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Delivering lifestyle in
ecommerceA Case Study on post purchase customer experience
in an Indian e-commerce company
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Delivering Lifestyle in e-commerce
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1.
IntroductionE-commerce industry has witnessed tremendous growth and attention in last 2 years and its
rampant increase in scale and coverage has set the growth story next best to rapid expansion
of software industry in early 90s.
Going by the extensive studies on the growth of this mysterious giant in making called e-commerce, the primary reasons can be attributed as follows:
Rapid increase in internet penetration
Availability of much wider product range compared to what is available at brick and mortar
retailers
More convenience offered in online shopping.
Lower price and more discount offers available in online channels
Evolution of intermediary and marketplace model reducing cost even further & scope of
increasing product depth and width.
E-Commerce is one of the most exciting spaces for todays global online community and
Indias young startup economy is along for the ride. In the less than three months of 2011,
Indian VCs have already invested over $50 million in seven e-commerce companies, a 400
percent increase over the same period just last year quotes Sony ceberwal, COO, exclusive.in.
Last 6 months have been very eventful for trendy.com with it earning reputation as one of the
leading e-commerce companies. The company has fared extremely well in terms of Views per
day, conversion & brand development featuring in almost all popular e-commerce forums.
Trendy.com has been able to capture the imagination of an average Indian customer by offering
a large catalogue of lifestyle products and a super-fast delivery service to boot quotes leadingforum for VC across the globe.
Ever since inception, the company has embarked on a huge mass communication campaign
through online advertising, social media marketing & multiple TV and radio commercials. It
created its own logistics network, pioneered in WH operations which ensured a significant
presence in the market within a very short span while others took at least two-three years to
build them up.
But the picture is not as rosy as it seems. Ecommerce offers many operational challenges that a
very few companies have been able to manage despite many new ventures budding every day.
The primary catalyst for ecommerce is word of mouth marketing. In lieu of the pertinent
skepticism like will I get my order in time, will it be the same as shown on website, will I get
my refund in time if I return the product, Is the product I am getting original, it is imperative
to practice what you preach for all ecommerce companies.
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Negative flows 1000 times faster than positive reviews. With the advent of various social
networking sites and incredible awareness of consumer rights amongst a middle class metro
resident, one grievance takes minutes to reach hundreds of other customers.
Currently we have 68% new customers every day. The bottom-line is that an Indian customer
is still exploring e-commerce services. A poor first impression presents damaging risk of
losing the customer and hence proving detrimental for long term goal of every ecommerce
company: increasing customer life-time value (CLV).Company that has higher retained
customers survives this intensely competitive battleground Rahul Gupta, Director,
Operations, Trendy.com
Rahul continues, What is as important as minimizing customer grievance is solving them in
time & at par with customer expectation, if not better. This could very well serve the purpose of
retaining the customer. Currently 62 percent of customers who have called our customer care
at least once with a query or grievance, shop from our site again. Our eventual goal should be
to improve this number to 100%.
2.
Query-handling at Customer careThe customer query/grievances are broadly categorized into following:
Pre-dispatch (WH issue)
Post-dispatch from Warehouse (logistics issue)
Product related (Production & sourcing issue)
Returns related
Every query/grievance is essentially concerned with one particular function (mentioned above).
More than 80% of customer queries are handled on call.
Trendy.com has a dedicated in-house ticketing system to manage information and action flow
across function. The ticket management tool serves following requirements of the company:
Seem-less, real time information flow between departments
Monitoring tool for response time of each function on any query/request
Repository of number of queries received at customer care
To answer any customer query, CC agent uses following application:
CRM:The system contains:
Item-wise detail of the order: This explains where the order lies in terms of its
progress in the value chain. One of the following can happen to any item in the order:
Order placed but not confirmed (Confirmation happens only for COD orders. The
order is ready to be processed in WH only after confirmation)
Order confirmed (Order is ready to be processed in WH)
Order in WH (item is processing in WH)
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Item is dispatched (The item is shipped from WH through one of the 9 courier
partners )
Item cancelled (The item is cancelled by the customer or it is not available with
Jabong anymore)
Item returned (Item is returned by the customer after successful delivery which is
referred to as customer induced return or the item is returned without customerinteracting with it which is referred to as Non-deliverable returns)
Item refunded (customer is refunded the amount for the same)
Order details: All details related to customer and the order that is placed which
essentially contains:
Order Number of that order
Billing address and shipping address
Pin-code based TAT (delivery turnaround time for pin code of the shipping
address)
Phone number and e-mail ID Item description of the order
Docket number assigned to shipment (Airway bill number)
All requests and queries raised by customer concerning the order
All emails and SMS sent to customer pertaining to delay in delivery, product related
information, request confirmation etc.
Delivery service provider (DSP) tracking page:This tracking page details out docketwise status of shipments dispatched from WH. The shipment detail can be broadly forward,
return & returned according to the DSP. Exact status of any order once it is shipped can be
traced only through the tracking page. A sample is as follows:
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3.
Introduction to customer queriesEvery I/B query is divided into 2 levels of severity. 1stlevel is plain query and 2ndlevel is referred
to as complaint
Query:
Definition:Any query by the customer that is confined to normal course of order cycle ( the
order cycle is attached in appendix 1) and can be answered using the tools mentioned above is
classified as query.
The nature of query and corresponding volume received on call is described in Appendix 2.
The nature of query-severity 1 is very repetitive. Most of the queries are successfully handled
through given resources & Customer satisfaction (CSat) on such queries are usually very high
Quotes Amit Sharma, Customer care head.
He continues If we manage to pull out a system that shares same amount and quality of
information to the customer, the human touch point for such queries could be maderedundant
This query follows following work flow:
Complaint:
Definition:Any query by the customer that concerns with an exception in the normal order
cycle (Commitment given to the customer is not met) or involves a grievance related to services
that we offer and hence needs intervention by concerned function is classified as Complaint
(Order cycle is presented in appendix 1)
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All complaint or query-severity 2 come after order is placed. The exception could be compiled in
following table:
Bucket Query/Grievances Complaint parameters Share% oforde
volu
Notdispatched
I havent received only one itemof the 2? Order/item is un-dispatched for more
than 24 hours for WH and > vendorprocurement time for marketplacemodel
10% 0.1
When is order going to bedispatched
30% 0.3
What is the status of my order 60% 0.6
Post-dispatch
I haventreceived my order yetIf all items of the order is shipped andshipment is pending delivery > pin-code wise TAT commitment
40% 0.8
The tracking page of the courier
isshowing incorrect details
No parameter. Query-severity 2
registered as a negative feedback tocourier service
30% 0.6
The AWB (Air Way Bill or ordertracking number) number is not
working
No parameter. Query-severity 2registered as a negative feedback tocourier service
10% 0.2
Information on the trackingpage isinsufficient
No parameter. Query-severity 2registered as a negative feedback tocourier service
5% 0.1
Other grievances related to
couriercompany
Grievances could be anything relatedto what the DSP is not supposed to dolike:1. Asking for extra money
2. Field executive (FE) asked customerto collect shipment from hub3. FE being rude to customer4. FE delivered to wrong customer
15% 0.3
Inbound customer queries are the most critical parameter of judging how close the company
is to the services it promises. It is very important to keep customer informed about every stage
of the order. Even more important when there is any exception related to dispatch or delivery
states Sunil Kumar, Director, and Logistics.
The major exceptions on which communication (e-mail, outbound call and SMS) is sent in
present infrastructure are as follows:
1. When any item in warehouse is not available in inventory and could not be picked within
24 hours from order placing (coined as unfulfilled item)
2.
When vendor cant supply a particular item of the order in case of marketplace. (coined
as out of stock)
3. When order is placed but it is not serviceable by any courier company available in the
WH or marketplace (Coined as Out-of-delivery area)
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4. When the shipment dispatched from WH or packaging center in marketplace could not
be delivered within pin-code based TAT
5.
When shipment is lost-in-transit.
6. When shipment is returned to the shipper without successful delivery (Coined as Non-
deliverable returns)
If there is any issue that customer is asking about pertaining to an exception in the process &
even if we have informed customer about the same in advance, it is still a serverity-2 query
because customer didnt read it states Rahul Gupta, director, operations
4.
Customer query resolution modelThe primary target of complaint resolution is CSat which refers to how satisfied customer is with
the resolution taken on the complaint. Following are the measures to identify CSat for any
complaint resolution:
o Repeat complaints received on single order
o # of calls made by customer in between customer resolution process
o Closeness between resolution demanded by the customer & resolution provided by the
company
Trendy.com has fared well in terms of CSat scores and complaint resolution quality. The
comparisons of Trendy.com, company X and company Y on query handling is presented in
Appendix 3.
In simple terms what makes a complaint resolution effective is understanding issues of
customer and taking quick and effective action while keeping customer informed in every
stage of the processstates Amit Sood.
The complaint resolution process is essentially a fairly complex process involving multiple
functions, incorporating scenario based solutions & a communication matrix to keep customer
informed at every stage of process. The process flow chart is presented in appendix 4.
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5.
Challenges in present Query handling modelDespite high Customer satisfaction and reasonable resolution quality, the present model
presents some very critical issues for the organization:
1. High cost incurred on query and complaints. (details shared in appendix 5)
2.
Delayed call backs on CC1 and CC23. High resource engagement (details shared in appendix 6)
I think considering that queries are fairly repetitive and so are few categories of complaints,
it can well be automated using an interactive environment that talks to all the systems that a
CC agent uses currently for query-resolution. The major challenge will be to direct genuine
complaint to right function for grievance addressal & quick resolution out of the list of queries
received through the automated systemstates Rahul Gupta.
There are several companies in India and abroad that have felt a need of an alternate channel
for handling repetitive First call resolution queries. The best practice will be to replicate an
already existent process through another system which is cost efficient and equally or more
effective in resolving customer queries.
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6.
Questions
1.
What are the key customer challenges and their root cause of Trendy.com. How do these issuesaffect customer retention and to what extent?
2. Design an alternate channel for resolution of customer queries which can help the company
improve customer retention and costs and profitability.a. What will be the key features of this system?
b. What will be the organization structure and KPIs? What will be the business impact ofthis initiative in terms of revenue, cost and profitability for the company?
c. What will be the operational plan to ensure better CSAT and less response time?d. What will be the implication on overall cost incurred on the same? Develop a predictive
model for the same.
3. What will be the roadblocks and risk in implementing this system? What is the plan for mitigatingthe risk?
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7.
Appendices*(Appendix 2 and 4 are attached with the case study)
Appendix 1 Order Fulfillment (Order cycle flow chart)
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Appendix 2: Nature of query and volume
Issuebucket Query Standard operating procedure Share
BucketShareoforder
volume
Productrelated
How to use vouchers on theitem that I am purchasing
Take item details.Tell customer the standard way touse voucher & TnCs 30%
8%
I am a repeat customer, do Iget a discount on the item
Take customer details.If voucher is available with thecustomer, tell how to use.Else, no special discount availableout of the way. 20%
What is the colour of the item
Give details of colour throughstandardcomparison on wheel chart 5%
Do you have size fitting me
Take size of the customer and item
description. Let customer knowthrough size chart available on website. 10%
Currently my size is notavailable, can I get the item ofmy size
If available in inventory, placeorder. Else, put item in wish list 20%
My order is not getting bookedon the check-out page throughmy card
Take card details. Educatecustomer with how to use card.Place order if customer cantdo it. 5%
My order is not getting bookedon the check-out page on mypin code
Check the pin code details. Ifserviceable, ask customer to placeorder again or CC agent places theorder himself. 5%
OthersAddress the issue and resolve usingavailable resources 5%
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Issuebucket Query Standard operating procedure Share
BucketShareoforder
volume
Pre
dispatchrelated
When is my order going to bedispatched
Take order number detail orcustomer details to know if order ismarketplace item or WH. Ifmarketplace, dispatch will happen
within and if WH, dispatch will happen
within 24 hours of order placing. 50%
5%
What is the status of my order?It is not shipped yet
If time lapsed is 24 hours for WHitem and< vendor procurement time> formarketplace item, tell the customerabout timelines. If dispatched, tellcustomer the AWB number. 25%
I have received mail statingthat one of the items isundispatched.Please let me know what isthis?
Explain the process ofundispatched to the customer if the
item not received is WH item. Ifitem is marketplace item, tellcustomer about . If any of the followingthings have happened with theitem & customer has receivedcommunication about the same,explain customer about the same:1. Unfulfilled2. Out of stock for marketplacemodel3. Out of delivery area for
WH/marketplace item. 5%
OthersAddress the issue and resolve usingavailable resources 20%
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Issuebucket Query Standard operating procedure Share
BucketShareof order
volume
Logisticsrelated
When am I receiving my order
Take order details or customerdetails and let
customer know about the Pin-codebased TAT(turnaround time) 50%
5%
What is the tracking number ofmy order?
Take order details or customerdetails andshare the AWB number with thecustomer.Let him know when he can expect adelivery 20%
What is the status of my order?It is shipped already
Take order details or customerdetails and letcustomer know about the Pin-code
based TAT
(turnaround time). Give details ofshipment through tracking page. 10%
I want to postpone delivery ofmy order
Tell customer that postponing thedelivery canhappen only when it is out fordelivery to the customer. 10%
OthersAddress the issue and resolve usingavailable resources 10%
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Appendix 3 Comparison of Trendy.com with Mykart.com and Magic.com
Parameters Trendy.com Mycart.com Magic.com
Queries as percentageof order volume
18% 22% 26%
Quality score on firstcallresolution (FCR)
94 97 96
Internal CSAT Score 86 NA NA
% Of repeat complaints 2% 3% 1.80%
Appendix 4: Resolution process
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Appendix 5: Costing for query and complaints
5.1. Cost matrix
Costing matrix Cost*
Inbound call (including salary overheads,fixed cost and variable component incustomer care) Rs 35 per call
Outbound call (including salary overheads,fixed cost and variable component incustomer care) Rs 35 per call
Salary-assistant manager (Logistics) Rs 4 lpa
Salary-executive (Logistics) Rs 2 lpa
*Figures quoted here are hypothetical
5.2 Human-resource details for order status query-handling
dept. Team name Resources Deliverable
LogisticsComplaint escalation team
1 Assistantmanager
Handle complaint resolutionat the end of logistics
3 Executives
Ticket management team 1 executiveHandle Query tickets atlogistics end
WHComplaint resolution team 1 executive Handle complaints at WH
Ticket management team 1 executiveHandle Query tickets at
WH
Customer careComplaint-escalation
team2 Team Leads Handle and redirect complaints
to concerned divisions15 executives
5.3 Miscellaneous details on order status-query
# of queries received a day 700
number of inbound calls by customerduring complaint resolution process 4# of outbound calls made on a
complaint 3.7Average pre-dispatch complaints 40Average post-dispatch complaint 80
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Appendix 6: Sales and cost data of e-commerce companies in India
2012 Data Trendy.com Mycart.com Magic.comAverage SellingPrice
Rs 2000 Rs 1800 Rs 1500
Daily hits on website 1000 K 2000 K 800 K
Items per order 1.5 2.1 1.8Avg. Orders per day 8000 20000 11000Fulfillment cost perorder
Rs 400 Rs 350 Rs 500
Margin on COGSapplied to deriveMRP
25% 30% 25%
Average Discount onMRP
10% 5% 8%
Cost of acquisitionper customer
Rs 1000 Rs 600 Rs 800
Orders per customer 1.8 2.5 2.2