Learning from their past
mistakes, e-commerce big boys have ramped-up their tech backbone infrastructure
and forecasting capabilities to win over customers this sale season
Last year Snapdeal' e-commerce platform handled 30 orders per
second during the Diwali sale; this year it has handled 300 orders per second
in its weekly festive sales. To handle huge traffic, the marketplace player has
used a range of forecasting models and analytics tools to predict demand for
products and ensure sufficient stocks are available with its sellers when the
products goes on sale. It has 1,500 engineers to deal with the huge surge in
traffic during sale time.
Snapdeal
is among the growing breed of ecommerce players in India that are leveraging
technology to address sale-time woes. Flipkart, which had to issue an apology
last year for jacked-up prices and product unavailability during the Big
Billion Day, was able to run the show successfully this year with a few minor
glitches on Day 1 of the second edition of the big-ticket event. Ankit Nagori,
chief business officer, Flipkart, says, "Compared to last year, the number
of customers has more than doubled. There is also a huge increase in our seller
numbers. We have ramped up across the board - be it our warehouses, call centres,
our delivery mechanism and technology stacks - and this has paid off rich
dividends. We have definitely done better than 2014."
Unlike
last year, the Big Billion Day 2015 was spread over five days and restricted to
its mobile app.
Organising
such large sales events online requires seamless matching of consumer demand
patterns with supply-chain logistics. Says Indranil Mukherjee, vice-president
& global practice lead for systems, SapinetNitro, "Before going into
big-ticket sale event, e-commerce players must use analytics to understand the
typical customer journey from evaluation through consideration and purchase -
on different channels (website and mobile app) and then accordingly determine
demand patterns across categories."
Amazon,
known to use data analytics and technology to manage massive sales events like
Black Friday, Cyber Monday and more recent Prime Day in the US, has been
incorporating its global learning in its India operations. Its recently
concluded The Great Indian Festive Sale was four times bigger than the last
year's Diwali promotion event and two times bigger than the previous big day,
The Great Indian Freedom Sale, in August, 2015. "Given our expertise in
web services and hosting, we are prepared to handle enormous traffic in a manner
that enables a seamless and frictionless shopping experience for millions of
customers in a sale event," Samir Kumar, VP, category management, Amazon
India.
Net-net
it is the strength of the technology backbone that decides the fate of the sale
event. To accommodate 10X jump in traffic during a sale, one needs to
significantly ramp-up the supply chain, technology and forecasting capabilities.
The
Strategist looks at how the biggies in the e-commerce space are playing the
technology card for better experience this festive season.
The user
interface is the only thing that a consumer sees and interacts with. So if your
site freezes during the sale or fails to load, the whole idea of organsing the
event is lost. In July this year, Snapdeal refreshed its user interface, across
all platforms: the web, WAP and app. "The refreshed interface has been
designed to give our products an uncluttered look, to make navigation easier
and create more focus on visual elements, especially during a sale. We recorded
a 99.99 per cent uptime on the website, WAP and App during our October
13-October 17 Diwali sale," says Rohit Bansal, co-fouder & COO,
Snapdeal.
In
addition to increased infrastructure capability and optimised architecture to
handle 20X traffic, ShopClues has introduced a new feature ShopClues Connect to
initiate chat between customers and sellers, so that customers can negotiate
with sellers directly. "We have also introduced image search solutions so
that customers get recommendations based on visual appearance of products. This
is very important in fashion and other unstructured categories, especially
during a sale. A deal discovery platform for faster discovery of best available
deals on a single page, has made navigation faster," says Gyanesh Sharma,
AVP, engineering, ShopClues.
Effective
management of supply-chain logistics is a key to the success of a big sale
event. Industry data suggests the number of first-time users placing orders
online is quite huge during festive season sales. A poor experience in terms of
cancellation of orders, out-of-tock issues, price changes and delay in delivery
can seriously dent an e-retailer's image.
Snapdeal
committed a $300 million investment this year to strengthen its supply chain
and logistics. "We have already invested a large portion of this money
into our supply chain and logistics, including Gojavas - to enhance our reach.
Along with the introduction of services like under four hour delivery for
exclusive launches, card on delivery service in over 100 cities and 90 minute
returns pick-up across 70 cities, it has resulted in 70 per cent improvement in
delivery time over the last six months," says Bansal.
Snapdeal
now has 1.3 million square feet additional warehouse space across 63 fulfilment
centres in 25 cities, close to majority seller and buyer locations. "We
rely heavily on analytical tools to plan volumes on different shipment routes
according to the load capacity on a real-time basis," says Bansal.
Predictive
forecasting and analytics enable sellers to forecast demand and plan
inventories before a sale to avoid any out of stock situation. "Snapdeal
has set up a remote control-and-command centre to facilitate real-time
monitoring and spot fixing. We monitor load across centres to identify
bottlenecks. We have early warning systems for shipping legs allowing us to
plan shipment volumes accordingly," says Bansal adding, this enabled 98.6
per cent on-time deliveries during the October 13-October 17 Diwali sale and
98.9 per cent orders dispatched within 24 hours of order placement.
To enable
fast and reliable delivery even in remote areas during the festive season,
Amazon has in the past few months put together a vast delivery network. It
expanded the Amazon Logistics footprint three times, opened eight new
fufillment centres (FCs). Today it has 21 FCs operational across 10 states
covering a total of over 2 million-square-feet of space with a storage capacity
of over 5 million cubic feet. It is working with NGOs in rural India to
establish rural distribution centres. "We pioneered morning delivery
service in India during The Great Indian Festive sale wherein customers can
place orders as late as midnight and get the items delivered at their doorstep
by 11:00 am. During the Great Indian Festive Sale, over 65 per cent orders came
from Tier-II and Tier-III cities and towns .We are shipping 60 per cent of the
customer orders in less than six hours," says Samir Kumar, VP, category
management, Amazon India
For
Flipkart, big data analytics is a tool to understand people's preferences and
improve customer engagement. "Through the data collected from the various
interactions with our customers on the app, we have been able to offer
customers various benefits: personalised category recommendations, fashion
taste and preferences and location-based recommendations," says Ankit
Nagori, chief business officer, Flipkart. During the recently concluded Big
Billion Sale, Flipkart sold more than 8 million units, with a total of 5
million app downloads.
"The
number of FCs were ramped-up from 13 to 17 this year so that customers from
smaller cities could shop with us too. In order to smoothen the backend
process, we increased investments in automation technology. We also started
implementing the automation technology to pick and move packages to designated
pick-up stations, among several other applications which made our warehouse
processes quicker and smoother," says Nagori.
In terms
of supply chain support, Flipkart has built a team of 20,000 delivery boys this
year compared with 9,000 last year to ensure efficient delivery. Also to
prepare its sellers for the sale, it launched Turbo Charge Campaign aimed at
enabling small sellers to streamline the back-end processes involved in
handling the massive customer demands during this period. Sellers are now given
special packages on inventory and enterprise management to handle peak season
sales.
As is
evident, the big boys of e-commerce are leaving no stone unturned to put in
place the best of the technology across all customer touch-points. The latest
search technologies (search needs to be simple, fast and contextual),
personalisation technologies (to establish past behaviour or just to provide
reminders about abandoned shopping carts), cloud based hosting infrastructure
that ensures guaranteed uptime and provides scaling on demand, latest
navigation techniques etc have all been pressed into service. It is the overall
customer experience on the site and on the mobile app during the eventthat will
make or break the deal for e-comerce players. Indeed, in an omnichannel retail
environment, as competition from brick and mortar stores close in, technology
will be the key differentiator.
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