“Are your customers completely satisfied with your services?” If we ask these questions to even the top tier etailers in India, how many of them can give a positive nod, and with conviction? Maybe only a handful or none.

This is in fact, one of the most uncomfortable question that has been haunting the e-commerce companies in India. The reason? From the time e-shopping became a way of life, and online portals witnessed a spike in sales volume, delivering products on time has been posing a major challenge. Customers expect to receive their orders fast, making delivery a critical element of the complete e-commerce experience.

Meeting customers’ expectation on delivery is particularly difficult because they are widely scattered across metropolis, small towns, and even in remote areas. Such diverse locations have their own set of challenges. For example, in the cities, customers mostly aren’t home during the day, and their parcels are often returned to the courier warehouse for subsequent delivery attempts. Such delivery issues are bringing down the credibility of e-tailers, leading to dwindling customer satisfaction (C-SAT).

Why is Customer Satisfaction so critical to E-commerce Sustainability?

No one else knows the answer better than the Indian e-commerce giants. Several leading e-com portals have already taken a hit in their revenues, and the amounts of losses are alarming! Since there are no robust and effective C-SAT metrics that e-commerce companies use, they find it hard to get data on customers’ inputs, which makes the matter even worse.

The following statistics show how e-commerce sites are feeling the heat:

In the financial year of 2015, the Indian e-commerce giants reported accumulated losses of Rs.7,884 crores. The three top-tier companies such as Amazon, Flipkart, and Snapdeal suffered losses of approximately Rs 5,000 crore! On top of it, the total market share of these top three e-commerce companies fell from 91 percent to 83 percent.

The major contributing factors to such whooping amount of losses were pricing, huge discounts, free shipping, and spending large sums on advertising to attract customers. Other underlying factors have been Lifetime value from a single customer (LTV) and Customer Acquisition Cost (CAC). For example, if the ratio between LTV and CAC is 1:2, it means the cost of acquiring customers is twice the value that online portals get from a single customer.

Even though eventually everything boils down to cost, the underlying factors as mentioned above along with inefficient supply chain networks (including Last Mile) can spell doom for online portals. This is why it is imperative to fix the weak links such as last mile delivery can significantly improve customer satisfaction.

How Parcel Lockers can turn things around for E-commerce portals?

One of the key benefits of automated parcel lockers is that they provide total customer experience. Consumers can pick up their parcels whenever it is convenient for them without having to worry because parcel lockers are robust enough to prevent theft and withstand harsh weather if installed in an open area.

On the other hand, from the perspective of e-commerce companies, they can cut down the logistical hassles along with the spiraling cost.

A Morgan Stanley report reveals that India’s e-tail business is estimated to reach $159 billion by 2020, which means, a concrete solution to the last mile needs to be rolled out right away and Parcel Lockers are providing a smarter delivery solution for e-commerce portals, logistics companies, and customers.

Well, online shoppers in India have a reason to smile as companies like ‘Smartbox’ have brought in the same solution for the “devalued” e-commerce giants and annoyed online shoppers. Customers can collect their parcels anytime from a conveniently located Smartbox terminal on the way back home or during an evening stroll.

The Way Forward

E-commerce businesses in India have started realising the significance of sustainable growth, and consolidation. They no longer want to depend too much on Gross Merchandise Value (GMV), discounts etc. Companies have gradually started taking steps towards a parcel locker solution to provide customer delight. Some of the e-commerce companies have gone through an overhaul by replacing their existing inventory model. They are also inclining towards Net Promoter Scores (NPS) to measure of customer loyalty. This is surely smart thinking, for smarter future!