Mauritian consumers are experiencing a similar phenomenon to North Korean rockets – home delivery services are being launched only to crash shortly afterwards as they fail to manage capacity overload and then have to “close for new business” almost immediately.
But these launches are not just to annoy Government who would like to see alternative food delivery sources – they are also frustrating for consumers and for economic operators too.
Setting up a nationwide B2C Home Delivery operation is ambitious, but not impossible, but there are a number of issues and strategies to consider:
Be honest on Capacity
There is little point is trying to move to a Web enabled B2C model if your delivery capacity is limited to a small percentage of likely demand – a delivery capability of 200 orders per day against a total number of households in Mauritius of @ 200’000 just does not work mathematically, and leads to customer frustration and negative publicity.
Doing a simple flow chart – running from order capture, product picking, packing, dispatching and delivery – enables you to work out what is your current capacity. And don’t forget payment capacity! Engineer each step of the process so that capacity is matched in each step.
You then must match order capture to capacity – do not take orders where there is no chance of fulfilling them.
Then you can turn to building capacity. There are lots of very under-utilized taxis on the island ( considered as essential services according to Government notices) – why are they not being converted into delivery vehicles? How else can you use third parties to build capacity?
Decide on your Geography and Maximum Trip
For those of us who are not keen to spend too much time cooking there are options to get food delivery to our homes – a great contribution to marital harmony. Some savvy operators are limiting delivery to within 5 kilometers or less to serve more customers – and limit costs.
With demand exceeding supply it makes sense to service customers closest to your source hubs first, and to insist on designated delivery days and times. Put some order into the B2C offer.
Remember Henry Ford
Anyone who wanted a Ford Model T car in the early days had no choice but to buy a black one – no color alternative. It makes sense for the B2C offerings to be limited in range – concentrate on the fast-moving lines where you have enough stock to be able to fulfill demand.
In the same vein, making payment simple makes sense – some operators, who in their retail outlets took credit cards, are now insisting that they have a bank transfer / Juice payment before dispatch. Makes sense, limits human contact at point of delivery, and improves cashflow.
Define your Service Offer
You need to decide on some key elements:
- Delivery next day / 48 hours or on designated days
- Minimum order by value and weight
- Item limits – already supermarkets are limiting certain items. You do not want to be stripped of stock too fast.
- Communication – how do customers track orders / report issues? Set up a designated toll-free hotline or online customer desk.
And whilst we are talking about communication, communicate your Service Offer. What was a “policy” in B2B now becomes a promise to individual consumers. Make sure they know what to expect from you.
And the other key element – measure actual performance. The key measure is On time In Full – OTIF. You should also be looking at Tele-sales performance – Time to answer calls, dropped calls, call duration – standard metrics.
Go Tele-sales before Web
As you ramp up capacity think about using Tele-sales, where you can manage order numbers, rather than going immediately to Web based order capture, where you cannot manage demand. With many BPOs cutting back on establishment there are certainly enough people trained to do Tele-sales, and with a little organization this is a function that can be managed with people working from home.
When you believe you have an efficient system and you are hitting your service level target – I suggest over 98% OTIF then you might think about switching gear and increasing capacity to cope with demand vis web-based ordering. But to hit 98% you have to find the sweet spot – operating all elements of the supply chain at 100% utilization means you will never achieve anything approaching 98% OTIF – you have to have some headroom in utilization.
A tip – if you want to win at Monopoly, form an alliance. In Mauritius today there are existing B2C operations that have worked well for years – one great example is the Water Jar business. I am waiting to see which operator forms an alliance to piggy-back on the capability of one of the big firms. Think if you had a trailer attached to the back of each water jar truck with additional high value products? Their ordering system works, and their reach is across the island – and they have a great ‘carnet d’adresses’..
At least one operator is using the database given by their Loyalty Card scheme to call high value clients and propose home delivery. It makes sense to better exploit existing known customers – low hanging fruit first. Let’s see how other operators – supermarkets and specialists- start leveraging their databases of clients, and start push marketing using recent purchase data.
Technology is the Great Enabler
B2C operations are going to grow fast in Mauritius as the island adapts to the new realities of life with COVID-19 and the old distribution systems become less relevant. The companies who learn how to use technology and data to find, link up and remain relevant to their consumers will be the winners in the fast increasing B2C channel. And true service delivery is a must!