shrinkhala'14 jabong caselet

8/11/2019 Shrinkhala'14 Jabong Caselet

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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

All Rights Reserved by Jabong.com Page 2of 16

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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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%



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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%



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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

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