Last mile connectivity for e-tailers

One of the bigger challenges for e-tailers globally has been the last mile connectivity - delivering goods and managing returns.

This is an area where the e-tailers have been innovating constantly has it is far better than it was in the early days of amazon back in the early 90's.

Amazon has tried every trick in the trade on the last mile connectivity. Now with reports in India that Flipkart is going to try having collection centers for smaller towns, the debate on which method suits India is back out in the open.

Flipkart's Collection Center concept

Flipkart has always had a very good grip over what works for India - Cash on delivery being a brilliant example. They also started their own delivery service when they could not rely on the third part delivery vendors.

With collection centers operated by Flipkart themselves, Flipkart seems to have come up with yet another innovation. What remains to be seen is if it will work since users are now used to getting their goods delivered. The only advantage for the user is that the delivery will be reliable if they collect it from the collection centers.

Amazon's collaboration with brick & mortar stores

Amazon is planning on collaborating with the brick and mortar stores for delivering the goods. This is pretty close to the collection center concept of Flipkart, except that Amazon need not invest much.

Some of the advantages of this concept is that there is no extensive training involved and the stores may sign up since they could do seduce the customers coming in to pick up the orders.

The only challenge is that overtime stores will realise that Amazon is one of its competitors. This has been the case in US.

Comparison to similar models globally 

There have been other similar models used globally by e-tailers and retailers. Some of them are very good. However, they cannot be adapted to India easily.

The co-operative model

The co-operative model is one in which the stores of a specific business district form a co-operative. A customer could place an order from any store in the co-operative either on phone or on the internet and pick it up in any other store in the co-operative that he chose. 

The co-operative also handles returns and refunds thus making it very easy and convenient for the users.

The Omni-channel Model

The omni-channel model is the one used by big retailers who have started fulfilling orders from either the store or the warehouse based on the channel. For example, I can order grocery from Walmart and it will be picked and fulfilled by my nearest store and then get delivered to me.

Conclusion

We will need to see how the Indian buyers react to both the models and what would make sense to them more. In the coming years, I would not be surprised if there are more variations to the models as the market matures further.