Dear Readers,
As we step into March, we’re excited to present to you a diverse array of insights in this edition of our magazine. Our Cover Story this month delves into the dynamic realm of Direct-to-Consumer (D2C) Brands. It’s a narrative woven with expert advice on sculpting brand success and scaling heights in an increasingly digital and consumer-centric marketplace. These insights come straight from the thought leaders and pioneers who have navigated these waters with agility and innovation.
In an era where environmental sustainability is not just a choice but a necessity, our Feature article sheds light on the pivotal role procurement leaders must play. It’s an urgent appeal to these leaders to be at the forefront of redefining economic systems, transforming supply chains, and steering their companies towards sustainable business practices. This piece is a must-read for those looking to make impactful changes in a climate-challenged world.
Our Special Report this month is particularly close to our hearts, as it outlines the government’s vision for a ‘Viksit Bharat’ by 2047, as laid out in the Interim Budget 2024-25. It’s a blueprint for progress, with the logistics sector poised to be a key driver in this ambitious journey. The report not only highlights the recent policy interventions aimed at bolstering this sector but also provides a recap of the significant announcements made during the budget presentation. It’s a testament to the critical role logistics and supply chain management will play in our journey towards becoming the third-largest economy in the world, with a GDP of $5 trillion.
As we draw close to the end of the Financial Year 23-24, it’s a time for reflection and anticipation. The strategies we adopt, the innovations we embrace, and the policies we champion today will pave the way for the India of tomorrow.
Thank you for your continued support and engagement. Here’s to exploring the future of supply chains and logistics together, as we endeavor to contribute to a more connected, efficient, and sustainable world.
Warm Regards,
Charulata Bansal
Publisher
Charulata.bansal@celerityin.com
www.supplychaintribe.com
Published by Charulata Bansal on behalf of Celerity India Marketing Services
Edited by: Prerna Lodaya • e-mail: prerna.lodaya@celerityin.com
Designed by: Lakshminarayanan G • e-mail: lakshdesign@gmail.com
Printed by: Xposures, A 210, Byculla Service Industrial Estate, D K Cross Road, Byculla, Mumbai- 400027. Logistics Partner: Blue Dart Express Limited
D2C brands are portrayed by their agile DNA, innovative marketing, streamlined operations, and smart technology utilization. A shift in consumption patterns coupled with advancements in technological infrastructure are facilitating the move towards D2C models. Our Cover Story explores the fundamental principles behind successful D2C brands and offers the ultimate blueprint to not only survive but thrive in the vibrant yet competitive retail environment…
Saurabh Lal, Sr Director - Network Design, Logistics, Planning & Digital, Kellanova (formerly Kellogg), emphasises the importance of educating and enabling our workforce to adopt new technologies and methodologies.
The recently released joint report by First Movers Coalition of the World Economic Forum and Egon Zehnder, highlights that in a climate-challenged world, procurement leaders must take on a central role in reimagining economic systems, supply chains, and how their companies do business.
Effective logistics management serves as the cornerstone for the growth of D2C brands. It involves optimising processes, leveraging technology, forming strategic partnerships, and maintaining a customer-centric approach to ensure a seamless and scalable supply chain. D2C players reveal the complexities of an effective supply chain and the pivotal role of Logistics Service Providers (LSPs) in this ever-evolving journey…
Interim Budget 2024-25 – Laying out the ‘Blueprint for Viksit Bharat’ by 2047
The logistics sector is going to play a catalytic role in this ambitious journey and that’s precisely what the government at the helm has been emphasizing through recent policy interventions. Here’s a recap of announcements made at the recently tabled Interim Budget 2024-25…
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“Supply chains are undergoing rapid transformation with the use of machine learning and artificial intelligence, which can enable us to optimize our processes, reduce costs, and improve customer satisfaction. AI and ML based systems are the future of supply chains; however, I believe that the more pressing challenge is how to address the issues of data quality, skill development, and the transition from descriptive to prescriptive analytics and planning. We need to make sure the data we feed into our new systems is accurate and reliable. Moreover, we must train and empower our people to use the new technologies and methods,” stresses Saurabh Lal, Sr Director - Network Design, Logistics, Planning & Digital, Kellanova (Kellogg Asia Pacific Pte Ltd), during this interview…
How has the supply chain segment transformed over the years? What have been some of those defining moments?
Supply chains have transformed over the years to cope with the changing business environment and customer demands.
Some of the key transformations witnessed are:
a. Global sourcing and outsourcing: Many companies started to buy & sell goods & services from different countries, taking advantage of lower costs, similar quality, and greater availability. An interesting book on this subject is ‘The World is Flat’ by Thomas Friedman, which I read many years back. It analysed the impact of globalization and the opportunities it opened for people and companies worldwide. However, as we see today, globalization came with its own risks, which are playing out in the geopolitical arena today.
b. Manufacturing technologies: New technologies became available, reducing capital costs and allowing
companies to make their products faster, better, and cheaper. I still remember in my first job; we had a person standing with a stopwatch to measure machine efficiency and a single head form fill & seal machine controlled by cams was state-ofthe-art. Today smart factories have allowed us to control processes to improve productivity and single head machines have given way to 10 or even 20-head fillers, which has dramatically improved outputs.
c. Digital platforms: Many companies use digital platforms – from the basic ERP transaction systems to advanced computing, data management and internet of things. These platforms enable real-time data collection and analysis, enhanced visibility, and collaboration. The days of worksheets made using ‘123’ and limited email availability are long gone.
You have witnessed the growth of supply chain vertical from close quarters, both in Indian and overseas.
Companies have taken ambitious targets on the UN Sustainable Development Goals and Net Zero. However, achieving these is a complex and challenging task that requires data, connectivity, and collaboration among multiple players in the chain. There is a need for aggregators and climate platforms, which measure, report and reduce emissions for enterprises. We should see significant opportunity and execution in this space in the next few years.
What are the factors that still demand attention from stakeholders in India to be at par with the rest of the world?
India holds immense potential in becoming a global leader in supply chain management, as it has a large and growing market, a diverse and skilled workforce, and a strategic location. However, it also faces some challenges and gaps that need to be addressed by the stakeholders, such as:
INFRASTRUCTURE: India is investing heavily in developing its road, rail, air, and port network, but it still lags other countries in terms of efficiency, and capacity. We need to improve warehousing and handling facilities, especially for small and medium enterprises, and prepare for automation, such as using palletized loads, material handling equipment, thus reducing manual work.
DISTRIBUTION NETWORK: India has a unique and complex distribution network, with different types of customers, such as supermarket chains, kirana stores (small mom and pop shops), and e-commerce platforms. This requires supply chains to manage different delivery requirements and inventory levels across multiple tiers. With the introduction of the Goods and Services Tax (GST) and the improvement of infrastructure, this network needs to be redesigned to optimize costs, service levels, and customer satisfaction.
SUSTAINABILITY: India faces a major challenge in achieving supply chain sustainability. Reliable water management, and waste disposal, are still a challenge for industries though they are improving exponentially. Additionally, industries must comply with new regulations and standards, which are the need of the hour, such as the National
Green Tribunal (NGT) and the Extended Producer Responsibility (EPR), that aim to reduce the environmental and social impact of supply chain activities. We need to foster collaboration among companies, government, and civil society.
SKILLS: India has a high literacy rate and a strong aptitude for science and technology. However, we also suffer from a demand-skill gap, with lack of practical and vocational skills that are required for supply chain management. We need more investments in skill development and training programs, both at the academic and industry level.
How can companies achieve supply chain network optimization?
Supply chain network optimization is the process of finding the best way to organize and manage your supply chain, such as where to locate your factories and warehouses, and the most efficient transportation modes. Here are some steps you can follow to optimize your supply chain network:
Decide what is your end goal and time horizon: The first step is deciding what you want to achieve with your supply chain network optimization, and how much time into the future that you want to consider. Are you solving for cost or service or are both to be balanced?
Map your current network and costs: The next step is to understand how your supply chain network works now, and how much it costs. Collect data on the costs and performance of each node, such as inventory, transportation, labour, and overheads.
Build a working hypothesis: Brainstorm possible solutions and
develop some ideas on what you believe the future network may look like. Collect external data from similar industries as well as understand the drivers of your current network design. A new or modified network design may require adding, removing, or relocating some facilities, changing some transportation modes or routes, or adjusting some inventory or production policies.
Analyze parts of the network: Examine different parts of your supply chain network and see how they affect your goal and time horizon. You can use tools and methods such as SWOT analysis, benchmarking, or gap analysis, to identify the strengths, weaknesses, opportunities, and threats of each part, and compare them with the best practices or standards in your industry or market.
Test with simulations: You can use computer models or software to simulate your supply chain network and see how it performs under different scenarios and conditions, such as demand changes, supply disruptions, or price fluctuations. You will need a financial analyst to measure and evaluate the results, such as cost-benefit analysis, return on investment, or key performance indicators.
Ensure you manage risks and sensitivities: The final step is to make sure that your optimized supply chain network is robust and flexible and can handle any changes or uncertainties that may happen in the future. Risk analysis, sensitivity analysis, or scenario planning can help assess the potential risks and impacts of your supply chain
network. Alternative actions can then be presented.
Keep in mind how will the change impact your products or your customer?
Ensure that you take a business view in your network design and not just a supply chain view.
In one of your recent posts, you had mentioned, ‘Forecasts are always wrong!’. What are the driving principles of forecasting and how can companies address forecasting challenges?
Forecasts are predictions of what will happen in the future, based on past data and current trends. They can help companies plan their supply and demand and make better decisions. However, they are statistical ‘predictions’ and inaccuracy is inherent in the numbers. Therefore, companies need to use forecasts judiciously, and follow some principles, such as:
a. Choose the right timeframe: Forecasts can be made for different time periods, such as short-term, medium-term, or long-term.
Companies need to choose the right time frame for their forecasts, depending on their purpose and goal. Long-term forecasts can be used for financial planning and capacity planning. Short-term forecasts can be used for fulfilment execution planning and daily operations.
b. Use probabilistic forecasts:
Forecasts should not be a single consensus number which carry the flaw of deviations introduced during the IBP process. On the other hand, probability forecasts, which show the range of possible outcomes and their likelihood, can be more helpful to drive business plans while preparing for multiple scenarios or outcomes and built flexible response plans.
Supply chain is a cost-function and exists to serve the customers and the business. Do not manage supply chain KPIs, manage the demand fulfilment at an optimum cost and your KPIs will take care of themselves.
Manufacturing must sync with demand in the market. Local optimum cost reduction is not sustainable. High efficiency in a plant does not translate to higher revenues if it is not synced to market requirements. Scale manufacturing must give way to agility.
Planning is a critical function but managing planning horizons for execution is equally important.
People are the most critical resource you have – whether it is technicians who fix your machines, loaders who fill the vehicles, planners who churn data – all of them are important to keep the wheel turning effectively. Focus on building their capabilities, providing guidance and a purpose to their work.
Forecasts should not be a single consensus number which carry the flaw of deviations introduced during the IBP process. On the other hand,probability forecasts, which show the range of possible outcomes and their likelihood, can be more helpful to drive business plans while preparing for multiple scenarios or outcomes and built flexible response plans.
c. Decide on the level of detail: Forecasts can be made for different levels of detail, such as product, category, or SKU. SKU-level forecasts can be more accurate for shortterm forecasts, as they capture the variations and trends of each product. However, SKU-level forecasts will be significantly inaccurate in the longterm, as they are affected by more factors and uncertainties. Use higherlevel forecasts, such as category or product forecasts, for long-term forecasts, as they are more stable.
d. Update and adjust forecasts regularly but at an appropriate frequency at which your system can respond. It is not practical to forecast daily if your response time is a week. This will only introduce noise into the system. Information and assumptions can change over time, due to new data, events, or feedback. These can be used to develop latest estimates to adjust supply execution. It would be even better if a Demand Drive MRP or pull system can be developed to enable continuous replenishment.
What are the upcoming digital supply chain innovations and the poised role of AI in planning solutions?
Supply chains are undergoing rapid transformation with the use of machine learning and artificial intelligence, which can enable us to optimize our processes, reduce costs, and improve customer satisfaction. AI and ML based systems are the future of supply chains; however, I believe that the more pressing challenge is how to address the issues of data quality, skill development, and the transition from descriptive to
prescriptive analytics and planning. We need to make sure the data we feed into our new systems is accurate and reliable. This can be a major challenge for large or complex enterprises with multiple sources of data. Further, we need to train and empower our people to use the new technologies and methods. Weaning away from spreadsheets and presentation is required but perhaps not so easy.
What’s your take on sustainability in supply chain? How can companies manage Scope 3 emissions?
Companies have taken ambitious targets on the UN Sustainable Development Goals and Net Zero. However, achieving these is a complex and challenging task that requires data, connectivity, and collaboration among multiple players in the chain.
We must focus on completing scope 1 & 2 while progressing to scope 3. Scope 1 emissions are relatively easier to manage as they remain mostly in our control and various strategies are employed to achieve the targets. Scope 2 emissions or indirect emissions require generating companies, among others, to share data and collaborative work among partners. Scope 3 emissions are other indirect emissions that occur in the value chain of an organization, both upstream and downstream, such as emissions from raw material extraction, transportation, waste disposal, or use of finished products. These emissions are more difficult to manage, as they involve multiple suppliers, customers, and partners that may have different levels of maturity, transparency, and ambition in terms of sustainability. However, these emissions also represent a significant opportunity for improvement, as they often account for the majority of an
organization’s greenhouse gas emissions. There is a need for aggregators and climate platforms, which measure, report and reduce emissions for enterprises. We should see significant opportunity and execution in this space in the next few years.
What are the skillsets that new age supply chain professionals possess to tide over tough times or drive the next wave of supply chains globally? Supply chain will require significant investment in human resources over the coming years as they continuously evolve to respond to market changes. Some key factors for new professionals will be:
Strategic thinking: Understanding how different parts of the supply chain interact and affect each other and designing and implementing plans not just tactical but also strategic in nature.
Analytical and data management skills: Collecting, processing, and interpreting data from various sources and systems, and using it to make informed and effective decisions and actions.
Adaptability and outward focus: Ability to cope with change and uncertainty, and to adjust to new situations and demands. It also involves being open-minded and willing to learn from external sources and other companies and success stories.
In a climate-challenged world, procurement leaders must take on a central role in reimagining economic systems, supply chains, and how their companies do business. Pioneering CPOs are already stepping up to collaborate with their industries and suppliers, co-create company strategy with their C-suite colleagues, and embrace the required evolution in leadership approach and identity. But there is much more to do, and no time to waste. CPOs in every industry need to act now to lead the change. These thoughts came up in the recently released joint report by First Movers Coalition of the World Economic Forum and Egon Zehnder. Excerpts…
WITH companies’ supply chain generating 11.4 times more emissions than inhouse operations, addressing Scope 3 emissions can be a game changer. Companies can cascade their climate commitments throughout the supply chain and influence suppliers’ environmental performances by incorporating emission reductions into purchasing decisions.
The procurement function has often been seen as process-oriented and riskaverse, with a strong emphasis on cost reduction. The “reliability” of procurement has been defined by the ability to acquire the right products with the right price, quality, and time. The “accountability” of procurement practices is predicated on demonstrating the best value for money. However, the climate crisis is creating consistent variability in the supply chain, requiring the adoption of nascent and breakthrough technologies not yet at scale that introduces new risks to companies.
To leverage procurement as a critical lever, there needs to be a fundamental transformation in procurement processes, capabilities, strategies, and toolkits. At the heart of the transformation lies a group of important actors, whose ability to drive the net-zero agenda is often underacknowledged. Chief Procurement Officers (CPO) are facing a unique opportunity to lead in executing the transition. To do so, the CPO function and leadership capability needs to transform in its approach to risk and how they embrace new technologies, suppliers and business models at a speed and scale as never before.
Harping on the crucial role of CPOs, Nancy Gillis, Senior Advisor, Center for Nature and Climate, World Economic Forum, in her foreword, stressed, “The option for a company to “do well by doing good” is dead. Yes, you read that correctly.
Instead, companies need to “do well by not clinging to outmoded paradigms”— and change corporate behaviors to align with the business realities of our climatechallenged world. Chief procurement officers (CPOs) are increasingly at the heart of that change effort, as this timely report makes clear.”
She emphasized, “It used to be assumed that adopting sustainable business behaviors would cause a drag on earnings or add to costs, so many companies preferred to continue doing business as usual. But that option of business as usual is no longer available; in fact, it is now financially irresponsible to fail to respond to our changed climate. Scope 3 reporting requirements, core material unavailability, energy cost fluctuations, logistical breakdowns due to drought, storms, or fires—all of these are climate-related impacts that procurement leaders must address to keep their companies viable. More than ever, they must think in systems— inclusive not only of their supply chain
and all the suppliers and geographies it encompasses, but also their larger value chain.”
Procurement connects suppliers, manufacturers, purchasers, and endusers— even beyond direct supply chains, a shift in procurement principles can ripple through entire value chains. To make full use of this power, businesses must adopt system-conscious attitudes, and use their influence beyond internal boundaries. This requires not only a rethink of procurement strategy— but a system-wide promotion of decarbonization, with an emphasis on procurement as a critical lever for change.
While it may be tempting to view climate change as a challenge for the distant future, companies face an inevitable reckoning with the business case for net zero. Rather than waiting for consumer power to aggregate and transform business, CPOs must recognize this inevitability and act now to avert the worst effects of climate change.
Some companies, adopting exemplary transition practices, are operationalizing this logic. When one organization embeds sustainable practices to ensure its own long-term viability, it paves the way for others to do so too. This signals a new way of thinking: along with Cost, Quality, and Quantity (CQQ), sustainability must assume an equally central position in procurement’s priorities, as a key
driver of decisions. CPOs stand at the intersection of commercial obligations and environmental stewardship. So, what exactly can organizations and CPOs do together to put procurement to work for the good of the planet?
The power to make strategic decisions in response to climate change exists at the top of organizations. For net zero ambitions to have realistic chances of success, there must be strategic alignment on change across boards, CEOs, and the entire C-suite. In particular, without the strategic insight of CPOs at the highest levels of decision making, it may be impossible to give Scope 3 emissions the focus they demand. In this regard, it seems organizations are still lagging: only 30% of the CPOs surveyed felt that their input (as CPOs) was highly valued in their companies’ strategic decisionmaking processes.
This suggests there is an important opportunity for CPOs to initiate a conversation on how their unique business perspective can be leveraged to deliver on climate objectives. In turn, other C-suite leaders can consider how to accommodate a broader remit for procurement in company strategy. If CPOs are to step into a broader role in coordinating the companies’ climate objectives throughout supply chains, they will need to expand their skill sets.
Even more than this, however, CPOs will need to make the case for joint ventures and partnerships in procurement— challenging traditional ways of engaging with suppliers and even competitors.
Procurement is a constantly evolving field: over time, it has become less of a functional and more of a strategic role. During the disruptions of the Covid-19 pandemic and recent geopolitical instability, resilience has been elevated to the top of the list of requirements for procurement. Leading on sustainable strategy is the natural next phase in its evolution. To Oliver Hurrey, founding member and Chair of the Scope 3 Peer Group, the question of sustainability-asbusiness couldn’t be clearer: “If you make products using finite resources, then by its nature it is an ultimately doomed business model."
The implication for CPOs is that they now need to make sustainability a top decision driver for their companies’ longterm commercial viability—alongside the traditional metrics of CQQ that have been the mantra of procurement functions the world over.
Many CPOs—73% of them— identified “balancing cost, quality, and quantity with sustainability goals” as one of the top two challenges they faced in advancing the sustainability agenda, ahead of “limited technological capabilities” and “lack of consistent support from C-suite colleagues”.
Addressing the climate challenge has never been more urgent. Climate commitments continue to grow among the global Fortune 500 companies, with nearly 40% setting a net-zero target in 2022. However, only two-thirds include Scope 3 or value chain emissions within their climate commitments. As the company’s primary interface with the value chain, the procurement function is uniquely positioned to lead the company’s decarbonization efforts.
It’s no wonder that adding sustainability to the CQQ equation is a challenge, as traditional business models and reporting metrics prompt companies to hesitate in the face of transition costs. This puts CPOs in a crucial position: no-one is better qualified to communicate the fact that failing to transition presents a far greater threat to business than transitioning. A report by the Carbon Disclosure Project forecasts that suppliers will report more than $1 trillion in financial impact from environmental risks such as climate change, deforestation, and water insecurity in the coming years.
Some CPOs are leading their industries’ realization that delivering
on climate objectives is itself a value proposition—lowering emissions throughout their supply chains in the interests of long-term viability and value creation.
So, if the science on climate change is clear, along with the contribution of Scope 3 emissions and the inevitable impact of climate change on business, what is holding companies back from conquering the problem? There is a real danger in underestimating the scale of the effort required to deliver on climate objectives: it is an informational and economic mountain.
Procurement can and must play a crucial enabling role—sharing information among supply partners in a value chain and supporting them in their transitions. One key aspect of the new economics of climate transformations is the requirement that businesses take a fresh look at competition and collaboration. Such collaborations can help overcome the disincentives against taking the first step in technological development. Companies that break ground on new, green technologies typically assume costs and risks that their competitors do not—while providing solutions that their competitors may benefit from. This points to the need for joint ventures, where competitors take on costs together.
CPOs occupy a unique position, facing both internally and externally. Their role has already seen a greater reliance on internal collaboration. Now, CPOs need to do more to break down silos where previously corporate structures may have been characterized by territoriality within fixed boundaries, CPOs must now
help drive a system-wide reorientation. Naturally, in the push for sustainable sourcing, procurement leaders must also work closely with their counterparts in sustainability, and, because of its broad mandate, procurement is well-placed to do this. Furthermore, CPOs will have to increase their collaboration with R&D departments. The two functions need to pool knowledge on what is possible both in terms of sustainable materials and how they can be integrated into product designs.
Talent is a critical enabler of change—CPOs must attract and retain the right talent on their mission, specifically focusing on emerging skills needed in this developing role. The “right talent” is a multifaceted category. For instance, it should include questions around inclusion—addressing the lack of diversity in traditional procurement
workforces may be an important enabler of the identity shift the function needs. More obviously, however, people in procurement must become versed in a dynamic, shifting set of skills to balance the complex requirements of the role.
CPOs need to make the most of innovative technologies to drive sustainability in their companies. Generative AI, for instance, provides not only the opportunity to improve efficiency and reduce human error, but also the chance to overcome ambiguity and uncertainty through the transition. Indeed, risk management is a major area in which digitalization and AI can help. These systems offer hope that it will become easier to identify where issues might emerge, at earlier stages.
Considering the scale of Scope 3 emissions, companies must find ways to leverage procurement in meeting their climate objectives. CPOs and their teams have access to vast repositories of market and industry data, as well as the attention of in-company decision makers and external suppliers. They need to use this access to promote behavioral change both massive in scale and revolutionary in character.
This is especially true when considering the depths of supply chains: new data modeling techniques are needed to give procurement visibility beyond tier one, into tier two suppliers—visibility that’s vital to achieve full de-risking of supply chains. Adopting AI, with all its potential, will require a significant mindset shift from the professionals using it.
The adoption of AI will also facilitate greater diversity in the CPO role, as well as in procurement functions more broadly. Previously, good forecasting relied on intimate experience in procurement, so CPOs were typically hired based on their track records in procurement. Now, however, there is significant potential for this criterion to be made redundant by machines.
In short, the ascent of AI signals a broad capabilities shift. The aspects of the procurement role that are based on calculation and computer-like qualities are the ones destined to be made redundant by developments in technology. What remains for CPOs is to hone their human qualities and relationships.
While progress has been made in harnessing the power of procurement for sustainability, much work remains to be done. Further progress will depend on CPOs themselves. Can they adopt and nurture the leadership qualities needed to elevate sustainability in procurement to the highest levels of decision-making?
Based on our own work with CPOs and other experts on procurement, four qualities (as mentioned in figure 1) stand out as essential markers of the CPOs who will be successful leaders in systems.
Delivering on commitments is a massive challenge, and CPOs will need to embrace significant development to succeed against the new and urgent demands of their role. With their mandate growing in complexity, CPOs need a keen focus on the relationships between stakeholders in their sphere of influence. They must account for what is known and what is unknown in an iterative fashion, continuously updating their mental
models. This requires high degrees of processing power and speed, and drives two important development areas for leading within systems:
Curiosity: The CPOs who have the most success in acquiring and applying new frameworks will be those who find joy in expanding their worldviews. CPOs should cultivate curiosity by seeking knowledge about their systems from diverse sources, including news, reports, and human interactions both inside and outside the company. CPOs must deploy their senses within human systems, being alert to signs of how the system is evolving. This will yield knowledge of the status quo and lays the foundation for strategic foresight. Curiosity includes the will to find flaws in one’s current worldview—CPOs must actively seek counterintuitive information, as well as data that complicates their frameworks.
Clarity: In a world of infinite data, however, CPOs cannot afford to be universal absorption engines. They must have a strong sense for relevance, discerning the signal from the noise of the system; they must prioritize stakeholders, interactions, and levers for change. Information must be both acquired and communicated with clarity. CPOs are leaders on the frontier of the climate transition; they must lead with clarity, delegate unambiguously, and leave no room for mixed messaging.
Coping with the complexities and risks of net-zero transitions demands a move from transactional supply relations to resilient, long-term partnerships and joint value creation. CPOs will need to accommodate the interests of other stakeholders proactively, while providing for their own companies’ interests.
The fundamental quality CPOs will need to effect this change is empathy: an ability to understand the needs, capabilities, and challenges of stakeholders outside their own companies. The empathy required is for other stakeholder groups— competitors, partners, regulators—and
for the individuals that CPOs engage with. Empathy will be at the heart of the trust-based relationships needed for resilient business; it enables tough commercial conversations. Within these relationships, CPOs will need to deploy influencing and communication skills to deliver innovation and recruit partners on the mission of change.
In embedding resilience through a complex transition, CPOs need to be proactive and agile—applying learnings on the fly and within the context of an uncharted and uncertain future.
To get the ball rolling and induce a change in the system, CPOs will need to adopt a “bias to action”, privileging forward momentum over caution and absorbing the increased risks with the greatest degree of control possible. Inevitably, there will be setbacks—and, here, personal resilience will be demanded of CPOs, who must accept that progress is not linear. And that, sometimes, a step back is needed to move forward.
CPOs will need to cultivate a mindset of initiating multiple nudges in the system, to move it in the right direction. Rather than being reactive, they must sense what happens in the system and respond to it, updating their agenda proactively. This will require CPOs to embrace a set of overarching values or principles which will inform their decisions, steering away from singleissue reactivity. Personally, they must develop emotional control and the ability to thrive in uncertainty.
CPOs’ new mandate requires that they redefine professional success in procurement, and they face the related personal challenge of shifting their professional identity. A deep, personal transformation is indicated, involving the courage to introspect, pinpoint old beliefs, and unlearn old habits. This will not be easy; it will demand that CPOs change how they view themselves and how they behave within their role, touching on every aspect of the CPO’s identity. But this is the change procurement needs— to advance it into a position of strategic prominence, weaving climate objectives into business practice at every level of organizations.
Direct-to-Consumer (D2C) brands are distinguished by their agile DNA, creative marketing strategies, streamlined operations, and strategic application of technology. The combination of changing consumer behaviors and advancements in technology is making the shift towards D2C channels increasingly attractive for retailers. According to research from Kalaari Capital, successful D2C brands forge a strong emotional bond with their customers, embody values that resonate with their audience, and offer narratives that extend beyond the products they sell. In our Cover Story, we delve into the principles underlying successful D2C brands and reveal the ultimate blueprint for not just surviving but flourishing in the competitive and vibrant retail market.
D2C in India has the biggest growth potential with a total addressable market opportunity worth $300 bn by 2030, amongst all ecommerce segments. The sector’s accelerated growth during the pandemic has brought add-to-carts & checkouts closer to the shore with new age D2C brands redefining brand building, customer experience & growth. D2C brand specialists unequivocally emphasized on these pillars of success for a potential D2C brand…
Customer-Centricity: D2C brands must put the customer at the centre of their business model and focus on delivering a seamless and personalized customer experience. This involves understanding customer needs, preferences, and behaviours and using this information to create targeted and relevant marketing campaigns.
Brand Identity: D2C brands must establish a strong brand identity that differentiates them from competitors and resonates with their target audience. This involves developing a unique brand
voice, visual identity, and messaging that reflects the brand's values and mission.
Supply Chain Management: D2C brands must manage their supply chain efficiently to ensure that products are delivered on time and in good condition. This involves optimizing inventory management, fulfilment, and logistics processes, as well as selecting the right partners and suppliers.
Data-Driven Decision Making: D2C brands must leverage data to inform their decision-making processes, from product development to marketing and customer support. This involves collecting and analysing customer data to gain insights into their behaviour, preferences, and needs.
Innovation: D2C brands must be innovative in their approach to product development, marketing, and supply chain management. This involves staying abreast of the latest industry trends, exploring new technologies and channels, and continuously iterating and improving products and services.
A recent report, ‘Beyond E-Commerce 3.0, by Kalaari Capital mentioned that the success of D2C e-commerce relies on the cultivation of an entire digital ecosystem to support their growth. This includes technological infrastructure that can aid in acquisition of customers, payment infrastructure as well as fulfilment of orders. Earlier, merchants were dependent on a single provider to help them build the entire e-commerce experience. As customers have grown savvier, there is pressure on merchants to provide a more personalized experience at each step of the transaction flow. In parallel, the technical architecture behind these platforms has evolved allowing merchants to choose best inclass providers for individual legs of the journey: digital storefronts, marketing tools, payments/one-click checkout technologies, and snipping.
With this as the precursor, we reached out to the leading D2C players to help us craft an ultimate success playbook for the upcoming D2C companies in the country. Here’s how the intriguing discussion unfolded…
Whether they sell directly to customers through an offline store, or app or set up an eCommerce store through web channels, brands can establish a direct connection with their customers to increase brand perception and loyalty in new, untapped markets.
Shivam Pandey, Head – Inventory & Supply Chain, Good Glamm Group:
The Direct-to-Consumer (D2C) business model involves selling products directly to consumers without intermediaries, such as retailers or wholesalers. The value chain of a D2C business typically includes several key components:
Product Design and Development: This stage involves creating and designing products that resonate with the target audience. D2C brands often focus on unique and high-quality products to differentiate themselves in the market.
Manufacturing and Sourcing: Once
the product design is finalized, the manufacturing and sourcing of raw materials take place. Some D2C brands choose to manufacture their products in-house, while others may rely on thirdparty manufacturers.
E-commerce Platform: D2C businesses heavily rely on online sales channels. They need a user-friendly and efficient e-commerce platform to showcase and sell their products directly to consumers. This may involve building a website or utilizing established online marketplaces.
Marketing and Branding: D2C brands invest significantly in marketing and
branding to build awareness and attract customers. Social media, influencer marketing, content marketing, and digital advertising are common strategies used to reach and engage the target audience.
Logistics and Fulfillment: Efficient logistics and fulfilment processes are crucial for D2C brands. This includes order processing, inventory management, and timely delivery to ensure a positive customer experience.
Customer Relationship Management (CRM): Building and maintaining strong relationships with customers is
essential for D2C success. CRM tools help in managing customer interactions, addressing concerns, and collecting valuable feedback.
Customer Support: Providing excellent customer support is a key component of the D2C value chain. Quick and responsive customer service helps in retaining customers and building brand loyalty.
Data Analytics: D2C brands often leverage data analytics to gain insights into customer behaviour, preferences, and market trends. This data-driven approach enables them to make informed decisions for product development, marketing, and overall business strategy.
Pritesh Asher, Co-founder & CEO, Juicy Chemistry: The value chain of the D2C business model consists of several key stages, each of which adds value to the product or service before it reaches the end-consumer:
• Research and Development: This stage involves identifying customer needs and developing products that meet those needs. D2C brands can gather customer insights through various channels, such as social media, online surveys, and customer feedback forums.
• Sourcing and Manufacturing: D2C brands must source high-quality materials and manufacture their products to the highest standards. This stage involves selecting suppliers, negotiating pricing and contracts, and managing production schedules.
• Inventory Management: D2C brands must manage inventory levels to ensure that they can fulfill orders quickly and efficiently. This involves forecasting demand, optimizing inventory levels, and managing lead times to minimize stockouts and overstocks.
• Fulfillment and Logistics: D2C brands must have a reliable and efficient fulfilment and logistics strategy in place to ensure that products are delivered to customers on time and in good condition.
• Marketing and Sales: D2C brands must develop effective marketing and sales strategies to reach their target audience and convert them into paying customers. This involves creating engaging content, optimizing pricing and promotions, and measuring the effectiveness of marketing campaigns.
• Customer Service: D2C brands must provide excellent customer service to build customer loyalty and trust. This involves providing timely and responsive support, addressing customer complaints, and soliciting feedback to improve the customer experience.
In recent years, India’s D2C market has experienced significant growth. This growth can be attributed to an increase in e-commerce and internet penetration, faster last-mile logistics, and a jump in consumer tech awareness, i.e., the increasing consumer base of millennials and Gen Z.
Shivam Pandey: Some of the drivers facilitating unparalleled growth of D2C brands in the country are:
Brand Control: D2C allows brands to have more control over their image, pricing, and customer interactions, leading to stronger brand identity and customer loyalty.
Data-driven Marketing: The ability to gather and analyse customer data enables D2C brands to create targeted marketing campaigns, enhancing customer acquisition and retention efforts.
Supply Chain Efficiency: D2C brands often have more control over their supply chain, leading to increased efficiency, reduced costs, and quicker response to market demands.
Agility and Innovation: D2C brands can adapt quickly to changing market trends and consumer demands, fostering innovation and staying ahead of the competition.
Social media and Influencer Marketing: Leveraging social media platforms and influencer partnerships allows D2C brands to reach a wider audience and build credibility.
Direct Feedback Loop: Direct communication with customers provides valuable feedback, enabling D2C brands to iterate and improve their products and services based on real-time input.
Subscription Models: Subscription-based services offer a recurring revenue stream, increasing customer lifetime value and providing a more predictable revenue
model for D2C businesses.
Overall, the D2C business model's success is driven by a combination of technological advancements, changing consumer behaviour, and the ability of brands to leverage data and adapt to market dynamics.
Tarun Gupta, Co-Founder, BOULT: The D2C sector in India has been flourishing over the last few years and gone are the days when it was driven by only big players who had monopoly in the market. In my opinion, the following factors have been driving the growth:
s Increased internet and smartphone usage
s Consumer demand for personalized and value-driven products
s Effective utilization of social media and influencer marketing
s Strategic implementation of data analytics for optimization
s Investments in logistics infrastructure to support operations
s Government policies that encourage e-commerce and digital innovation
s Rise of indigenous brands and offering a affordable options to the consumers.
These factors collectively empower D2C brands in India to reshape the consumer market and substantially expand their market share.
Pritesh Asher: There have been several growth drivers of D2C in the country. I would like to mention these:
Changing Consumer Preferences:
Changing consumer preferences towards personalized and high-quality products have led to a growing demand for D2C brands that offer unique and differentiated products.
Growing Investment in D2C: The growing investment in D2C brands by venture capital firms, private equity firms, and other investors has led to increased funding for research and development, marketing, and supply chain management.
Government Initiatives: The government
has launched several initiatives to support the growth of D2C brands, such as the Startup India program and the National Policy on Electronics.
Overall, the D2C business model offers several advantages, such as greater control over the supply chain, improved customer relationships, and increased brand loyalty. By focusing on the value chain and leveraging the growth drivers, D2C brands can thrive in the competitive e-commerce landscape.
Darshan Chhajed, Manager – D2C & Global Ecommerce, Symphony Ltd.: The D2C business model involves selling products or services directly to consumers, bypassing traditional retail channels. Growth drivers of D2C in a country include the increasing popularity of online shopping, changing consumer preferences for unique and high-quality products, advancements in digital marketing tools and platforms, the ability to build direct customer relationships leading to higher loyalty, streamlining of the supply chain to reduce costs and improve delivery times, and the control D2C brands have over their brand image and messaging, allowing them to differentiate themselves from competitors.
Overall, the D2C business model offers advantages such as greater
control over the customer experience, higher profit margins, and the ability to innovate rapidly in response to market trends. The D2C business model provides several advantages, including greater control over the customer experience, higher profit margins, and the ability to innovate rapidly in response to market trends. With D2C, brands can directly shape every aspect of the customer journey, from initial interaction to postpurchase support, ensuring a seamless and personalized experience that fosters customer loyalty.
One of the most significant benefits of the D2C model is the potential for higher profit margins. By cutting out middlemen such as retailers, brands can retain more of the revenue from each sale. This financial advantage enables D2C brands to reinvest in product development, marketing, and customer acquisition, accelerating their growth.
Moreover, the D2C model allows brands to innovate quickly. Without the constraints of traditional retail channels, D2C brands can swiftly introduce new products, experiment with different features, and adapt their marketing strategies to align with evolving consumer preferences. This agility is crucial in today's fast-paced market, enabling brands to stay competitive and capitalize on emerging trends.
Building a direct-to-customer channel can generate substantial value—but only when planned carefully, managed well, and focused on the customer.
Tarun Gupta: To me, these are some of the success pillars in D2C ecommerce…
Product Obsession: At Boult, our passion for excellence drives us to meticulously craft every aspect of our headphones, ensuring our customers enjoy a premium experience that turns them into our advocates.
Direct-to-Consumer (D2C) Approach: We've eliminated intermediaries, creating our own supply chain, directly collaborating
with manufacturers, and delivering unmatched value to our customers. This direct engagement fosters trust and loyalty, setting us apart.
Building Community: We see our customers as part of the Boult tribe, not just as sales figures. By actively engaging and listening to their feedback, we involve them in our product development process, creating a sense of belonging and community.
Content and Context: We focus on
creating meaningful content that tells a story and resonates with the user's emotions, ensuring that the relevance of context makes our content engaging and memorable.
Innovation and Agility: At Boult, taking risks and innovating is in our DNA. We're not afraid to disrupt the market and are always ready to adapt and pivot, which shields us from larger competitors and maintains our edge.
Data-Driven Intuition: While we rely
heavily on data for insights, we also trust our intuition to understand our customers' needs on a more profound level. This balance helps us connect more deeply and drives our success.
Brand Identity: We're more than a logo; Boult represents bold decisions, superior sound quality, and a commitment to excellence. We ensure every interaction reflects our brand promise.
These pillars have been instrumental in establishing Boult as a formidable presence in the D2C sector. For us, it's not just about e-commerce; it's about creating a movement and a brand that captures hearts.
Pritesh Asher: For Juicy Chemistry, a D2C organic skin and personal care brand, the pillars of success in D2C e-commerce include:
Quality and Authenticity: As an organic skin and personal care brand, Juicy Chemistry ensures that its products are of the highest quality and authenticity. This involves using natural and organic ingredients, following strict manufacturing processes, and obtaining relevant certifications.
Brand Identity: Juicy Chemistry establishes a strong brand identity that reflects its values of natural, organic,
and sustainable skincare. This involves developing a unique brand voice, visual identity, and messaging that resonates with its target audience.
Customer Engagement: Juicy Chemistry engages with its customers in a meaningful and authentic way to build trust and loyalty. This involves using social media platforms to share educational content, providing personalized customer support, and soliciting feedback to improve the customer experience.
Supply Chain Management: Juicy Chemistry manages its supply chain efficiently to ensure that its products are delivered on time and in good condition. This involves optimizing inventory management, fulfilment, and logistics processes, as well as selecting the right partners and suppliers.
Innovation: Juicy Chemistry’s innovative approach to product development, marketing, and supply chain management involves exploring new ingredients, formulations, and packaging options to stay ahead of the curve and meet changing consumer preferences.
Darshan Chhajed: Success in D2C e-commerce hinges on several key pillars. Firstly, product differentiation is paramount. D2C brands must offer
The flourishing Direct-to-Consumer (D2C) model in India is fostering direct connections between brands and consumers, effectively eliminating the need for traditional intermediaries. This model encompasses several key stages:
Tarun Gupta, Co-Founder, BOULT
• Product Development and Sourcing: Brands utilize data and feedback to craft products that align with the preferences and needs of consumers. They often prioritize sustainability and ethical sourcing to distinguish themselves in the market.
• Branding and Storytelling: D2C brands establish a strong brand identity and narrative, effectively conveyed through social media and influencer marketing. This approach enables them to emotionally resonate with consumers, considering the diverse cultural landscape of India.
• Online Storefront and Marketplace Presence: To reach a broad audience, D2C brands must maintain
unique, high-quality products that resonate with their target market, focusing on design, features, and quality to stand out in a crowded marketplace. Secondly, effective digital marketing is essential for reaching and engaging customers. This includes leveraging social media, influencer partnerships, and targeted advertising to drive traffic and conversions. Thirdly, prioritizing customer experience is critical. Providing a seamless and personalized journey, from browsing to post-purchase support, helps build loyalty. Fourthly, data-driven decision-making is key. Utilizing analytics to understand customer behavior and preferences allows for optimized product offerings and marketing strategies. Lastly, agility and innovation are vital. D2C brands need to adapt quickly to market trends and consumer preferences, constantly refining products, and marketing approaches.
Dr. Ashvini Jakhar, Founder & CEO, Prozo: For the D2C e-commerce model to succeed, it relies on several key factors or pillars. These include a compelling and multi-platform online presence, customer-centricity, efficient supply chains with key focus areas on inventory management, fast fulfilment & shipping, customization & personalization and sustainable scalability and data-driven marketing.
a compelling online presence on their own websites as well as major e-commerce marketplaces. An omnichannel strategy is essential in this regard.
• Logistics and Fulfillment: Ensuring efficient logistics and fulfillment processes is paramount. This includes integrating Cash on Delivery (COD) options, which contribute to customer satisfaction and foster repeat business.
• Customer Service and Engagement: D2C brands prioritize building robust customer relationships through responsive service and personalized interactions. They often employ loyalty programs and exclusive offers to enhance customer engagement.
• Data Analysis and Optimization: By analyzing customer data, D2C brands can refine their offerings, marketing strategies, and overall customer experience. This allows them to remain responsive to evolving market demands.
A robust supply chain is particularly crucial for a D2C brand, providing various advantages that significantly contribute to its growth. These benefits encompass seamless order fulfilment, effective inventory management across channels, and punctual deliveries. In
today's e-commerce era, the integration of technology is essential. It enables realtime tracking of shipments, provides visibility into inventory, and supports data-driven demand forecasting, optimizing both stock management and sales. Additionally, having a supply
chain partner that assists in building personalized customer experiences, shares insights about market trends, and facilitates cost-effective scaling ensures the brand's amplified success.
By focusing on these tenets, businesses can create a strong and sustainable D2C brand that resonates with customers and stands out in the competitive market.
Shivam Pandey: Building a strong D2C brand involves a combination of strategic planning, effective marketing, and a focus on customer experience. Some key tenets to consider are - Clear Brand Identity, Target Audience Understanding, Quality Products and Services, Seamless Customer Experience, Effective E-commerce Platform, Digital Marketing and Social Media Presence, Content Marketing, Customer Engagement and Feedback, Subscription Models and Loyalty Programs, Data-driven Decision Making, Transparency and Trust, Sustainability and Social Responsibility.
Tarun Gupta: At Boult, we're not just building earphones or smartwatches; we're crafting a legacy of sound and spirit that resonates with every note. For us, the tenets of building a strong D2C brand are:
Targeted Expertise: Boult concentrates on the niche of high-quality yet affordable audio products, catering specifically to tech-savvy millennials, showcasing the importance of focusing on a specialized market segment.
Enhanced Customer Experience: Every customer interaction is meticulously designed for satisfaction, highlighting Boult's commitment to creating a superior, seamless customer journey from browsing to delivery.
Compelling Brand Narrative: The company's ethos of innovation and
boldness is communicated across all platforms, emphasizing the significance of a strong, relatable brand story that connects with the community.
Data-Driven Strategy: Boult relies on in-depth data analysis to inform decision-making and drive product development, illustrating the role of data in understanding and responding to consumer needs.
Innovation and Community Engagement: The pursuit of constant innovation and active community participation are central to Boult's philosophy, with a focus on embracing new ideas and valuing customer feedback as a source of inspiration and growth.
Pritesh Asher: To amplify these pillars of success, Juicy Chemistry has several unique aspects, such as:
Transparency: Juicy Chemistry is transparent about its ingredients, manufacturing processes, and certifications. This builds trust and credibility with customers who value natural and organic skincare.
Sustainability: Juicy Chemistry is committed to sustainability and uses eco-friendly packaging, reduces waste, and promotes recycling. This appeals to customers who are increasingly concerned about the environmental impact of their purchases.
Personalization: Juicy Chemistry offers personalized skincare solutions based on customers' skin type, concerns, and preferences. This involves using a detailed questionnaire to understand customers' needs and providing customized recommendations.
Community Building: Juicy Chemistry has built a strong community of fans and advocates who share their experiences, feedback, and testimonials. This creates a sense of belonging and loyalty among customers and helps to amplify the brand's message.
Education: Juicy Chemistry provides educational content on its website and social media platforms to help customers understand the benefits of natural and organic skincare. This builds trust and credibility with customers who value education and expertise.
By combining these unique aspects with a focus on quality, authenticity, brand identity, customer engagement, supply chain management, and innovation, Juicy Chemistry has amplified its success as a D2C organic skin and personal care brand.
By adopting omnichannel strategies, D2C brands can create a more personalized, immersive, and seamless customer experience, enabling them to differentiate themselves from their competitors and drive business growth.
Shivam Pandey: A D2C brand can benefit significantly from adopting an omnichannel strategy, which involves integrating and synchronizing various channels to provide a seamless and cohesive customer experience. Here are some key benefits for a D2C brand:
Consistency: Omnichannel strategies ensure a consistent brand experience across different channels, such as online platforms, physical stores, mobile apps, and social media. This consistency helps build trust and loyalty among customers.
Convenience: Customers can choose the channel that suits them best for researching, purchasing, or seeking support. This flexibility enhances the overall convenience of the shopping experience.
Expanded Reach: By being present on various channels, a D2C brand can reach a broader audience and attract customers who prefer specific platforms or methods of shopping.
Cross-Selling and Up-Selling: Omnichannel strategies enable cross-selling and upselling opportunities by recommending complementary products or upgrades through different channels.
Holistic Customer Data: Omnichannel strategies allow for the integration of customer data from multiple touchpoints. This holistic view enables better understanding of customer behavior, preferences, and purchasing patterns.
Personalization: Access to comprehensive customer data enables the brand to personalize marketing messages, promotions, and product recommendations, thereby improving the relevance of interactions with customers.
Real-Time Inventory Visibility: With an omnichannel approach, a D2C brand can manage its inventory more effectively by having real-time visibility across various channels. This helps in preventing stockouts, minimizing overstock situations, and optimizing the supply chain.
Unified Brand Image: Omnichannel strategies ensure that the brand maintains a unified and coherent image across different channels. This consistency helps in building and reinforcing the brand identity.
Brand Recognition: The more channels a brand is present on, the higher the chances of customers recognizing and remembering the brand, leading to increased brand awareness.
Multi-Channel Engagement: Different customers have different preferences for communication and shopping. Omnichannel strategies allow a D2C brand to engage with customers through their preferred channels, whether it's online, in-store, via mobile apps, or social media.
Differentiation: Adopting an omnichannel
approach can set a D2C brand apart from competitors who may not have as seamless a customer experience. This differentiation can be a competitive advantage in the market.
In summary, an omnichannel strategy for a D2C brand provides a holistic approach to customer engagement, contributes to increased sales and revenue, improves operational efficiency, and enhances the overall brand experience.
Tarun Gupta: I believe if you’re a D2C brand and wish to reach a larger audience set Omnichannel approach is a must. The primary advantage of such an approach is that it not only helps to diversify but also integrate and create a stronger ecosystem for the consumers to engage with.
The omnichannel approach ensures a seamless and uniform customer experience, offering features like a consolidated shopping cart, in-store pickups, and personalized suggestions. This convenience and tailored experience contribute to increased customer happiness and loyalty and 360-degree approach to enhance revenue for D2C marketers.
This multi-channel approach also becomes a competitive advantage for D2C brands in the increasingly competitive Indian e-commerce sector. Further it enhances the data insights into consumer behavior and preferences across channels. D2C brands can leverage this data to better understand their target market, adjusting product development and marketing strategies accordingly.
To thrive in the evolving e-commerce landscape in India, D2C brands must unlock the omnichannel code. By offering a standardized and practical purchasing experience across channels, these brands can expand their reach, enhance
consumer satisfaction, and drive sales.
Pritesh Asher: A D2C brand can benefit significantly from an omnichannel strategy, which involves delivering a seamless and consistent customer experience across all touchpoints, channels, and devices. Some of the key benefits of an omnichannel strategy for D2C brands include:
Increased Customer Engagement: An omnichannel strategy enables D2C brands to engage with customers across multiple touchpoints, channels, and devices, increasing their brand awareness, loyalty, and engagement. This involves using data and analytics to track customer behavior, preferences, and interactions, and delivering personalized
and relevant content, messaging, and offers.
Improved Customer Experience: An omnichannel strategy enables D2C brands to deliver a consistent and seamless customer experience across all touchpoints, channels, and devices. This involves using data and analytics to create a single view of the customer, and ensuring that the customer journey is smooth, intuitive, and personalized.
Enhanced Data Insights: An omnichannel strategy enables D2C brands to collect and analyze data from multiple sources, providing rich insights into customer behavior, preferences, and pain points. This involves using data and analytics to track customer interactions, preferences, and feedback, and using this information
Direct-to-Consumer (D2C) e-commerce success relies on several key pillars, and businesses that excel in these areas are more likely to thrive in the competitive online marketplace. Here are some of the crucial pillars of success in D2C e-commerce:
Customer Experience: Providing an exceptional customer experience is paramount. This includes userfriendly websites, easy navigation, transparent pricing, responsive customer service, and a seamless purchasing process.
Product Quality and Differentiation: Offering highquality products that stand out in the market is essential. D2C brands often focus on unique value propositions and product differentiation to attract and retain customers.
Shivam Pandey, Head – Inventory & Supply Chain, Good Glamm Group
Digital Marketing and Branding: Building a strong online presence through effective digital marketing strategies, including social media, content marketing, and search engine optimization (SEO), is crucial. Branding that resonates with the target audience helps create a lasting impression.
Data-Driven Decision Making: Leveraging data analytics for insights into customer behaviour, preferences, and market trends allows for informed decision-making. This can lead to personalized marketing strategies and improved product offerings.
Supply Chain Efficiency: Ensuring a streamlined and efficient supply chain is vital for timely deliveries, reducing costs, and maintaining high-quality standards. This includes inventory management, order fulfilment, and logistics optimization.
to optimize the customer journey, product offerings, and marketing strategies.
Increased Sales and Revenue: An omnichannel strategy enables D2C brands to increase their sales and revenue by reaching new customers, retaining existing ones, and crossselling and upselling products and services. This involves using data and analytics to identify customer segments, preferences, and pain points, and using this information to create targeted and relevant marketing campaigns.
Improved Operational Efficiency: An omnichannel strategy enables D2C brands to streamline their operations, reduce costs, and improve their efficiency. This involves using data and analytics to optimize inventory
E-commerce Technology: Utilizing the latest e-commerce technologies, such as mobile optimization, responsive design, and secure payment gateways, is crucial for providing a smooth online shopping experience.
Customer Engagement and Loyalty: Building relationships with customers through engagement initiatives, loyalty programs, and personalized communication helps in fostering brand loyalty and repeat business.
Transparency and Trust: Being transparent about products, pricing, and business practices builds trust with customers. This includes clear communication about shipping costs, return policies, and any other relevant information.
Agile and Adaptive Approach: The digital landscape is ever-changing. Successful D2C brands are agile and can adapt to market trends, consumer preferences, and technological advancements quickly.
Sustainability and Social Responsibility: Many consumers prioritize sustainability and social responsibility. D2C brands that integrate environmentally friendly practices and social responsibility into their business models can appeal to a growing segment of conscious consumers.
In amplifying these pillars, technological advancements such as artificial intelligence (AI) and machine learning can be employed for personalized marketing, chatbots for customer service, and data analytics for more precise decision-making. Additionally, incorporating innovative strategies like limited-time promotions, exclusive online events, and partnerships can help enhance the uniqueness of a D2C brand, attracting and retaining a loyal customer base.
management, logistics, and fulfillment, and using automation and AI to improve the accuracy, speed, and quality of their operations.
An omnichannel strategy can help D2C brands to create a seamless and consistent customer experience, collect and analyze rich data insights, increase sales and revenue, and improve their operational efficiency. By using data and analytics to understand customer behaviour, preferences, and pain points, D2C brands can create personalized and relevant content, messaging, and offers, and optimize the customer journey, product offerings, and marketing
strategies.
Darshan Chhajed: An omnichannel strategy can benefit a Direct-to-Consumer (D2C) brand in several ways. Firstly, it allows the brand to reach customers through multiple channels, both online and offline, increasing its visibility and accessibility. This can lead to a broader customer base and higher sales potential. Secondly, an omnichannel approach provides a seamless shopping experience for customers, allowing them to interact with the brand across different channels without friction. This can improve customer satisfaction and loyalty, as well
as encourage repeat purchases.
Thirdly, an omnichannel strategy enables the brand to gather more comprehensive data about customer behaviour and preferences. By integrating data from various channels, the brand can gain deeper insights into its customers, allowing for more targeted marketing campaigns and product offerings. Overall, an omnichannel strategy can help a D2C brand enhance its brand presence, improve customer experience, and drive business growth.
Technology investments are crucial, and D2C brands are embracing innovation to improve their customer experiences. It can be stated that supply chain efficiency has developed by 15% as a result of 65% of brands adapting artificial intelligence as well as advanced analytics.
Shivam Pandey: Several technologies were instrumental in making a brand omnichannel. However, keep in mind that the technology landscape evolves rapidly, and there may be new developments or advancements since then. Here are some technologies that were relevant:
Customer Relationship Management (CRM) Systems: Advanced CRM systems help companies centralize customer data and interactions across various channels, enabling a seamless experience.
Unified Commerce Platforms: These platforms integrate online and offline sales channels, providing a unified view of inventory, orders, and customer data. They allow customers to switch between channels effortlessly.
Internet of Things (IoT): IoT devices enhance the omnichannel experience by connecting physical and digital environments. For example, smart devices can provide real-time data on product usage, and wearable technology
can facilitate personalized interactions.
Artificial Intelligence (AI) and Machine Learning (ML): AI and ML algorithms help analyse vast amounts of data to understand customer behaviour, preferences, and trends. This information is crucial for delivering personalized and targeted experiences across channels.
Chatbots and Virtual Assistants: AIpowered chatbots and virtual assistants enable real-time interactions with customers, providing assistance and information across multiple channels such as websites, social media, and messaging apps.
Augmented Reality (AR) and Virtual Reality (VR): AR and VR technologies can be used to create immersive experiences for customers. For example, virtual tryon for fashion items or AR applications that enhance in-store experiences.
Mobile Technologies: Mobile apps play a significant role in the omnichannel
strategy. They enable customers to engage with a brand seamlessly, whether they are shopping online, in-store, or through other channels.
Data Analytics and Business Intelligence: Robust analytics tools help businesses gain insights into customer behaviour, allowing for data-driven decisions to enhance the omnichannel experience continually.
Voice Commerce: Voice-activated technology and smart speakers enable customers to make purchases and interact with brands using voice commands, contributing to a more integrated experience.
Blockchain: Blockchain technology can enhance transparency and trust in transactions, especially in areas like supply chain management, ensuring a consistent and reliable experience for customers.
Progressive Web Apps (PWAs): PWAs
combine the best features of web and mobile applications, providing a seamless experience across devices and channels.
Keep in mind that the effectiveness of these technologies depends on the specific industry, target audience, and the overall business strategy. It's essential to stay updated on the latest technological advancements to ensure your omnichannel approach remains relevant and competitive.
Tarun Gupta: Omnichannel logistics, a concept of seamlessly integrating various channels in the supply chain for an enhanced customer experience, has been in existence since the mid-2010s. While initially emphasizing the breadth of channel choice, it has evolved to prioritize the quality of resources, infrastructures, and processes to differentiate retailers and deliver optimal value to customers.
Technology-Driven Efficiency in Warehousing: Technology has revolutionized warehousing, ushering in an era of streamlined logistics, optimized inventory management, and heightened customer satisfaction. Automation and robotics have become integral, enhancing operational efficiency and minimizing errors. Automated systems such as conveyor systems and robotic pickers ensure accuracy levels surpassing human capabilities, resulting in expedited order fulfillment and meticulous inventory oversight.
Advanced inventory management systems, leveraging technologies like barcode scanning and RFID, offer realtime insights into inventory across diverse locations. This real-time visibility enables businesses to monitor stock quantities, track movements, and manage distribution across multiple channels, ultimately optimizing inventory levels and reducing costs.
Order tracking and fulfilment technologies are crucial in providing realtime updates on order progress, ensuring transparency, and reducing customer inquiries. The convergence of order management systems and cloud-based platforms orchestrates a harmonious and efficient order processing and fulfilment journey, resonating throughout the omnichannel landscape.
Transportation & Delivery Optimization: The optimization of transportation and delivery processes is a critical advancement in omnichannel logistics. Route planning and optimization technology ensures timely and costeffective deliveries by strategically planning routes considering factors like traffic conditions and designated delivery windows.
Real-time tracking and visibility solutions have become essential, providing customers with accurate location updates, estimated delivery times, and potential hiccups. Lastmile delivery innovations, including crowdshipping, autonomous vehicles, and drones, address the challenges of delivering to diverse destinations efficiently and swiftly.
Customer Experience & Engagement:
Personalization through data-driven insights is a catalyst for enhanced customer experiences. By analyzing customer data, businesses can curate tailored interactions across channels, fostering deeper engagement and loyalty. The seamless integration of online and offline interactions, facilitated by technologies like click-and-collect services and in-store technologies, ensures a unified customer experience.
Customer-centric order management systems streamline the entire order fulfillment process, centralizing orders from various channels and managing inventory allocation. Despite the challenges of implementing technology solutions, such as complexity, security concerns, and the need for workforce training, businesses are continually embracing these innovations to stay ahead in the competitive omnichannel landscape.
Technology: Future trends in omnichannel logistics technology include the integration of IoT devices for real-time visibility into inventory and supply chain transparency. Blockchain technology enhances supply chain transparency, traceability, and authenticity, addressing issues like clerical errors and improving overall workflow.
In a nutshell, technology plays a pivotal
role in enhancing omnichannel logistics, enabling businesses to meet customer expectations, optimize operations, and drive growth. From warehouse automation to demand forecasting, seamless customer experiences to data integration, technology-driven solutions reshape the logistics landscape. Navigating challenges and staying abreast of emerging trends will be crucial for businesses aiming to fully harness the potential of technology in omnichannel logistics.
Darshan Chhajed: Several emerging technologies are aiding brands in becoming omnichannel, providing seamless customer experiences across all channels. Artificial Intelligence (AI) plays a crucial role, particularly through Customer Data Platforms (CDPs), which centralize and analyze customer data from various touchpoints. This allows for a unified view of each customer, enabling brands to personalize interactions and tailor marketing messages based on individual preferences and behavior.
Augmented Reality (AR) and Virtual Reality (VR) technologies are also revolutionizing the omnichannel experience. AR, for instance, can be utilized for virtual try-on experiences, enhancing the online shopping experience for customers. VR, on the other hand, can create virtual showrooms or product demonstrations, offering customers immersive experiences with products. Overall, AI, AR, and VR technologies are transforming how brands engage with customers, making omnichannel strategies more effective and personalized. Integrating these technologies can help brands stay ahead in the competitive retail landscape by providing innovative and engaging experiences across all channels.
Dr. Ashvini Jakhar: A tech driven supply chain landscape has become synonymous with faster growth and sustainability for D2C businesses and the overall ecosystem. Various cutting-edge technologies are employed by companies in the logistics domain to drive optimization and accuracy. Cloud-based order management systems, automated inventory management, and real-time tracking of order status/shipments have
Building a strong D2C brand rests on several foundational tenets. Firstly, a clear brand identity is paramount, encompassing values, mission, and a unique voice that resonates with the target audience. Secondly, a compelling value proposition is essential, offering something distinct that meets specific customer needs and sets the brand apart from competitors.
Third, product excellence is key; delivering high-quality products consistently reinforces the brand’s promise and exceeds customer expectations. Customercentricity should be a core focus, prioritizing customer needs, preferences, and feedback to shape business decisions. Additionally, providing an engaging brand
enabled service providers to gain critical insights into operations. Furthermore, with ever-increasing order volumes, the introduction of automation in warehouses for the storage and retrieval of goods has become a key accelerator of safe and swift delivery processes. IoT sensors
experience across all touchpoints helps build strong relationships with customers. D2C brands must realize that transparency and authenticity in communications and actions build trust and credibility. Moreover, a data-driven approach ensures informed decisionmaking and optimized marketing strategies. Another important tenant for staying relevant and competitive is continual innovation and adaptability to market trends. Another most important aspect is community building fosters a sense of belonging and loyalty among customers. Finally, integrating sustainability and social responsibility into the brand’s values and practices not only resonates with socially conscious consumers but also enhances brand reputation. Embracing these tenets enables D2C brands to build a strong, resilient brand that connects deeply with customers and drives long-term success.
integrated with AI and ML algorithms are used to monitor and regulate operations at warehouses. This approach not only helps supply chain companies achieve greater efficiency and safety but also enables them to continuously gather data for further improvement. Data
analytics also empowers brands to stay ahead of trends and forecast demand for each product with greater accuracy, reducing the likelihood of overstocking or running out of stocks during peak demand seasons.
These D2C trends promise to reshape the Indian e-commerce landscape in the coming years, offering a more streamlined and engaging shopping experience. The key lies in staying ahead of the curve, embracing innovation, and leveraging technology to create a seamless journey for customers.
Shivam Pandey: E-commerce has been on the rise in India. This trend is likely to continue, with more traditional retailers adopting online channels and digital strategies. Direct-to-Consumer (D2C) brands have been gaining momentum across the globe, including in India. D2C allows brands to establish a direct relationship with consumers, cutting out intermediaries. This approach is particularly appealing to consumers looking for unique, niche, or personalized products. The future of retail is expected to be omnichannel, where customers seamlessly transition between online and offline channels. Retailers are likely to invest in creating a cohesive experience across various touchpoints,
providing convenience and flexibility to consumers. Consumers are becoming more conscious of their choices, and there is an increasing demand for sustainable and ethically produced products. D2C brands often have an advantage in communicating their values and practices directly to consumers, which can resonate well with this trend. While urban areas have seen significant growth in retail, there is potential for expansion in rural markets. Companies that can tailor their strategies to meet the unique needs of rural consumers may find opportunities for growth. Changes in the regulatory environment can impact the retail landscape. Policies related to e-commerce, taxation, and foreign direct
investment (FDI) may influence how businesses operate in the market.
The integration of technology, including artificial intelligence, machine learning, and data analytics, is likely to play a crucial role in shaping the retail landscape. Personalization, targeted marketing, and improved customer experiences are areas where technology can make a significant impact. The COVID-19 pandemic has accelerated digital adoption and e-commerce growth. The lessons learned during the pandemic, such as the importance of online presence and digital resilience, are likely to influence retail strategies in the post-pandemic era.
Darshan Chhajed, Manager – D2C & Global Ecommerce, Symphony Ltd.
Tarun Gupta: The Indian retail sector, valued at $836 billion in FY 2022, has undergone a notable transformation attributed to the emergence of direct-tocustomer (D2C) brands. Conventional retail holds the majority share at 81.5 percent, followed by organized brickand-mortar retail at 12%, and online sales channels at 6.5%. Presently, D2C accounts for approximately 1% of the total retail landscape in India. Remarkably, several D2C brands have achieved revenue surpassing Rs100 crore within 3-5 years of inception, fundamentally reshaping the dynamics of brand selling and consumer shopping.
With a dedicated focus on appealing to millennials, the company makes substantial investments in digital marketing, particularly on platforms like Instagram. These inventive strategies, combined with a cost-effective product range, have delivered outstanding outcomes for the company, positioning them as leaders in the audio market.
Pritesh Asher: Absolutely, the Indian retail landscape is undergoing significant transformation, driven by changing consumer behaviour, technology advancements, and the growth of e-commerce. Here are some of the key trends that are shaping the Indian retail landscape:
Increased Online Shopping: The COVID-19 pandemic has accelerated the shift towards online shopping, with more consumers turning to e-commerce platforms to meet their daily needs.
According to a report by Nielsen, the e-commerce market in India is expected to reach $180 billion by 2025, growing at a CAGR of 30%.
Rise of D2C Brands: The growth of e-commerce and social media platforms has made it easier for D2C brands to reach customers directly, bypassing traditional retail channels. According to a report by D2C Insights, the D2C market in India is expected to reach $100 billion by 2025, growing at a CAGR of 25%.
Personalization and Customization: Consumers are increasingly seeking personalized and customized products and services that meet their unique needs and preferences. D2C brands are well-positioned to meet this demand, as they have direct access to customer data and feedback, enabling them to tailor their offerings and services accordingly.
Omnichannel Commerce: As consumers shift between online and offline channels, brands are adopting omnichannel strategies that provide a seamless and consistent customer experience across all touchpoints. This includes integrating e-commerce platforms with physical stores, social media platforms, and other channels to provide a seamless customer journey.
The Indian retail landscape is transforming rapidly, driven by changing consumer behaviour, technology advancements, and the growth of e-commerce. The D2C segment is poised
to prosper in this landscape, as it offers several advantages over traditional retail channels, including a direct relationship with customers, lower costs, greater control, and scalability. By adopting omnichannel strategies and leveraging new technologies, D2C brands can create a more personalized, immersive, and seamless customer experience, enabling them to differentiate themselves from their competitors and drive business growth.
Darshan Chhajed: The Indian retail landscape is undergoing a significant transformation, driven by factors such as increasing internet penetration, smartphone adoption, and evolving consumer preferences. The D2C segment is poised to prosper amidst this transformation. One key trend is the growing demand for personalized and unique products, which aligns well with the D2C model's ability to offer niche products tailored to specific customer segments. Additionally, the rise of social media and influencer marketing is helping D2C brands reach a wider audience and build strong brand communities. Furthermore, advancements in technology, such as AI, AR, and VR, are enhancing the online shopping experience, making it more interactive and immersive. D2C brands that leverage these technologies to offer innovative and engaging experiences are likely to thrive in the evolving Indian retail landscape.
Successful scaling of Direct-to-Consumer (D2C) brands is deeply rooted in proficient logistics management. This entails streamlining processes, harnessing technology, forging strategic alliances, and maintaining a customer-centric approach to ensure a seamless and scalable supply chain. While in the earlier section, we dived deeper into the value chain & strategic drivers of successful D2C brands and the upcoming trends, in this section, D2C players highlight the intricacies of an efficient supply chain and the pivotal role of Logistics Service Providers (LSPs) in this ever-evolving journey…
LOGISTICS plays a critical role in the scaling of D2C brands from 0-100 by offering scalable infrastructure, enhancing delivery speeds, minimizing expenses, boosting customer contentment, and utilizing data analytics. Investing in a strong and effective logistics framework is essential for D2C brands to sustain their expansion, ensuring ample capacity, adaptability, and scalability. Through refining their logistics processes, D2C brands can elevate the customer journey, trim down costs, and stay ahead in the swiftly evolving market landscape, securing their competitiveness and profitability.
Tarun Gupta: In the age of D2C commerce, the success of any D2C business hinges significantly on efficient logistics. Timely deliveries and a smooth customer experience are paramount, and effective logistics can be a game-changer for businesses in this realm. As D2C companies expand, they often grapple with the complexities of managing their
logistics operations, and this is where technology becomes instrumental. According to a KPMG report, companies equipped with robust logistics and supply chain infrastructure can potentially slash their delivery times by a minimum of 50%. Technology serves as a powerful ally for D2C companies, enabling them to streamline logistics, elevate customer satisfaction, and ultimately achieve their business objectives.
Technology proves particularly beneficial in managing inventory levels for D2C companies. Advanced tools like predictive analytics aid in accurately forecasting demand and optimizing inventory levels. Through technological integration, D2C companies can mitigate the risk of stock-outs, minimize wastage, and elevate overall customer satisfaction.
Another critical area where technology plays a pivotal role is in coordinating deliveries. Given the myriad carriers and delivery options, ensuring prompt and cost-effective deliveries poses a challenge for D2C companies. Leveraging technology enables these companies to
streamline logistics operations, enhance delivery times, and provide an improved customer experience.
A PwC study has also highlighted that unreliable delivery times lead to 40% of consumers abandoning their online shopping carts. In the current scheme of things, technology has emerged as a solution to this challenge by offering features for more effective tracking of deliveries across multiple carriers. Real-time tracking and delivery status updates empower D2C companies to furnish customers with precise delivery information, thereby reducing the likelihood of complaints and bolstering overall customer satisfaction.
Darshan Chhajed: Logistics plays a crucial role in the scaling of D2C brands from 0-100 by ensuring efficient order fulfilment, timely delivery, and customer satisfaction. In the early stages, D2C brands must establish streamlined logistics processes to handle increasing order volumes as they scale. This includes optimizing warehouse operations,
inventory management, and shipping processes to meet growing demand without compromising on speed or quality.
As D2C brands scale, logistics becomes even more critical in maintaining customer satisfaction. Fast and reliable shipping options become essential to meet customer expectations and compete effectively in the market. This is where Turnaround Time (TAT) becomes crucial. A quick TAT ensures that customers receive their orders promptly, leading to higher satisfaction and potentially repeat business. Implementing advanced logistics technologies, such as automated order processing and real-time tracking, can help improve efficiency and transparency in the supply chain.
Furthermore, logistics can impact the scalability of D2C brands by influencing their ability to expand into new markets. A robust logistics network allows brands to reach a wider customer base and
fulfil orders across different regions efficiently. Overall, investing in logistics infrastructure and processes, including optimizing TAT, is essential for D2C brands to scale successfully from 0-100.
Dr. Ashvini Jakhar: In the realm of retail brands, particularly within the domain of D2C brands, the journey from inception to market dominance depends on the brand's seamless operation and its ability to do swift customer deliveries. This is where logistics plays a pivotal role. Brands that harness efficient and comprehensive supply chains can ensure timely production, optimized inventory management, and on-time order fulfilment. Customer satisfaction, essential for building market credibility and organic growth, is guaranteed only through safe, affordable, and prompt deliveries. By engaging in strategic logistics planning with supply chain partners, D2C startups can reduce costs,
alleviate hassles, and mitigate potential errors. Leveraging the expertise and cutting-edge technologies provided by leading logistics players makes it less challenging to scale from 0 to 100 and beyond while maintaining a high level of product quality and customer experience.
Shivam Pandey: Here are key aspects of logistics in the D2C scaling process:
Order Fulfillment: Streamlining order fulfilment processes is essential. As order volumes increase, efficient picking, packing, and shipping processes become crucial to meet customer expectations and reduce lead times. Implementing scalable order management and warehouse management systems helps handle increased order volumes without sacrificing accuracy or speed.
Inventory Management: Efficient inventory management is vital for
preventing stockouts and overstock situations. Implementing robust inventory forecasting and management systems ensures that the right amount of inventory is available to meet demand.
Scaling may require expanding or optimizing warehousing capabilities to accommodate larger inventory volumes and ensure timely order processing.
Shipping and Distribution: As order volumes increase, negotiating favourable shipping rates with carriers becomes essential for cost-effectiveness. Scaling often involves reaching new markets. Logistics must adapt to international shipping requirements and customs regulations for seamless cross-border operations.
Technology Integration: Implementing automation in logistics processes, such as automated order picking and tracking, helps enhance efficiency and reduces the likelihood of errors. Utilizing data
analytics for real-time visibility into logistics operations aids in identifying bottlenecks, optimizing routes, and making data-driven decisions.
Scalable Partnerships: Engaging with reliable 3PL providers can be crucial for scaling. 3PLs offer expertise, infrastructure, and scalability, allowing D2C brands to focus on core competencies. Building strong relationships with suppliers ensures a steady and scalable supply chain, minimizing disruptions as the business grows.
Customer Experience: Offering flexible delivery options, such as express shipping or multiple carriers, enhances the customer experience and can be a competitive advantage. Keeping customers informed about the status of their orders, including tracking information, is crucial for transparency and customer satisfaction.
Returns Management: Establishing efficient and customer-friendly return processes is important for managing returns as the business scales. It contributes to customer loyalty and satisfaction.
Regulatory Compliance: As a business scales, it may need to comply with additional regulations, both domestically and internationally. Ensuring compliance with shipping regulations, customs, and other logistics-related legal requirements is essential.
What have been the challenges in finding the right logistics service provider? What are your wish lists for them?
Tarun Gupta: Selecting the right logistics service provider has indeed presented some challenges, yet it remains a critical aspect of our operations at BOULT. One of the primary challenges
Logistics plays a critical role in the scaling of D2C brands from 0-100. A robust and efficient logistics strategy is essential for D2C brands to ensure timely delivery of products, reduce costs, and improve customer satisfaction. Here are some of the key ways in which logistics can support the scaling of D2C brands:
Scalable Infrastructure: As D2C brands grow, they need to scale their logistics infrastructure to support their increasing volumes and customer demands. This involves investing in warehousing, fulfilment, and transportation solutions that can handle growth and provide the necessary capacity, flexibility, and scalability.
Improved Delivery Times: D2C brands must ensure timely delivery of products to meet customer expectations and improve satisfaction. Logistics plays a crucial role in ensuring that products are delivered on time and in good condition, reducing delivery times,
we’ve encountered is ensuring adequate coverage across diverse geographical areas. The logistics partner needs to offer extensive coverage to meet the demands of our widespread customer base efficiently.
Cost considerations have been another challenge, as we seek a balance between quality services and budget constraints. While we understand the importance of cost-effectiveness, it is crucial that it doesn’t compromise the reliability and efficiency of the logistics provider.
Credibility is paramount in our selection process. Trustworthiness and a proven track record are non-negotiable as we rely on our logistics partners to uphold our brand reputation through their services. On-time delivery is a critical factor, and any deviation from the agreed-upon timelines can have cascading effects on our supply chain and customer satisfaction.
RTO (Return to Origin) protection is an essential aspect we prioritize. Given the nature of our business, having a robust system in place for managing returns ensures a smooth and customerfriendly experience. Quality control and assurance play a vital role, especially in the e-commerce space. We expect our
and providing real-time tracking and visibility.
Cost Efficiency: D2C brands must optimize their logistics costs to remain competitive and profitable. This involves negotiating favourable rates with carriers, using efficient and cost-effective transportation modes, and optimizing inventory management, warehousing, and fulfilment operations.
Customer Experience: D2C brands must provide a seamless and consistent customer experience, including during the delivery process. Logistics plays a critical role in ensuring that products are delivered in a timely and accurate manner, reducing damages and returns, and providing excellent customer service.
Data and Analytics: D2C brands must leverage data and analytics to optimize their logistics operations, reduce costs, and improve customer satisfaction. This involves using data and analytics to track customer behaviour, preferences, and pain points, and using this information to optimize inventory management, logistics, and fulfilment operations.
logistics partners to adhere to stringent quality standards and maintain the integrity of our products during transit.
Our wishlist from a logistics service provider includes extensive coverage, a cost-effective yet reliable service, impeccable credibility, a commitment to on-time delivery, robust RTO protection mechanisms, and a dedication to maintaining the quality and integrity of our products through stringent quality control measures. These criteria form the foundation for a successful and sustainable partnership in the dynamic landscape of logistics.
Pritesh Asher: Finding the right logistics service provider can be a challenging task for D2C brands, as there are several factors to consider, such as cost, reliability, scalability, and customer service. Here are some of the common challenges faced by D2C brands in finding the right logistics service provider:
w High Costs: Logistics costs can be a significant expense for D2C brands, especially as they scale. Finding a logistics service provider that offers competitive pricing and value for money can be challenging.
w Lack of Transparency: Some logistics
service providers lack transparency in their processes, making it difficult for D2C brands to track their orders and deliveries accurately.
w Limited Scalability: As D2C brands grow, they need logistics service providers that can scale with them. Finding a provider that can handle increasing volumes and deliveries can be challenging.
w Poor Customer Service: Logistics service providers that do not provide excellent customer service can lead to delays, damaged goods, and dissatisfied customers.
w Limited Flexibility: D2C brands require logistics service providers that can offer flexible and customized solutions to meet their unique needs and requirements.
Here are some of the wishlists from D2C brands for logistics service providers:
w Competitive Pricing: D2C brands look for logistics service providers that offer competitive pricing and value for money.
w Real-Time Tracking: D2C brands require logistics service providers that offer real-time tracking and visibility into their orders and deliveries.
w Scalability: D2C brands require logistics service providers that can scale with them as they grow and offer flexibility in their services.
w Excellent Customer Service: D2C brands require logistics service providers that provide excellent customer service, including timely communication, responsiveness, and resolution of issues.
w Customized Solutions: D2C brands require logistics service providers that can offer customized solutions to meet their unique needs and requirements.
w Sustainability: D2C brands are increasingly looking for logistics service providers that prioritize sustainability in their operations, such as using eco-friendly packaging and transportation modes.
Darshan Chhajed: Finding the right logistics service provider (LSP) can be challenging for D2C brands due to various factors. One challenge is the sheer number of available providers, making it difficult to assess their reliability, costeffectiveness, and compatibility with the
brand’s specific needs. Another challenge is the need to balance cost with service quality, as some providers may offer lower prices but fail to meet delivery deadlines or provide adequate support.
Insights from the industry suggest that D2C brands should prioritize LSPs that offer technology-driven solutions, such as real-time tracking and inventory management, to enhance visibility and control over the supply chain. Additionally, choosing LSPs with a strong network and infrastructure can help ensure reliable and timely deliveries, especially during peak seasons or unexpected disruptions. Collaborating with LSPs that have experience working with D2C brands or similar industries can also provide valuable insights and best practices for optimizing logistics operations. Ultimately, finding the right LSP requires careful evaluation of capabilities, cost-effectiveness, and alignment with the brand’s values and goals.
Shivam Pandey: Finding the right logistics service provider (LSP) can be a complex task, and businesses often face several challenges in the process. Some common challenges include:
Cost Management: Balancing costeffectiveness with service quality can be difficult. Some providers may offer lower prices but compromise on reliability or speed.
Wishlist: Businesses often seek providers that offer competitive pricing without sacrificing service quality. Transparent pricing structures are also desirable.
Reliability and Timeliness: Ensuring that the LSP can consistently meet delivery deadlines is crucial. Unreliable transportation or delays can disrupt the entire supply chain.
Wishlist: Businesses wish for LSPs that have a proven track record of on-time deliveries and provide real-time tracking and monitoring capabilities.
Global Reach and Network: For businesses with global operations, finding a logistics partner with a reliable international network can be challenging.
Wishlist: LSPs with a wide-reaching global network, strong partnerships, and expertise in international logistics are preferred.
Technology Integration: Many businesses face challenges in integrating their systems with those of their logistics partners, leading to communication and data exchange issues.
Wishlist: Seamless integration with advanced technology platforms, such as real-time tracking, inventory management, and analytics, is often a priority for businesses.
Finding the right logistics service provider can be a challenging task for D2C brands. However, by prioritizing factors such as cost, transparency, scalability, customer service, and sustainability, D2C brands can find a provider that meets their unique needs and requirements. Logistics service providers that can offer customized solutions, real-time tracking, and excellent customer service can help D2C brands improve their customer experience, reduce costs, and remain competitive and profitable in a rapidly changing market.
In recent years, the role of logistics service providers has become increasingly important for the growth of the D2C ecosystem in India. Companies like Prozo are aiding D2C players by streamlining their delivery processes through end-to-end offerings that encompass order management solutions, inventory management support, warehousing, and logistics. In the competitive landscape of e-commerce, a 2-3-day delivery standard has emerged, posing a challenge for many brands, particularly in the realm of last-mile logistics. Logistics service providers play a crucial role in helping brands navigate complexities such as proximity-based inventory storage, last-mile delivery, reverse logistics, and various other operational aspects. With the technological support provided by these logistics service providers, it has become significantly easier for D2C brands to enter the market and scale their operations across India.
Flexibility and Scalability: Adapting to changing business needs, seasonal variations, or unexpected surges in demand can be challenging for some logistics providers.
Wishlist: Businesses look for LSPs that are flexible, scalable, and can quickly adjust their services to accommodate fluctuations in demand.
Customs Compliance and Regulatory Knowledge: Navigating complex customs regulations and staying compliant with international trade laws is a significant challenge, especially for businesses involved in cross-border logistics.
Wishlist: A logistics partner with a deep understanding of customs procedures, compliance expertise, and up-to-date knowledge of international trade regulations is highly valued.
Communication and Customer Service: Poor communication and lack of responsiveness can lead to misunderstandings and delays.
Wishlist: Businesses appreciate logistics providers that offer excellent customer service, clear communication channels, and proactive issue resolution.
Sustainability and Environmental Practices: As sustainability becomes a more significant concern, finding a
logistics partner with environmentally friendly practices can be challenging.
Wishlist: LSPs that prioritize sustainability, offer eco-friendly transportation options, and have a commitment to reducing their carbon footprint are increasingly sought after.
In short, businesses typically seek logistics service providers that offer a balance between cost, reliability, technology integration, flexibility, and excellent customer service while also aligning with their global reach, customs compliance, and sustainability goals. The ideal LSP is a strategic partner capable of adapting to the evolving needs of the business.
What are the challenges faced by the LSPs in living up to clients’ expectations?
Dr. Ashvini Jakhar: Prozo believes that addressing the challenges in meeting expectations to meet D2C deliveries, requires a combination of strategic planning, investment in technology and infrastructure, coupled with effective partnerships with logistics providers, and a customercentric approach to operations and communication. Sustainability & growth with fluctuating D2C volumes while balancing cost and efficiency presents a major complex problem. Handling returns and exchanges smoothly is essential for customer satisfaction in D2C deliveries. Managing the logistics
of reverse logistics processes, including restocking and processing refunds or exchanges promptly, can be challenging. Overstocking or understocking can lead to fulfilment delays and disappointed customers. Maintaining accurate inventory levels across multiple sales channels and fulfilment centres is critical for fulfilling orders promptly. Other challenges include strong customer communication, timely COD remittance, weight discrepancies, etc.
We believe that LSPs and D2C brands should collaborate to create a seamless supply chain. The relationship between Logistics Service Providers (LSPs) and Direct-to-Consumer (D2C) brands is inherently complementary. D2C brands, with their unique needs, find ideal solutions through LSPs to kickstart and grow their businesses. LSPs offer control over order management and delivery processes by integrating various platforms, such as Order Management Systems, Inventory Management, and Supply Chain Management processes. This integration provides D2C brands with access to effective data-driven inventory planning and helps identify potential weak links in the supply chain, allowing proactive anticipation and overcoming of challenges.
Moreover, the incorporation of advanced technologies in all operational aspects by LSPs provides D2C players with complete real-time visibility over their supply chains. This visibility facilitates cost efficiencies, ensures ontime deliveries, manages reverse logistics seamlessly, and fosters superior organic growth for the brand. A collaborative approach with a long-term vision can help build trust and reliability between D2C brands and LSP players with mutual benefit of brands and customers alike.
During the election year, the government unveiled the interim budget, laying down a comprehensive roadmap for fostering inclusive development, to reach the goal of ‘Viksit Bharat’ or ‘Developed India’ by 2047. Logistics sector is going to play a catalytic role in this ambitious journey and that’s what precisely the government at the helm has been emphasizing through recent policy interventions. Here’s a recap of announcements made at the recently tabled Interim Budget 2024-25…
AColliers report on Interim Budget 2024-25 highlighted that the interim budget indicates the government’s continued commitment towards infrastructure development, affordable housing, green energy initiatives, research & innovation and digital infrastructure. These measures are likely to play a critical role in ensuring sustained growth across diverse segments within real estate. The detailed version of the Union Budget to be announced in July 2024 is expected to further build on the cornerstones of green energy and innovation while retaining the focus on transforming India’s infrastructure and real estate landscape. Government’s continued push for infrastructure development in the form of multimodal logistics parks, expansion of airports, industrial corridors, ports, expressways and suburban railway systems will remain pivotal if India is to achieve the long-
term target of USD 7 trillion economy by 2030.
The Interim Budget for 2024-25 announcement for the implementation of three Economic Railway Corridor identified under the PM GatiShakti for enabling multi-modal connectivity, including (i) energy, mineral, and cement corridors, (ii) port connectivity corridors, and (iii) high traffic density corridors, is a big push towards logistics efficiency and reduction of logistics cost related to rail movement. It will decongest high density rail routes and facilitate modal shift from road to rail and to coastal shipping, thereby reducing carbon footprint in logistics.
According to ICRA, the Interim Budget for FY2025 has reiterated its focus on improving air connectivity
through airport infrastructure development, given the growing air traffic demand, especially in tier-2 and tier-3 cities. New routes offered by airlines, coupled with large aircraft orders to cater to growing air travel demand, will further boost domestic air travel. As far as infrastructure is concerned, there is a healthy 16.9% YoY increase in capital expenditure to Rs. 11.11 trillion in FY2025 BE from Rs. 9.5 trillion in FY2024 RE. The outlay towards interestfree loan for capex to states will rise to Rs. 1.3 trillion in FY2025 BE from Rs. 1.1 trillion in FY2024 RE.
There is also a modest increase of ~2% in the capital outlay for Railways to Rs. 2.65 trillion primarily driven by a 5% rise in the budgetary support for capex to Rs. 2.52 trillion in FY2025 BE from Rs. 2.40 trillion in FY2024 RE. Gross budgetary support for the Ministry of Road Transport & Highways increased marginally by 3% to Rs. 2.72 trillion in FY2025 BE from Rs. 2.65 trillion in FY2024 RE; allocation towards the National Highways Authority of India (NHAI) has remained flat at Rs. 1.68 trillion in FY2025 BE.
Increase in capital expenditure, although lower than the previous three years, bodes well for the infrastructure and construction sectors and would ensure that the traction of development is sustained. Allocation towards ‘New Schemes’ accounts for 6% of the overall Rs. 11.11 trillion capex, which is a new inclusion in the Union Budget. Continued strong outlay towards railways is expected to boost demand for the wagon and rolling stock manufacturing segments The Rs. 1.3-trillion outlay to states in the form of interest-free loan remains a positive for state-funded infrastructure projects like roads, irrigation and water supply projects. The proposed railway corridors are expected to provide fillip to the construction sector, while enabling multi-modal connectivity under the PM Gati Shakti Scheme and reducing the
logistics cost.
With regards to Ports shipping & Shipbuilding, there is allocation of Rs. 7.0 billion for Sagarmala Project (revenue grant of Rs. 6.6 billion) over Rs. 5.3 billion RE in the previous fiscal (Rs. 4.0-billion revenue grant and Rs. 1.3-billion capital grant as per revised estimates). Rs.1.0 billion has been allocated for shipbuilding and R&D (PY: Rs. 1.1 billion) and Rs. 1.0 billion as capital grant is offered for Inland Water Transport Authority of India (IWAI) (PY: Rs. 1.0 billion). Greater thrust is laid on developing economic railway corridor with emphasis on improving port connectivity and projects under PM Gati Shakti to enable multimodal connectivity.
Budgetary allocation for Sagarmala and shipbuilding, research and development (R&D) is broadly similar to last year’s levels. As this is mainly a revenue grant, the impact on the port sector is expected to be neutral. Capital grant for IWAI is a positive for the inland waterway infrastructure creation. Longterm focus on improving inland as well as port connectivity. Decongestion of railway networks will support port traffic and bring down logistics costs.
“India has made significant strides in the Global Maritime Arena. Under the Sagarmala Programme launched by the Prime Minister for Port Led Industrialization, 14 projects worth Rs. 55,800 Crores have been identified, with 9 projects totalling Rs. 45,800 Crore already completed. The PM Gati Shakti National Master Plan and the National Logistics Policy have greatly enhanced the national logistics roadmap, facilitating swift port-led industrialization and city development,” stated Shri Sarbananda Sonowal, Union Minister of Ports, Shipping, and Waterways.
During the recent 'PM GatiShakti Summit: Towards Logistics Efficiency and Integrated Infrastructure Planning',
Government’s continued push for infrastructure development in the form of multimodal logistics parks, expansion of airports, industrial corridors, ports, expressways and suburban railway systems will remain pivotal if India is to achieve the long-term target of USD 7 trillion economy by 2030.
organized by the Federation of Indian Chamber of Commerce & Industry (FICCI), in collaboration with the Department for Promotion of Industry and Internal Trade (DPIIT), Sh. Rajesh Kumar Singh, Secretary, DPIIT, stated that the PM GatiShakti National Master Plan is transforming the logistics ecosystem in the country. He mentioned that the India’s Growth Story is backed with solid structural reforms, robust macroeconomic management, and investment in physical, digital and social sector infrastructure. This investment in social infrastructure will lead to multiplier effect in the country and contribute to economic growth. He also highlighted that, with the formalization of economy, higher level of financial inclusion are being obtained, digital divide is being bridged and significant investment in financial assets is observed. In line with the Prime Minister’s Vision and India’s commitment to Global South, Secretary, DPIIT highlighted that PM GatiShakti, currently being rolled out at districtlevel, will soon be promoted as global public good.
Smt. Sumita Dawra, Special Secretary, Logistics Division, DPIIT, highlighted that infrastructure and logistics are key drivers of the economic growth. Through launch of PM GatiShakti National Master Plan and National Logistics Policy, government has prioritized large-scale infrastructure projects and improved logistics service efficiency respectively. Some of the key reforms to improve logistics efficiency includes, 23 States/ UTs notified State Logistics policies, Land Port Management System (LPMS), digitization at Ports; NLP Marine, and FASTAG. She stated that one of the achievements from these reforms have been improvement in the World Bank’s Logistics Performance Index Ranking from 44 in 2018 to 38 in 2023. Further, three indigenously developed datadriven support mechanism systems have been developed (ULIP, LDB, and PM GatiShakti National Master Plan).
She also highlighted contribution of the PM GatiShakti programme towards integrated planning, creation of Next Generation Infrastructure, and promoting people-centric development. Some of best use cases of PM GatiShakti in sectors such as telecom, petroleum and natural gas, renewable energy, area-based planning, etc were also showcased. Further, usage of PM
Building on the massive increase in capital expenditure in the past four years, the Budget increased the outlay by 11.1% to 11.11 lakh crore, which represents 3.4% of the GDP. The capex outlay augmentation will have a multiplier effect on real estate value, demand, and overall growth. The focus on creating multi-modal connectivity through new rail corridors, airport expansion, road infrastructure enhancement and metro rail connectivity will support the overall logistics ecosystem while fostering new growth corridors. Also, there are plans for ‘aspirational districts’ and development of the eastern region with the aim to create new engines of dispersed economic development, thereby creating opportunities in associated real estate.
Source: JLLGatiShakti is also reducing critical last & first mile gaps, minimizing disruption to natural resources, avoiding duplication of infrastructure creation and promoting capacity sharing. Investment opportunities in various sectors, including Robotics, Logistics, Warehousing, Waste reduction, and Packaging, were also emphasized.
Close to 90% of the dedicated freight corridors have been commissioned till 10 February 2024, the Parliament was informed recently. Indian Railways has undertaken the ambitious project of constructing two Dedicated Freight Corridors (DFCs), namely Eastern and Western Dedicated Freight Corridors (EDFC & WDFC), to facilitate faster evacuation of freight traffic. While the 1,506-km-long WDFC runs from Dadri in Uttar Pradesh to Jawaharlal Nehru Port Terminal (JNPT) in Maharashtra, the 1,337-km-long EDFC runs from Ludhiana in Punjab to Sonnagar in West Bengal.
"Construction of EDFC has been fully completed and 1,220 km out of 1,506 km of WDFC has been completed," Railway Minister Ashwini Vaishnaw said in a written reply in the Rajya Sabha. As of February 2024, a cumulative route length of 2,557 km has been completed out of the total of 2,843 km. Additionally, the Ministry of Railways has started train operations in the completed sections of two corridors.
The Dedicated Freight Corridor Corporation of India Limited (DFCCIL) — a subsidiary of the Indian Railways and a special purpose vehicle set up to implement the project — has set a target to complete the WDFC by March
Strong opportunities for continued usage of PM GatiShakti NMP for planning multimodal connectivity emerge under many of the Budget 2024 announcements, such as the following:
• Expansion of existing airports, and development of new airports;
• India-Middle East-Europe Economic Corridor, a strategic and economic game changer for India;
• Comprehensive development of iconic tourist centers by enhancing port connectivity, tourism infrastructure, and amenities on Indian Islands;
• Expansion of Metro Rail and NaMo Bharat in large cities focusing on transit-oriented development and promoting ease of living.
2024, barring a 109-km stretch between Vaitarna (river in Maharashtra) and Jawaharlal Nehru Port Trust (JNPT). Notably, the work on the Western DFC stretch from Vaitarna to JNPT, which faced delays due to land acquisition issues, has commenced. The last mile stretch to JNPT is crucial for the fullscale commissioning of the WesternDFC. Additionally, although the DFCCIL has completed the EDFC segment from Ludhiana to Sonnagar in Bihar, the envisioned extension spanning 538 kilometres to Dankuni in West Bengal via Gomoh and Andal will not be undertaken by the agency. The Ministry of Railways is currently exploring alternative options for this extension.
Development of world-class modern infrastructure is paramount as it is a critical growth engine of India, and a primary requirement to become a part of the global supply chains. In this regard, the use of new age technologies and data-based mechanisms including (i) PM GatiShakti (PMGS) National Master Plan (GIS-data-based planning platform, use of AI, advanced tools, etc.), (ii) Unified Logistics Interface Platform (ULIP)
offering ease of logistics, and (iii) RFIDtechnology, Big Data Analytics, and IOT based Logistics Data Bank (LDB), will continue to enable predictive planning and objective, data-based decisionmaking for efficient logistics and integrated infrastructure development.
Since its launch, PM GatiShakti has been utilized in the planning of physical infrastructure and the Area Approach has been integrated for comprehensive planning of both economic and social sector assets (for example, gap analyzer tool for identifying infrastructure gaps, site suitability tool for identifying suitable site location for schools, Anganwadi centres, agriculture market yards, etc.). The use of PMGS NMP is also significantly de-risking infrastructure investments and encouraging FDI inflows through facilitation of logistics efficiency.
With the announcements pertaining to upgrading existing infrastructure, besides building new infrastructure, made in Budget 2024, the role of technology such as PMGS continues to be critical, offering a GIS-data-based decision support system for integrated planning in the logistics and infrastructure sector, and for improving Ease of Living as well as Ease of Doing Business.
This is the compiled report.
Brewing giant Carlsberg leverages transparent supply chain technology to drive its bid to reach net zero carob emissions and ESG goals
CARLSBERG is targeting procurement and sourcing as key drivers of its ambitious sustainability goals. “We've made steady yearon-year progress across all 11 focus areas in our sustainability programme," says Simon Boas Hoffmeyer, Senior Director, Sustainability & ESG at Carlsberg Group. He said this includes taking first steps in our newer areas of focus, including:
• A power-purchase agreement to source renewable electricity from new assets in Lithuania
• Establishing projects with NGOs to replenish water in areas of high water-risk in Cambodia, China, India, Laos
• Using regeneratively grown barley in its brewing operations in Finland, France and the UK.
"We have ambitious targets and commitments, and our journey is complex. Closing the gaps between where we are and where we want to be demands focus and extensive collaboration across the entire value chain."
A key area where Carlsberg’s procurement and supply chain network is contributing to in its sustainability efforts, is improvements in farming and sourcing practices to deliver more sustainably grown materials into its production pipeline.
The company has committed to
sourcing 30% of all agricultural raw materials from regenerative practices and sustainable sources globally by 2030, reaching 100% by 2040.
Pilots running in France, UK and Finland produced 6,927 tonnes of regeneratively grown barley for its Kronenbourg 1664, Carlsberg and KOFF brews. The company is now looking to scale these procurement pilots in the
coming years to maximise the impact of the programme. “We cannot reach our targets alone," says Hoffmeyer. "Partnerships are vital across the value chain, which is why we are collaborating closely with local farmers, traders, maltsters, agronomists and NGOs who provide expertise in the transition to regeneratively grown barley.
“Over time, this will allow us to offer our consumers and customers lower-carbon beers and contribute to improving the ecosystems we rely on. We will cooperate with all relevant stakeholders to ensure that we as a company and our industry, strives towards a net zero farming footprint.”
Another major brewer enjoying success in its sustainability efforts is Heineken Europe, which recently completed the transformation of its supply chain across the region.
Results from this include a 52% reduction in the volume of unique bottles used by the company, and a cut of 50% in the amount of secondary packaging it is using. On sustainability, it has cut carbon emissions in production by 24% compared to 2018 levels. Perhaps most significantly, the company went from having 25 supply and operations planning teams to just one.
WALMART said its suppliers have removed 1 billion metric tons of greenhousegas emissions from their value chains, six years ahead of the target date.
In 2017, the retail giant started an initiative to encourage its suppliers to reduce their carbon footprint, aiming to avoid, reduce or sequester the 1 billion tons of emissions by 2030.
This week, the company said that its suppliers have achieved that goal, working on measures such as energy efficiency, packaging redesign, foodwaste reduction and trucking-load optimization. The company, based in Bentonville, Ark., said that 75% of net U.S. sales in fiscal 2023 came from suppliers enlisted in the project.
The initiative, dubbed Project Gigaton, is aimed at reducing so-called Scope 3 emissions, which are the result of a company’s supply chain and the use of its products. These emissions often represent the bulk of a company’s carbon footprint.
Walmart’s Chief Sustainability Officer Kathleen McLaughlin said in an interview that the great majority of measures reported by suppliers concerned emissions reduction, followed by avoidance and sequestration. The latter method, which includes carbon storage, is at an early stage, but a promising area, she said.
Included in the 1 billion tons statistic is predicted reductions from some energy projects—such as a factory switching energy sources—up to 2030, she said. Project Gigaton sought a 2.5% compounding annual reduction in emissions, with a cumulative reduction of around 30% by 2030 when compared with 2017, she said.
McLaughlin, who is also president of the Walmart Foundation, said the company didn’t request suppliers to disclose the initiative’s cost or financial impact, but that they have cited improvements such as lowered cost. Walmart doesn’t charge suppliers to participate, but offers resources and tools, she said, without disclosing any financial impact for the retail chain itself.
Looking ahead, McLaughlin said in a blog post earlier this week that the company plans to improve and expand the project as well as continue to target zero by 2040 for its operational emissions—which Walmart defines as Scope 1 from its operations and Scope 2 from the energy it uses.
“We are assessing which elements of our Scope 3 footprint are addressable and which elements are largely outside our control, which reductions can be achieved through low-cost interventions and which ones are expensive or not feasible through today’s technology,” she said.
This would include improving the company’s estimates for its Scope 3 emissions footprint with new standards and guidance. In 2017, when the initiative launched, advisers had estimated that Walmart’s Scope 3 emissions were probably 20 times Scope 1 and 2, she said in the interview. The sustainability update comes as the retailer reported fourth-quarter results, with profit down 12% on year to $5.49 billion. Revenue rose 5.7% to $173.39 billion.
In another update, Walmart aims to help accelerate exports from India in categories where the country has expertise, including food, consumables, health and wellness, general merchandise, apparel, shoes, home textiles and toys, according to the company.
The recent supplier summit held in New Delhi “further enhanced Walmart’s commitment to support India’s ambition to develop the country’s supply chain to be a leading participant in global markets, bringing together the Walmart sourcing innovation team and India-based supply chain innovators,” Walmart said. The summit was part of Walmart’s broader effort to triple the number of exports it receives from India to $10 billion by 2027. To date, the company has sourced $30 billion across multiple categories, it said in the release.
DESPITE
a decrease in investments in 2023, absorption levels exceeded those of the pre-pandemic year 2019 by 15%.
In 2023, there was an absorption of 37.8 million sq-ft, marking a 21% increase compared to the previous year. Absorption rates have been steadily climbing since 2021, showing yearon-year growth. Despite a decrease in investments in 2023, absorption levels exceeded those of the pre-pandemic year 2019 by 15%.
The sector attracted investments totaling $646 million in 2023, constituting 15% of the total institutional investment in the real estate sector. However, investments saw a significant decline of 65% from the previous year as investors adopted a cautious approach amidst global macroeconomic uncertainties.
Over the past decade, 3PL (thirdparty logistics) companies have risen as the favoured option for many businesses due to their ability to streamline costs while offering flexibility to clients amidst demand fluctuations. Consequently, the market share of 3PL companies has steadily grown, reaching 44% of total absorption in 2023. Following closely behind are Engineering and
Manufacturing companies, capturing an 18% share, while Retail contributed 11% to the overall absorption in 2023.
In 2023, Mumbai emerged as the top contributor to overall absorption, commanding a 27% share, up from 19% the previous year. The city experienced a significant 69% increase in absorption, reaching 10.2 million square feet. Heightened real estate activities throughout the year led to a 4% annual rental appreciation.
Conversely, Kolkata saw the steepest annual decline of 23%, with absorption dropping to 1.6 million square feet in 2023. Its share also decreased from 7% in 2022 to 4% in 2023, mainly due to limited availability of Grade A warehouses hindering demand growth. Restricted absorption activities in 2023 contributed to a 5% annual decline in rentals.
In NCR (National Capital Region), absorption increased by 21% compared to the previous year, while maintaining its share of total absorption. The city’s strategic location and flourishing e-commerce markets drove demand, resulting in a 2% annual rental appreciation.
Pune witnessed substantial annual
growth of 35% in 2023, reaching an absorption of 7.0 million square feet, attributed to the presence of the trade hub of Chakan MIDC hosting large manufacturing and logistics parks.
Collectively, the southern cities (Bengaluru, Chennai, and Hyderabad) contributed 27% to total absorption in 2023, down from a 34% share in 2022. Absorption in these cities decreased by 5% in absolute terms, reaching 10.2 million square feet in 2023.
Speaking about it, Shrinivas Rao, FRICS, CEO, Vestian said, “The Union Budget 2024-25 is expected to set the tone for the next couple of years. Recent announcements of infrastructure development in the interim budget may have a positive impact on the sector. However, 2024 can be a challenging year for the Indian warehousing sector as investments were on a downward trend in 2023.”
The sector is expected to expand at a CAGR of 10%-13% for the next couple of years, predominated by third-party logistics and e-commerce enterprises. Grade A facilities are likely to be in demand due to their efficient and costeffective methods.
Amazon Web Services & HERE Technology study shows just half of logistics firms using AI and data analytics, while 66% doing nothing around sustainability
THE adoption of technology among logistics companies worldwide has a long way to go, while sustainability efforts are lagging even further behind, a major new study reveals. Tech Trend in Transportation & Logistics 2024 is published by Amazon Web Services (AWS) and location-data platform provider HERE Technologies.
The study shows huge variation across logistics in the deployment of data analytics and AI solutions. The by-country tech uptake figures differ markedly. In the US, 63% of logistics businesses are utilising basic data analytics, way ahead of Germany (50%) and the UK (41%). The publication focuses on Germany, the UK and the US because these countries “represent critical cross sections of global trade and transportation and logistics operations”, the paper explains.
The authors explain that Germany
is one of the world’s leading exporters of goods, the UK is one of the largest importers, while the US is the world’s largest national economy and a leader in global trade.
Transportation and logistics professionals from across the three countries were quizzed on progress being made on achieving more optimised, digitised and sustainable operations. On AI, just 19% of UK organisations deploy it in areas such as demand forecasting. In Germany the figure is 19%, while in the US it is 34%. The report says these low figures “underscore the untapped potential of AI for route optimisation, modernising logistics operations, streamlining processes, and informing strategic decision making.
Cost is cited as the main reason for lack of widespread adoption, with disruption to existing services and a lack of internal expertise coming second and third. In terms of progress on supply chain visibility a total of 71% across the three countries believe some progress is being made here, with 39% citing ocean freight as least visible mode of transportation, and 45% saying last-mile logistics enjoys most visibility.
There are also marked disparities in the countries on sustainability efforts. In Germany, 66% say they do not have sustainability goals in place currently for their T&L operations. The figure for the UK is 60%, while in the US it is 55%. The report says these low figures are likely to increase “as regulations, customer expectations and soaring transportation costs demand more-sustainable operations”.
Across the three countries, an average of 33% who lack any sustainability goals say they have no plans to develop metrics, with just 11% ranking increasing sustainability efforts as the most important consideration, ranking behind issues such as driver safety and improving customer satisfaction. “It’s clear the industry currently lacks contextual data, AI capabilities and the tools needed to optimise fleet deployments, routing, and appropriate mode switching,” said Remco Timmer, HERE Technologies Product Management VP.
