Prep lessons that gave Flipkart a leg-up
The e-tailer focused on product selection, affordability and service levers to dominate this year’s sale season so far
Leading e-commerce firm Flipkart took pole position as it eyes top honours in the year’s last quarter that marks the festive season, because of an impressive performance in its annual Big Billion Days shopping fest that concluded a week ago. While the Indian e-tailer claimed to have cornered 70 per cent share of the online shopping market from September 20 to 24, according to research and advisory firm RedSeer Consulting the industry generated ~9,000 crore ($1.5 billion) worth of sales. What did it take Flipkart to leave no stones unturned in its preparations for an event that can set the tone for a vital three-month period, which contributes 35-40 per cent of the year’s sales for e-commerce players?
Smrithi Ravichandran, senior director at Flipkart, points out that the company began to make preparations for the festive sales by focusing on the product selections, affordability and ramping up its service levers.
In terms of selections, differentiation with an emphasis on what the customer needs but is not able to get in the market was a target for Flipkart as it tried to step up in every segment including fashion, home and mobiles. Citing examples, Ravichandran says, “We tied up with Madura to launch the Peter England University which is a new segment within the Peter England brand. We also work with Prestige to launch a specific set of cookware, basis what customers need and what is available exclusively on Flipkart. So we got exclusive selections from entry, mid to luxury segments for customers.”
Secondly, affordability has been given a big push. Last year, Flipkart had launched no-cost EMI and product exchange. The company tried to ensure a strong coverage under product exchange and no-cost EMI. It also introduced debit card EMI, an industry-first initiative. “We have enabled three of the largest private sector banks on debit EMI, basically giving EMI to customers who do not have easy access to credit. Credit card is the other mode that we enabled last year,” says Ravichandran.
Besides, a “buy now, pay later” feature was launched that gave loans of about ~5,000 to a select list of customers who could repay within a month. This worked on the insight that customers want to decouple payments from delivery because they want to see the product before making the payment.
Third, the company worked on improving the experience of delivery, including customer support, and ramped up its supply chain.
Demand generation is an important aspect of sales. So, although Big Billion Day has its brand name, the company tries to reinvent marketing around it every year. “Last year we ensured we don’t spend a few hundreds of crores on media, but do something which is more run-of-the-mill. We decided to continue that and amplify it 10 times where we looked at relevant and funny creatives for customers, and putting it on appropriate media platforms,” adds Ravichandran. So, apart from running television commercials on digital channels, it took to innovations such as ads for the Mumbai local train or Indigo flights.
The company gained an important lesson from last year’s sales — create playbooks that employees could refer for every stage so that the processes are less chaotic and smoother. In 2016, there was also a more hurried approach to estimation of traffic or gauging whether the payment partners are geared up for the increased scale. This year, the company got all the stakeholders in the ecosystem — from Flipkart owned Phone Peto payment partners and third-party players — scale tested to avoid any downtime throughout the sale.
Adds Mrigank Gutgutia, engagement manager, RedSeer Consulting, “In terms of the signing of exclusive deals and the supply chain preparation Flipkart learned much from last year’s experience. The second is the selections they had, including tie-ups with exclusive smartphones and other products. Third is the tie-ups they had with banks for the EMI schemes. Together they played a role in the front-end offerings to customers. These have been the major levers of their success.”
He says that consumer support was a pain point in 2016, while logistics experience was also a challenge for firms.
According to RedSeer, in 2017 the overall gross merchandise value for the industry is expected to reach ~10,000 crore ($1.7 billion), up from $1.05 billion in 2016.
Ravichandran agrees that although the company is viewing its Big Billion Day performance as a leg-up in the race ahead, the growing scale every year throws up fresh challenges. “The payment gateways of banks were just above the peak threshold that we needed, and with the logistics support we were able to manage this year’s numbers. But next year, it will be challenging for everybody in the ecosystem.”
Last year we ensured we don’t spend a few hundreds of crores on media, but do something which is more run-of-themill. We decided to continue and amplify it 10 times where we looked at relevant and funny creatives for customers