Technology Plays a Game Changer in Last Mile Delivery
The Real Growth Lies in Rural Markets.
The Next Set of Audiences are not in Urban setups but in Rural Markets.
It is a high probability that you would have read these lines in a business newspaper or heard from the senior management of a big organisation that is planning to find its next customer base in rural India..
It has a large customer base that constitutes nearly 68% of India's population (over 840 million), contributes over 50% GDP and is spread over 6,70,000 villages in over 30 states and 700+ districts.
Today, the appetite and aspirations of the rural consumers is equivalent to that of its urban counterparts. With an increase in the income levels, rise of e-commerce, cheap data & affordable smartphones, this audience wants everything at the best prices. Brands are working hard to ensure that they are able to cater to the rising demand from this audience.
The phenomenon has led to a massive growth in rural retail. It is estimated that the market size of FMCG products in rural India will touch $220 billion by 2025. A large number of brands are either expanding their reach or setting up their shops in rural India. The region has already got a huge fillip in terms of consumption in 2020 thanks to the pandemic (however, that is a discussion for another day).
A birds eye view to the rural market reflects great potential for every product category but penetrating it is not an easy task. A brand needs to clearly understand - geography, consumer psychology, socio-economic factors, sales & distribution routes, affluent clusters, consumption patterns, and other aspects prevalent in the region. It is quite a possibility that without a know-how of these factors, penetrating rural markets could be an extremely futile and a money burning exercise.
Secondly, having the right tools and technology is also essential to a rural penetration strategy. It helps in mapping the affluent pockets, consumer behavior, socio-economic status, predictions, optimisation of routes, managing inventories, payments, workforce; creating the right set of databases, planning marketing strategies for sales and deploying marketing strategies in the right areas at the right time.
It is at the intersection of the above two, a brand can plan a sales & distribution strategy into the rural market.
Today, brands are deploying a plethora of platforms and tech such as artificial intelligence, data collection, machine learning, GIS mapping, digital payments to ensure that they are able to get the best possible insights and generate right predictions for the local retailers as well as the brands to help them create an apt strategy. The following are some of the areas I believe are a must have for every brand before penetrating the rural market.
Here are some of the technologies that can help brands to understand distribution at the last mile.
i. Artificial Intelligence & Machine Learning
Brands are generating tonnes of data from the rural market but a sizable number of them have less or no idea on what to do with it. There are artificial intelligence and machine learning tools in the market that can be deployed to generate relevant insights from the data depending upon the requirement of the brands. For instance, it can analyse the product off take from shelves for a particular geography for multiple brands. This analysis can give a sales team an understanding of their performance into a region vs another brand. These are self learning tools that evolve as the data rolls in them. They can come very handy to the GTM and sales teams in planning the annual calendars and sales funnels.
2. GIS Mapping
This tool can help the brands to map the best possible geographical routes between point A - B. It can be really helpful for the brands to understand the most optimised routes, identify the populated areas, easy to move routes and others. This helps brands to sharp shoot and know where to set foot and how. The idea is always to identify the pockets of affluence and target them first while developing the overall market for the brand. A key insight that has always been shared by the experts is that large population centres may or may not be the affluent centres in the rural pockets.
This tool helps for the retailer and distributor to understand the progress of the shipment. This involves ETA calculation also helping to create a sense of trust and allowing the receiver to plan the use of the cargo.
4. Real Time Notifications
This feature creates the engagement between all the three parties giving them an idea about what is happening with their order on whether it is in the warehouse, on road, left for the destination, or payment has been done.
5. Payment Gateways
This feature helps the three parties to manage their transactions online thereby preventing the use of hard cash, creating transparency and helps in easy to manage ledgers.
6. Data Dashboard
This dashboard usually helps the three parties to select and understand any service or access any archives of records. For instance, it can give a clear insight into a geography on what SKU’s have been picked up most for a product category in the region.
7. Chat Bots
These help the three parties to talk to each for the resolution of their queries, problems or answers.
8. Electronic Proof of Delivery (ePOD)
This helps in creating the records of deliveries made thereby creating transparency and customer satisfaction.
9. Cloud Service & Servers
The brand or aggregator has to adopt †o this service to ensure that all the data generated by the application is stored in a segregated manner and easily accessed by the data analytics team.
10. Apps & Web portals
The brand and aggregator needs to create a friendly application or website to disseminate information, take orders and pass information back to its consumer. This is an ongoing process and takes considerable resources.
11. Predictive Analysis
The AI engines can also help in creating predictions around what works in a particular region and what does not. It will help the brand to know what it should focus on selling in the coming days and the same goes for retailers also on what products they should keep on the shelves.
There is no doubt that the Tech, logistics and last mile operations go hand in hand. The merging of these three segments in the rural ecosystem is an uphill task because of multiple parties involved in it. However, post pandemic, most brands have realised the importance of these segments and are ramping their strengths in it to ensure a smoother distribution and supply lines.
Rural market has proven to be a game changer in the economic revival during the pandemic in India and will emerge as a driver of the economy in the post pandemic world. It is high time that brands who have not paid attention to the rural market should start giving a serious thought about it.
(The author is an expert on rural market, economy, distribution & supply lines. The article is written by Nikhil Kaul, COO, LMCE)