Six things that E-commerce companies have to get right

Having been part of the e-retail journey as a customer for the past few years and as a consultant  for the past two in India, I have seen pretty much the entire spectrum of sites from really pathetic to very good, although only couple of them stand out at the top consistently.

    As many single retail shops want to get an e-presence now and putting up websites, they have to be conscious of six things (five if you take the first one out) that would lure customers to their site:

(I) Price:  For specialty and high end luxury items, you can discard it as people with big wallets just come in to buy from here for a ‘status symbol’.  But since it is easy to compare across different e-tailers on the web, it is imperative that the PRICE is absolutely competitive with other sites and much less expensive than a brick-and-mortar price with FREE Delivery. Price to be compared is the actual selling price plus any delivery charges….

(II) Security of transaction:  Absolutely critical to ensure the customers are at ease when they transact. The default and safest approach is to do Cash on Delivery (CoD) at no additional charge – I know lots of friends who do not buy if CoD is not available, that too at any extra charge. This makes the seller more accountable as he does not receive the money before the product even gets shipped – he would be longing to close out on his ‘receivable’.  The ONUS is not with the customer – his attitude can be, if it comes great, if not, not to bother.  So the site has to be approved by all the Transaction gateways available that are secure and must be cleared by all reliable known virus software there is.

(III) Ease of Return and Refund:  I cannot understand still why Amazon India cannot do replacement – they do only returns and refunds.  They should not ask the customers to print return slips and keep the invoice and put it back in original packing etc.  Especially if the frame of mind is to return or replace, these are additional pain points that no customer must go through. And their pickup of the goods must be efficient and guaranteed within a time window of couple of hours – not an entire day waiting for it to be picked up.  And the pickup must happen on the very next date after the refund or replace was logged in to the system and the couriers have to be punctual.  I do not see all these happening in most of the cases. Usually we are at the mercy of the couriers who do not turn up on the date or the time specified, and some e-tailers want us to keep the invoice, original package and the return slip printed out – not everyone has a printer here. And anyone in the family who received it would have opened up the package and not retained the invoice! E-tailing is all about understanding the customer’s behavior well.

(IV) Own inventory and courier helps a lot:  A 100% market place sort of E-tailer is at the mercy of the vendors.  The E-tailer in this case just provides a platform for all businesses to sell. They have absolutely no control on the way the vendor packs the goods, ships it on time or not, and no grip on the quality of delivery.  If the vendor packs something and it comes in broken to you, you are asked to send photographs of the same back. If the vendor does not ship on time and it does not meet the guaranteed date, then this is a big issue – this happens when we need something for Diwali or some event and the goods do not arrive in.  Having their own inventory shop and go downs in major cities for easy shipments eases a lot of issues and since they buy in volumes, their own shop gives the best price in the catalog.  As for having the courier of their own, this ensures that the entire chain is managed by them, thus increasing accountability of the delivery. Being at the mercy of the inefficient external third part couriers is going to degrade their business. Unless someone ensures that they are in the check point process with all the vendors to ensure the packing, shipping and delivery is correct, and take complete ownership and not blame the vendors for any incidents, your entire commerce system is susceptible to criticalities in its chain. Customer can and will hold E-tailer responsible.   Of course, there are local laws and regulations that may prevent the e-tailer to also be the seller, especially if it is a foreign company, but there must be ways to circumvent the problem legally.

    Having said that, it is in the best business interest of third party couriers to align with several good e-commerce sites and take them as customers and adhere to their vendor policies and regulation and make the best out of the situation. They should not act as if they are the ‘outsider’ in this transaction but a value-adding partner in the whole commerce.

(V) Customer Experience:  Along with the above owned inventory and courier, this is the other most important part that E-Tailer has to provide without any excuses. By experience, I mean ease of the website to transact, the website having detailed and right description of the product and all reviews associated with it, ease of different options for secure payments, getting the products on time EVERY time within the guaranteed date in normal delivery, having the products delivered in good quality so that it meets what they are looking out for, thus avoiding any replacement or refunds(‘one gets what they asked for’), keeping the customer informed if the product is getting delayed due to various factors, etc. so that the customer is at ease at every step of the transaction and delivery.  Better still is to have some good escalation path clearly documents names with phone numbers and email – this shows they have the utmost interest to improve and delight customers.  If you take the Ahmedabad based e-tailer Infibeam, who are pretty decent, somehow they lack the refund and replacement button in the order chain which makes one feel uncomfortable about the experience in the site.  Lots of metrics must be tracked on a regular basis by the management, rogue vendors must be taken off for repeated mistakes so that they do not spoil the name of the e-tailer, refund processed within a day, etc. all these would add to loyalty of the customer to come back.  I somehow feel Flipkart (and Myntra which is part of FlipKart now) and Snapdeal are to be appreciated here although I believe they still have a long way to go and they must be improving on making the CUSTOMER HAPPY All the TIME.

(VI) Respect for Local TAX and Accounting:  If an international chain wants to set up shop here, it is better that they understand the LAW of the LAND – they must look before they leap.  They cannot complain after having started their enterprise in a local country that the laws are not conducive for their business.  If one has not done their homework, and has not understood how to run a business here, it is no fault of the local government but purely theirs.  Failure to understand the market to do business in is totally unacceptable and I would certainly blame the management for the same.  Being LEGAL in the land they do business in is critical. There would be lots of foreign direct investment (FDI) regulations that one has to adhere to, as the local government would like to protect the local interests first and not to give undue advantage to anyone from outside to do business in one country, all things applying equally.  If they want to have certain things change, there is always a legal lobbying route that they can take to address their problems and work out things with the local government.  This is certainly not the area that I can talk with confidence but there are experts who can guide any multinationals to do business in one country and there are many successful ones who are running their show for a long time now.

   As I write these, I am sure we would be a few successful ones standing after a few years in the e-commerce arena and a handful of logistics companies doing a great job as well, but most likely that many of the today’s e-commerce players and logistics companies would not exist in couple of years.  Not everyone can be a reliable e-tailer.  It takes some good leadership, strong accountability and conducive commerce laws that would differentiate the best from the rest.

The author is a business consultant based out of Bangalore and has been in the IT industry for two decades across various domains.

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