Logistics is the biggest pain point and money guzzler for ecommerce players. Getting a product from point A to point B within a stipulated time frame in a good condition requires a lot of money and thorough planning. Add to that multiple attempts of delivery, cash-on-delivery payment method, reverse logistics and entry barriers in selected States of India.
That’s why great efforts are taken to reduce turnaround time & cost for shipment delivery with the help of technology. One such tech aid is Geotagging.
When deconstructed geotagging means – attaching geographical information tag to various data, sources and places, be it images, videos, websites, social media updates, stores or marketing campaigns to identify & record location. The purpose is to find location-specific information quickly.
You must have seen geotagged images, posts, reviews and information about ‘nearby’ places/things on social media platforms such as Facebook, Twitter, Vine and Instagram. For example: A quick search for ‘Taj Mahal Agra’ on Facebook, and Instagram takes you to the location’s ‘pin icon’ and you get to see all posts (image, video, check-ins, reviews) related to Taj Mahal.
How geotagging helps online marketplaces?
Ecommerce players Flipkart and Paytm use the technical geotagging algorithm to save money on logistics. How? In one of his interviews, Paytm’s VP of Logistics, Sudhanshu Gupta explained how geotagging is helping the marketplace to reduce the delivery time.
“We are currently using geotagging which helps us to identify sellers closest to the buyers’ location… We currently have around 15 delivery partners and would be adding more in the coming days. We don’t decide on which seller is going to deliver the product. That is the decision of the sellers in a marketplace… We now also have 16 fulfillment centers in top tier 1, and tier 2 cities, so that the shipment is always being shipped from the closest possible location to the customer.”
This is how it works – Etailers have developed algorithms that identifies vendors or warehouse location, which is nearest to the buyer. This is to ensure that distance as well as delivery time is reduced. Less distance means ecommerce players/sellers have to spend less on logistics. Less delivery time means buyers won’t cancel order due to long wait. It all leads to timely delivery, less returns, and low logistics & reverse logistics cost.
Another advantage of geotagging is tracking ‘missing’ package and detect fraud claims by customers. In Amazon.ca’s seller central forum, someone posted that how/what should he reply to a buyer who mailed him ‘where’s my stuff?’ after 3 months of the delivering date.
To this one of the vendors suggested, “The post office can look up the “geo Location” which is where the postal worker was standing exactly when they scanned the package as delivered.” This will help to pull out the delivery information of where the package was scanned as delivered and identify if the buyer’s claim of ‘missing product’ is true or false.
In short, marketplaces use this technology to:
Spot sellers closest to the delivery location
Reduce delivery time
Reduce order cancellations & returns rate
Delivery-confirmation by scanning the package while handing over the order
Even India Post recently geotagged around 1.5 lakh post offices for the first time so that people can easily locate the nearest post office, and get to know all service related information.
Sellers’ take: Anti – geotagging
With terms like ‘less cost’, ‘less returns’ attached to geotagging, it was easy to assume that all sellers must be happy with online marketplaces’ technological initiative. After all, sellers are unhappy about heavy returns. But surprisingly (or not so), all sellers aren’t happy.
A disgruntled seller Kidsworldco wrote on vendors’ forum AIOVA, “Issue with geotagging sales r going very low due to this … any suggestions for it.”
Another seller Mahendra wrote,
“Geotagging seems to be one of the worst technical algorithm ever invented by any eCommerce company in the world. By bringing in something like geo, flipkart is actually killing the whole idea of ecommerce. ecommerce does not look for boundaries, it can only win & grow when people can buy stuff which is either not available at their location or is available for a higher price tag. Geo is killing the original USP of ecommerce.”
Both the sellers are implying that due to geotag, their sales have dropped. Although, there are others who hold an opposing viewpoint.
Sellers’ take: Pro- geotagging
Kush Agarwal, President of Uber Urban, Raghuvir Lifestyle Pvt Ltd believes that geotagging is a great move by Flipkart. He agrees that while the number of orders has reduced, return to origin (RTO) and losses has also dropped.
He shared with Indian Online Seller,
“For sellers who are working for other brands, they may feel that geotagging has reduced their sales as they are not getting orders of far off places. But in turn, they are not seeing that returns, delivery time has reduced due to which money rotation is faster. Earlier order used to come but it would get cancelled before delivery as customer wouldn’t wait, or it would take too long to get delivered, which would affect the payment cycle. Because of geo, websites are reducing their losses of reverse shipment, packing material etc.”
Agarwal emphasizes the fact that it isn’t feasible to take orders from other far-off places if the chances of cancellations are high.
However, less sales is a very valid concern as raised by sellers, Kidsworldco and Mahendra. To handle this issue, Agarwal suggests,
“Such sellers should think smart and appoint distributors of their products in areas which are giving them good orders. This will increase sales, as product will be live from many locations. A plan B will always be open if a seller account is disabled by marketplaces, or when external uncontrollable factors like strikes, riots etc disrupt courier pick-ups.”
He shared a personal experience with IOS about the time when there was a strike in Ahmedabad, Gujarat due to Patel quota agitation and pick-up services by courier companies were badly affected. “I as a brand owner was not at all worried about sales, as all clicks and orders landed on by ecom distributors who were based in various parts of the country. This gave me a good look on my balance sheet,” says Agarwal exultantly.
Backing ecommerce company Flipkart and Paytm’s decision to introduce geotagging, Agarwal adds,
“If I was owner of a marketplace, I would implement more policies like geotagging which could reduce my logistic cost per delivered product.”
So here you go sellers, two opposing views on the same thing. Which one do you agree with? Which one would you rather pick – fewer orders & less returns or more orders & high returns?
Do you think that in the garb of geotagging, marketplaces are promoting Product Listings Ads or sellers who have opted for their fulfillment services? Or do you think that it is a genuine and helpful endeavor to help sellers and themselves? Let us know through your comments.