Writing the ecommerce growth story through small warehousing

As the Indian ecommerce market space continues to be transformative in its approach, the growing need for optimising the efficiency and speed of online order fulfillment has now come to be recognised.

Be it for household items, groceries, or accessories, a larger number of consumers have now migrated to online platforms giving rise to expectations of more efficient delivery.

Between March and July 2020, ecommerce as a whole, and especially the sub-segments like grocery, in particular, grew multifold, thanks to the offline restrictions diverting a large number of buyers to the more easily available options online.

The absence of a functional physical store in their neighbourhoods saw not only Tier I and II, but also Tier III cities adopt the online route for their purchases, making it a safer, more reliable, and hence more preferred way of making purchases.

With authorities encouraging people to stay indoors as much as possible, online ordering seemed like the only way out. 

By making a higher variety of products available in sufficient quantities and ensuring they can offer ease of transactions, ecommerce marketplaces have established an easy and trustworthy system of online purchase for buyers that were caught up in a state of chaos during the beginning of the first lockdown, giving them a safer, more reliable alternative.

With multiple other sub-segments also seeing an upward purchase trend, ecommerce has now reached this stage where it is critical for major players to be able to support direct-to-consumer (D2C) delivery while also focusing on improving fulfillment to ensure maximum buyer satisfaction and retention.

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Micro warehousing

Having garnered more users, the ecommerce players are looking at innovations that will help simplify overall operations. Micro or small warehousing is one such concept that is being tried out; for the logistics-related operational benefits, it provides to all the involved parties - sellers, marketplaces, and buyers.

The concept involves setting up multiple small warehouses in or near Tier II and Tier-III cities to ensure faster delivery. 

The world today is looking at everything being available at the click of a button, consumers prefer faster delivery over free shipping with many of them willing to pay extra for shorter delivery periods. This has given rise to marketplaces using faster deliveries as one of the most important perks for customers to buy subscriptions/memberships.

The foundation of the small warehousing concept can be linked to food ordering, with marketplaces offering same-day delivery. 

Having a warehouse as close to the end consumer as possible is where we are headed to. In the metros, ecommerce players are already offering facilities like same-day, one-day delivery, and logistic automation with major players even allowing customers to choose a convenient time for the deliveries to be completed.

A robust warehousing network distribution makes it possible to receive deliveries even within hours of making the purchase not only in metros but other locations with high demand as well, ensuring that more and more customers have access to better delivery services and businesses have expanding reach.

Shortening the distance

The unpredictable nature of fulfillment requirements for different geographies makes the implementation of a hub-and-spoke like distribution model for the companies worthwhile, in fact even a necessity in many parts of the country.

Small warehousing will include delivery centres that act as hubs and micro-fulfillment centres that work as spokes. Both work in perfect coordination to help ensure proximity to different cities and towns while also providing the urban population the option of an in-store pick up as per their convenience.

Smaller warehousing also reduces the burden on online sellers who often struggle with the replenishment process due to supply inadequacies that lead to stock outs and delayed shipments - problems commonly faced by organisations due to restrictions like the ones we had to face several times this past year. Micro warehousing provides for ample replenishment time, ensuring that customer satisfaction stays peaked.

Reducing the distance between a product and consumer ensures that it gets delivered in the best state without having to go through multiple transits. Small warehousing improves supply chain optimisation and replenishment of stock on the seller side while also offering a superior customer experience, making it a practice ecommerce players look forward to adopting.