elecronics supply chain
27/06/2018 Blog

The Dot Com(e) in Consumer Electronics

by Mr. K S Raghu, General Manager.

The way consumers shop for electronics has evolved and this new trend in the purchasing experience is here to stay. E-commerce has changed and is still changing the purchase and service cycle in the consumer electronics market. Making products available quickly and in a user-friendly manner is now the name of the game. Thanks to this drift in the consumer’s experience, the industry is becoming increasingly customer-centric.

Even manufacturers are embracing this medium whole-heartedly. Many mobile handset launches happen with an online marketplace and are available only on that platform. With a few marketplaces providing the GST benefit, even business purchases of laptops, handsets etc have started happening online.

The electronics that are bought online, often come with an expectation of a speedy conveyance. Keeping this in mind, the manufacturer has to make provisions for improved mobility of the products from the factory to the consumer. Among these purchases, daily usage products like computer mouse or chargers require faster delivery than the average items. More than that, the expectation of short delivery times usually goes hand in hand with a demand for transparency.

Consequently, the effort that must be put in to make this happen has increased sevenfold. Often, the customers are completely unaware of this and their experience is limited to product purchase. The manufacturer has several strata to keep in mind while planning the distribution of electronic goods in the e-commerce market.

In the customer first market, the product is expected to be delivered in a condition that is as pristine as the offline stores. This requires specialized handling of the products in transit as well as in storage. The manufacturer must choose the logistics service provider wisely, keeping in mind the skill-set required to ensure delivery in mint condition every time. This parameter is now measured alongside the assumed conditions of speed and transparency, which have become an integral part of the e-commerce market. A slight mis-step may result in the loss of a loyal customer.

The storage of these items also plays an important role in the quality of delivery. If the products are improperly stored, it may result in damaged or faulty products reaching the customer’s doorstep, resulting in a gigantic waste of capital to return the product, replace it, perform an audit, and cull out the source of the issue to keep it from happening and to maintain the efficiency of the electronics supply chain.

Keeping in mind the requirement of speedy deliveries, manufacturers must ensure the products are stored at locations that are as close as possible to the hot purchase zones. This indicates an investment in data analytics to identify the optimal locations to facilitate the deliveries. The system is also encouraging users to visit self-pick-up points to avoid the delay even further. This indicates a requirement of these pick-up points to sport store level presentability.
Additionally, several third-party businesses have stepped into the game with innovative solutions to facilitate last-mile delivery. Manufacturers are leveraging these new logistic options to satisfy customers. New and trendy delivery solutions like using the local motorcycle users to improve last-mile efficiency is paying off and the consumers are seeing the most benefit.

From an economic standpoint, consumer electronics prove to be extremely valuable if products are returned in entirety. More often than not, the products turn out to be faulty or may not perform as expected, resulting in the request for a return. This is because the e-commerce supply chain is still to reach a level of storage and distribution expertise that results in 100% success rate. The return however, may prove advantageous for the manufacturer, as the functional parts that are shipped back along with the product are invariably reused for future products. This is perhaps the best advantage of product return in the e-commerce market.

While planning the complete electronics supply chain, it is imperative to consider the efficiency of the local distributors that play a vital role in last-mile delivery. Because of their reach and close proximity to the consumers, collaborating with them turns out to be an important variable in the equation. The distributors, to gain a competitive advantage among themselves, employ innovative solutions of their own to ensure quality service. This gains them favour and promise of more business in the future.

Looking back, the market for electronics has come a long way indeed, from the excruciating searches, to painfully long store visits, all the way to the standardization and convenience of online purchase.