been the challenges in finding the right logistics service provider? What are your wish lists for them?
Tarun Gupta: Selecting the right logistics service provider has indeed presented some challenges, yet it remains a critical aspect of our operations at BOULT. One of the primary challenges we’ve encountered is ensuring adequate coverage across diverse geographical areas. The logistics partner needs to offer extensive coverage to meet the demands of our widespread customer base efficiently.
Cost considerations have been another challenge, as we seek a balance between quality services and budget constraints. While we understand the importance of cost-effectiveness, it is crucial that it doesn’t compromise the reliability and efficiency of the logistics provider.
Credibility is paramount in our selection process. Trustworthiness and a proven track record are non-negotiable as we rely on our logistics partners to uphold our brand reputation through their services. On-time delivery is a critical factor, and any deviation from the agreed-upon timelines can have cascading effects on our supply chain and customer satisfaction.
RTO (Return to Origin) protection is an essential aspect we prioritize. Given the nature of our business, having a robust system in place for managing returns ensures a smooth and customer friendly experience. Quality control and assurance play a vital role, especially in the e-commerce space. We expect our logistics partners to adhere to stringent quality standards and maintain the integrity of our products during transit.
Our wishlist from a logistics service provider includes extensive coverage, a cost-effective yet reliable service, impeccable credibility, a commitment to on-time delivery, robust RTO protection mechanisms, and a dedication to maintaining the quality and integrity of our products through stringent quality control measures. These criteria form the foundation for a successful and sustainable partnership in the dynamic landscape of logistics.
Pritesh Asher,
Pritesh Asher,Co-founder & CEO, Juicy Chemistry: Finding the right logistics service provider can be a challenging task for D2C brands, as there are several factors to consider, such as cost, reliability, scalability, and customer service. Here are some of the common challenges faced by D2C brands in finding the right logistics service provider:
High Costs: Logistics costs can be a significant expense for D2C brands, especially as they scale. Finding a logistics service provider that offers competitive pricing and value for money can be challenging.
Lack of Transparency: Some logistics service providers lack transparency in their processes, making it difficult for D2C brands to track their orders and deliveries accurately.
Limited Scalability: As D2C brands grow, they need logistics serviceproviders that can scale with them. Finding a provider that can handleincreasing volumes and deliveries can be challenging.
Poor Customer Service: Logistics service providers that do not provide excellent customer service can lead to delays, damaged goods, and dissatisfied customers.
Limited Flexibility: D2C brands require logistics service providers that can offer flexible and customized solutions to meet their unique needs and requirements.
Here are some of the wishlists from D2C brands for logistics service providers:
Competitive Pricing: D2C brands look for logistics service providers that offer competitive pricing and value for money.
Real-Time Tracking: D2C brands require logistics service providers that offer real-time tracking and visibility into their orders and deliveries.
Excellent Customer Service: D2C brands require logistics service providers that provide excellent customer service, including timely communication, responsiveness, and resolution of issues.
Customized Solutions: D2C brands require logistics service providers that can offer customized solutions to meet their unique needs and requirements.
Sustainability: D2C brands are increasingly looking for logistics service providers that prioritize sustainability in their operations, such as using eco-friendly packaging and transportation modes.
Darshan Chhajed: Finding the right logistics service provider (LSP) can be challenging for D2C brands due to various factors. One challenge is the sheer number of available providers, making it difficult to assess their reliability, costeffectiveness, and compatibility with the brand’s specific needs. Another challenge is the need to balance cost with service quality, as some providers may offer lower prices but fail to meet delivery deadlines or provide adequate support.
Insights from the industry suggest that D2C brands should prioritizeLSPs that offer technology-driven solutions, such as real-time tracking and inventory management, to enhance visibility and control over the supply chain. Additionally, choosing LSPs with a strong network and infrastructure can help ensure reliable and timely deliveries, especially during peak seasons or unexpected disruptions. Collaborating with LSPs that have experience working with D2C brands or similar industries can also provide valuable insights and best practices for optimizing logistics operations. Ultimately, finding the right LSP requires careful evaluation of capabilities, cost-effectiveness, and alignment with the brand’s values and goals.
Shivam Pandey: Finding the right logistics service provider (LSP) can be a complex task, and businesses often face several challenges in the process. Some common challenges include:
Cost Management: Balancing cost ffectiveness with service quality can be difficult. Some providers may offer lower prices but compromise on reliability or speed.
Wishlist: Businesses often seek providers that offer competitive pricing without sacrificing service quality. Transparent pricing structures are also desirable.
Reliability and Timeliness: Ensuring that the LSP can consistently meet delivery deadlines is crucial. Unreliable transportation or delays can disrupt the entire supply chain.
Wishlist: Businesses wish for LSPs that have a proven track record of on-time deliveries and provide real-time tracking and monitoring capabilities.
Global Reach and Network: For businesses with global operations, finding a logistics partner with a reliable international network can be challenging.
Wishlist: LSPs with a wide-reaching gobal network, strong partnerships, and expertise in international logistics are preferred.
Technology Integration: Many businesses face challenges in integrating their systems with those of their logistics partners, leading to communication and data exchange issues.
Wishlist: Seamless integration with advanced technology platforms, such as real-time tracking, inventory management, and analytics, is often a priority for businesses.
Flexibility and Scalability: Adapting to changing business needs, seasonal variations, or unexpected surges in demand can be challenging for some logistics providers.
Wishlist: Businesses look for LSPs that are flexible, scalable, and can quickly adjust their services to accommodate fluctuations in demand.
Customs Compliance and Regulatory Knowledge: Navigating complex customs regulations and staying compliant with international trade laws is a significant challenge, especially for businesses involved in cross-border logistics.
Wishlist: A logistics partner with a deep understanding of customs procedures, compliance expertise, and up-to-date knowledge of international trade regulations is highly valued.
Communication and Customer Service: Poor communication and lack of responsiveness can lead to misunderstandings and delays.
Wishlist: Businesses appreciate logistics providers that offer excellent customer service, clear communication channels, and proactive issue resolution.
Sustainability and Environmental Practices: As sustainability becomes a more significant concern, finding a logistics partner with environmentally friendly practices can be challenging.
Wishlist: LSPs that prioritize sustainability, offer eco-friendly transportation options, and have a commitment to reducing their carbon footprint are increasingly sought after. In short, businesses typically seek logistics service providers that offer a balance between cost, reliability, technology integration, flexibility, and excellent customer service while also aligning with their global reach, customs compliance, and sustainability goals. The ideal LSP is a strategic partner capable of adapting to the evolving needs of the business.
What are the challenges faced by the LSPs in living up to clients’ expectations?
Dr. Ashvini Jakhar: Prozo believes that addressing the challenges in meeting expectations to meet D2C deliveries, requires a combination of strategic planning, investment in technology and infrastructure, coupled with effective partnerships with logistics providers, and a customer centric approach to operations and communication. Sustainability & growth with fluctuating D2C volumes while balancing cost and efficiency presents a major complex problem. Handling returns and exchanges smoothly is essential for customer satisfaction in D2C deliveries. Managing the logistics LSPs’ stance on enhancing D2C SCM Efficiency
In recent years, the role of logistics service providers has become increasingly important for the growth of the D2C ecosystem in India. Companies like Prozo are aiding D2C players by streamlining their delivery processes through end-to-end offerings that encompass order management solutions, inventory management support, warehousing, and logistics. In the competitive landscape of e-commerce, a 2-3-day delivery standard has emerged, posing a challenge for many brands, particularly in the realm of last-mile logistics. Logistics service providers play a crucial role in helping brands navigate complexities such as proximity-based inventory storage, last-mile delivery, reverse logistics, and various other operational aspects. With the technological support provided by these logistics service providers, it has become significantly easier for D2C brands to enter the market and scale their operations across India. of reverse logistics processes, including restocking and processing refunds or exchanges promptly, can be challenging. Overstocking or understocking can lead to fulfilment delays and disappointed customers. Maintaining accurate inventory levels across multiple sales channels and fulfilment centres is critical for fulfilling orders promptly. Other challenges include strong customer communication, timely COD remittance, weight discrepancies, etc.
We believe that LSPs and D2C brands should collaborate to create a seamless supply chain. The relationship between Logistics Service Providers (LSPs) and Direct-to-Consumer (D2C) brands is inherently complementary. D2C brands, with their unique needs, find ideal solutions through LSPs to kickstart and grow their businesses. LSPs offer control over order management and delivery processes by integrating various platforms, such as Order Management Systems, Inventory Management, and Supply Chain Management processes. This integration provides D2C brands with access to effective data-driven inventory planning and helps identify potential weak links in the supply chain, allowing proactive anticipation and overcoming of challenges.
Moreover, the incorporation of advanced technologies in all operational aspects by LSPs provides D2C players with complete real-time visibility over their supply chains. This visibility facilitates cost efficiencies, ensures on-time deliveries, manages reverse logistics seamlessly, and fosters superior organic growth for the brand. A collaborative approach with a long-term vision can help build trust and reliability between D2C brands and LSP players with mutual benefit of brands and customers alike.
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