Flipkart is setting up collection centres for online customers to pick up their orders at their convenience, hoping to solve the costly problem of failed package deliveries.
It has launched 20 so-called ‘experience zones’ in 10 cities and plans to open 100 centres across the country by March.
These collection centres will also be a key strategy element for the ecommerce giant to expand to small towns and villages that can be serviced solely by such facilities. Flipkart is launching these centres in conjunction with its logistics arm Ekart.
“We believe this model is a resolution to customer unavailability issues, as it offers consumers a choice to adjust the delivery time and location according to their convenience,” said Neeraj Aggarwal, senior director of delivery operations at Flipkart. “It also provides a solution to restrictions for ecommerce entry into tech parks, gated communities, and universities.”
A main challenge for e-commerce companies is the unavailability of customers during the time of delivery, which kicks off a process that ramps up costs for both Flipkart and its merchants. Collection centres could resolve this problem as well as eliminate last-mile delivery costs, which account for about 28% of the total cost of transporting goods.
A six-month pilot of the project saw at least 80% of orders picked up at the collection centres, Flipkart said.
Flipkart will introduce other value-added services at the ‘experience zones’, including spot trials, instant returns, cash on return, open box deliveries, product demos, and other third-party repair services, Aggarwal said.
Globally, customer pickups of ecommerce orders are not a new strategy. Amazon launched Amazon Locker in 2011, through which customers can retrieve their packages at a local locker location using a personal code. The company also has thousands of pickup points across Canada.