Pick me up

Major online retailers are betting on offline pick-up stores to spread their reach

The doorbell rings. Once, then twice. The man outside the door stands in wait for someone to respond and then eventually calls the person he’s got a special delivery for. The person on the other end of the line just asks him to leave the package with the watchman.

With the proliferation of e-commerce options, the online ordering struggle is real and often comes with its own hassles. And that’s just one part of the story — there have been multiple cases of prank deliveries or prank orders being placed with companies online and the wait for an order on the expected delivery date remains a problem for customers as well.

Well, some companies have begun working on a solution. It all started with Amazon, which first introduced the concept of offline pick-up points in the country. As part of the Amazon ‘Pickup programme’, the company enabled over 1,100 kirana stores, 35 BPCL In & Out stores and individual entrepreneurs across more than 50 cities — including Bengaluru, Delhi, Mumbai, Hyderabad, Vellore, Nashik, Vijayawada, Thoothukudi, Thanjavur, Tiruchirappalli, Manipal, Vadodara, Salem, Ludhiana and Rajkot.

 By way of this programme, customers — while placing an order — can choose to get the products delivered at the location nearest to them from the list of available pick-up locations. From the designated pick-up point, they can then pick their orders or return them as per their convenience at locations such as kirana stores, bakeries, flower shops and travel agencies. 

Says Samuel Thomas, director, transportation and logistics, Amazon India, “We have seen owners of kirana stores, bakeries and flower shops coming forward to act as delivery and shipment pick-up partners, as they are witnessing higher footfalls and incremental business through this route, creating a win-win situation for all.”

Amazon also plans to identify and train the staff at these pick-up points to smoothen the transition, which in return will add to more purchases at the store. Arch-rivals Flipkart and Snapdeal are not far behind, if not the first-movers. Calling them experience zones, Flipkart has also launched pick-up points in 10 cities across the country as of August.

Neeraj Aggarwal, FlipkartWhen asked about the benefits of such a move, Neeraj Aggarwal, senior director, delivery operations, Flipkart, says, “Our offline pick-up model addresses some key challenges faced by us — the unavailability of customers during delivery attempts, restricted entry of delivery boys into IT parks, gated communities and educational institutions and customers waiting the entire day to receive a shipment. The customer today would also appreciate value-added services such as open-box delivery and instant returns or exchange.”

The model being tested by Flipkart is relatively new and does not cover as many touch points. It promises to, however, offer the following services — spot trials, reverse pick-ups, instant return, open-box delivery, cash on return, exclusive product demos, assisted buying and third-party services such as alteration, repair and the likes.

Earlier this year, Kunal Bahl of Snapdeal had announced that the company planned to push the organisation through all possible channels. Reports quoted Snapdeal as looking for an omni-channel presence by making products available offline through retailers.

Tony Navin, senior vice-president, partnerships and strategic initiatives, says, “Online retail is still a very small part of the overall retail consumption in India. Most retail orders happen offline, when customers feel the need to touch, feel and experience the product before they make the purchase. This is to cater to those customers.” As part of this initiative, Snapdeal has tied up with fashion retailer Shoppers Stop as well as Hero Motocorp to be able to tie up with select outlets across the country and reach its customers better. 

Tony Navin, SnapdealSome key advantages aside, what are the costs that these businesses are bearing while trying to win over customers? There is the issue of high real estate prices. Aggarwal, however, remains unperturbed, “Our pick-up centres are just about 500-1,000 sq ft in size and will be located at prime properties. At smaller locations, pick-up centres will gradually open up as and when we see a rise in the volume of purchases from that region.”

Flipkart claims that its new delivery model will, in fact, reduce last-mile delivery costs by 25-30%. Besides this, there is also the cost of training people for the processes involved and making sure the transition remains smooth. Says Navin, “What is important is to partner with the right folks and get things in order. That way, not only can we ensure that the customer experience remains untarnished, but we will also be able to piggyback on our partners’ infrastructure to be able to make the transition.”

Says Natarajan Radhakrishnan, senior vice-president and offshore head, Capgemini, “The offline pick-up model should ensure the quality of service at the pick-up centre. If they don’t pay attention to this, then it could adversely affect the consumer’s entire shopping experience.”

That said, he agrees that this delivery model makes the most sense in areas with low population density, especially rural areas, where individual deliveries turn out to be expensive. He adds, “In the long run, larger e-commerce vendors should partner with large physical retail chains so that they can be used not just for offline pick-ups, but also as physical extensions of online commerce.”

Radhkrishnan explains that this also helps the logistics arms of e-commerce players save on last-mile delivery, since the process is human-heavy. “Having a physical presence — however small though it may be — can help build a brand’s credibility.” After all, isn’t delivering on their promises — both literally and figuratively — the biggest challenge that e-commerce companies face?


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