Friday, June 22, 2012

E-Commerce India - Customer Relationship Management (CRM)

Customer is the King or Queen. That is even more so in this Internet Age where customer experience can get shared easily using social media. The establishment of relationship with the customer starts the moment he includes a few items in his shopping cart of the e-commerce store.

Once the customer selects items and make payment, the order is supposed to have been captured. The order details along with items purchased, quantity, delivery address and any special instructions like gift wrapping or pre-defined time of delivery are to be provided to the fulfillment team. Based on the type of payment - cash on delivery or pre-paid - the process differs for delivery of items purchased.

The moment order is placed, the customer would be keen to receive them as per the delivery dates promised by the vendor. There must be a provision for the customer to track his orders on the e-commerce site where he purchased the items. Sites like Flipkart, owing to their own delivery services, provides that mechanism on their site itself. In cases like Indiatimes Shopping, the delivery status can be verified by using the tracking number associated with the 3rd party courier service (like Bluedart or Dhelivery) mentioned in the Order. For a customer, it does not matter how the delivery happens as long as it happens in time. For e-commerce companies, the operations to support delivery forms the backbone.

Whether the customer experience has been good or bad, it must be captured in a system for critical analysis later. The issues could be about payments, shipping or the item itself. Any immediate problems must be addressed with a sense of urgency. Customers in India (not sure about global space) are sensitive about payment issues, even if the amount involved is small. So issues like double charge for the same Order, refund of money in case of credit-card payments for Order cancellations or issues related to discount must be addressed immediately. Otherwise, the risk of losing that customer and hence his entire network of online buying family and friends looms large at the e-commerce vendor. My bad experience in shopping with Indiatimes was effectively addressed by the company.

Once the customer is happy with his overall experience on an e-commerce store, he is going to come back again. The entire e-commerce business hinges on acquiring large numbers of such customers, who provide repeat business. Hence, it is very important to keep track of such customers and provide benefits to them for their loyalty.  I have not seen any e-commerce store in India offering any substantial loyalty services. Or maybe I have not come across one so far.

But, information about new products, special discounts, pre-launch offers and clearance sales needs to be dispatched to all the customers on regular basis to keep the touch-point with them alive.

Needless to say, e-commerce companies must rely on information technology for all the above CRM needs. Customer, order, shipping, payment and feedback information gets stored in appropriate database. Huge amounts of this data can be moved to data warehouses and analyzed for business insights.

E-mail, Chat and Voice Support are the primary channels through which customer communicates with the e-commerce company. One key aspect in providing support to the end-customers is to integrate all these channels at the back-end. Irrespective of the channels I use - this could be many for an issue with the same order - to complain about an Order, it must be resolved.

If you are an end-customer - did you get that wonderful experience from that e-commerce store?

If you are an e-commerce company - could you acquire and retain customer and improve the loyalty base over a period of time through CRM?

Friday, June 15, 2012

E-commerce India - Inventory Management, Warehousing and Order Fulfillment

T S Eliot quote about beginning and end
While e-commerce store front (website) provides customer interface on the Internet, good back-end operations lead to customer satisfaction. One of the important back-end operations of e-commerce is inventory management. When the customer browses the site, selects an item and makes payment, the item MUST be shipped to the customer in time. For that the item must be either produced by the e-commerce company itself or procured from a 3rd party.

If the procurement has to happen from a 3rd party, it can be arranged in different ways:
  1. Drop-shipping
Items can be bought from the 3rd party just in time and shipped to the end-customer. In this case there must be direct connection for the e-commerce company with the appropriate vendors, dealers or publishers. In cases like Sweets and Snacks this will be the modus operandi, unless the vendor himself manages the e-commerce store.
  1. Warehouse-based shipping
Certain quantity of items can be procured up-front, stored in a warehouse and shipped to the customer based on the order.

In the second case, the quantity of inventory that needs to be maintained in the warehouse has to be controlled appropriately. If there is less quantity of inventory then there would be inherent delay in procurement and shipping. If there is more than required quantity, the unnecessary occupancy of the warehouse would lead to financial disadvantage.

The inflow (from the suppliers) and outflow (to the end customers) of goods must be tightly controlled in the warehouse to restrict any damages and pilferage. The orders taken for delivery in a day must be reconciled at the end of the day to match shipments and pending orders.

If the e-commerce company has its own warehouses, the location and number of these should be carefully selected. Any shortages or excesses and wrong locations would drain all financial resources of the company in no time.

One can also outsource the warehouse and order fulfillment operations to a 3rd party. From experience (as mentioned in the book by Tony Hsieh), one can understand that it is risky from different perspective to outsource such operations. Needless to say, one needs to be wary about outsourcing such operations.

The last part of order fulfillment involves delivery to the end customer at his premises. This is done by:
  1. e-commerce company's own courier service (like in case of Flipkart)
  1. Private delivery service center (the likes of DHL, Bluedart…)
  1. Government courier service from Post Office
  2. Hybrid of all the above modes (typical case)

With Cash-On-Delivery (CoD) becoming an important payment mechanism the delivery person not only has to ship the items, but also collect money from the end customer. There are companies like Gharpay, which specialized in cash collection.

Also, there are local companies which specialize in delivery of certain items and one such company is Delyver in Bangalore.

There is ample scope for companies operating in this domain to expand and increase the scope of their activities. There is also talk about Amazon and Walmart setting up their own courier operations in India and becoming successful Giants in the Indian e-commerce space. Let's wait and watch !

Saturday, June 2, 2012

My bad experience with Indiatimes Shopping, an E-Commerce site in India

I know this post is very lengthy. But please do read for your own benefit !
I looked at so many e-commerce websites in India and done shopping on a few of them. I always used to think that all the sites look alike (is it not as easy as search, select and pay) and its very different to differentiate the services in the e-commerce domain. I felt that to be the reason for not much of competition in each of the domains (books, gadgets, apparel etc) and hence a few players.

I read " - Delivering Happiness" book and wondered how Tony Hsieh could create so much impact through the customer service while focusing on selling only shoes online !

I was wondering how big guns like Futurebazaar can compete in a market growing with new entrants.

I knew that e-commerce is a long term game and it took eight solid years for Amazon to break-even. My initial impression was 'what was he doing for so many years apart from expanding the coverage and product base?'

Apart from Internet penetration the other major enablers for e-commerce adoption are credit-cards usage and trust. I was thinking earlier about 'trust' in the form of payments and delivery.

The thread that runs through all the above thinking is about 'customer experience'. I had a first-hand experience to understand about what could go wrong with customer experience in an e-commerce company.

Being an avid reader, I was greedy on my part to be tempted on a '30% more discount only for 3 days' offer by Indiatimes Shopping site. I went to the site on third day and browsed through the catalog.

I found multiple versions of a book and thought of them as different editions or paperback / hard-cover or indian / foreign editions. I wanted to check them all individually, but the site was inaccessible on every other request.

I selected the three books I wanted and went to 'check-out' option to review and confirm my order. To my surprise I found no option to navigate back to the main site and leave the check-out process in the middle. I personally feel this is restricting the user to not abandon the shopping cart. But I guess no one would like this option, given a choice.

I provided the payment details and got the 'Verified by Visa' page from payment gateway. I provided the code, which was verified and the redirection to the site was happening. As the Indiatimes Shopping was down (or probably not able to sustain high loads) at that time, it showed me an error page. This is a classic case of 'hung payment' when the user would not know whether his payment was through or not !

I checked the status of my order status through 'My Order' tab. It showed that my order is captured. The status column said 'Created'. I had to wonder what that really means ! Surprisingly, the 3 books I selected to buy earlier are still present in the shopping cart !

I haven't got a transaction SMS from the credit card provider. Usually these SMS messages come even before the re-direction to the site happens. I was puzzled that there was no message yet on that occasion.

I called up the voice support number that was provided on the website in each of the header pages. I got an 'invalid number' message !!

I was happy to find a chat option on the website and initiated chat. I got a welcome message and after a few seconds, I got an automated message saying that all the customer executives are busy. I was advised to leave a message, which I promptly did including my contact details. I never got a response from their support team through any channel - phone or e-mail.

I waited for an hour and checked my order status and it has not changed at all. I did not receive any SMS messages, phone calls or e-mails on the issue.

I found another number on their site and called-up that number. My order was verified and I was told to wait for an hour or so to see any change in status. I had no better option but to wait. Apparently, this is no toll-free number. I call up to raise a complaint about their system and pay for it too !

I provided my feedback on the site with all the details. I got an automated e-mail that the feedback is received. I haven't heard from their feedback team yet.

I waited till evening and checked the status of the order. Nothing changed. I thought I shall try to place the order again. As the items were still hanging in the 'Cart', I went to 'Check-out' process and tried to provide the gift coupon code. Surprise - no discount was allowed on the code !

I raised a case against my order. Yes, they have an option to report a case against an order. Not sure, if there is anyone looking into the cases at all - there is no response yet !

I called them again at about 6 PM in the evening and here is the conversation I had with the customer executive (CE):

Thanks for calling Indiatimes Shopping. How can I help you?
Hi. I placed an order with Indiatimes Shopping. My order seems to be captured but the items are still hanging in the shopping cart. I have not received any confirmation of my order. Can you please confirm the order?
Give me your order number please.
Here it is…
[ does something for a few secs ] Sorry sir. All our systems are down currently
So, what happens to my order?
Sorry sir. All our systems are down currently
Let me know how you can help me. Can I speak to one of your seniors? I have no complaints about YOU, but I just want to give my feedback about the system.
Sorry sir. All of them are busy right now.
So, what do I do now?
You can call us after half an hour sir. Or much better, you can call us tomorrow.
But the offer closes tonight.
Sorry sir. All our systems are down currently.
Ok then.
Is there anything ELSE I can help you with sir?
Yeah, Sure ! Can you get me a scoop of Coconut Ice-cream with Cone from Natural's? [ Click … ]

Except for the last statement the rest of the conversation is verbatim that happened with the customer executive. It's an understatement if I say 'It's heights of worst customer experience' !

I later got a couple of transaction alert notices from my credit card providers. I guess it happened through transaction reconciliations at later point in time. I don't know why it's duplicated. Now my money is taken, but there is no response or order-change status from Indiatimes. Apparently, I noticed this delayed response and delivery from this vendor from others' experiences shared on Internet.

I tweeted to them on twitter and got a cold and canned reply 'We regret your inconvenience…'.

As you could see, no unit of the customer service department functioned effectively and the lack of integration among all these units - online chat, feedback on website, order complaints, call center, twitter - was quite obvious. If the entire system had unexpected load, they could have at least devised a pro-active plan to deal with customers without losing their image.

Two lessons from this experience:

  1. For all those entrepreneurs venturing into E-Commerce domain, remember that 'customer service' is the key. With all the experience I had at this shopping site now, I would not dare shop at their site in the near future - even if they give me 90% discount. Integrated functioning of the entire customer service department (and also with other departments) is quite important. Having no physical retail outlet, the website and the people over the phone becomes the 'face' of the company.
  1. For all those online shoppers, beware of all the typical problems while shopping online. Share your experiences with others so that they would benefit while shopping on e-commerce sites; also, this would help the trustworthy companies to surface to the top.

If anyone has any other good or bad experiences, I would be happy to listen. Please do share  your experiences with one and all for their benefit.

If anything happens to my order, I will let you all know :-)