In our ten part Innovation series, let us look into Flipkart under ‘service innovation’ (type7) category.
For folks who don’t know what Flipkart is all about, here is a simple definition – Indian version of Amazon. Couple of ex-Amazon engineers setup Flipkart mainly to provide high quality on-time delivery service, which was lacking in Indian context for a while. Before Flipkart came, there were many popular e-commerce websites (ex: Indiaplaza) who were doing reasonably well. However there were few issues are the services:
- Delivery: Getting on-time delivery of online orders was an issue, thanks to logistics challenges that exist in India even today. Except for few reliable courier services (ex: Blue-dart), majority of them offer sub-standard service. Of course, I don’t want to talk about Indian postal service, which never improved over the years.
- Reliability: Except tech-savvy folks, many people see issues to go online as they still perceive making online payments is not safe. Alternative approaches need to be taken to reach such customers who definitely had a need.
- Support: Many of the e-commerce sites don’t provide 24×7 support even today. Also there are many concerns (ex: not providing on-time responses etc.) that made online shopping experience as a non-pleasant one.
Flipkart understood each of these issues in a deeper manner and solved them from customer context. The most important factor behind Flipkart’s success was to understand the core issue of logistics much earlier. Building an online website and listing a bunch of items is relatively easier than ensuring that the shipped goods reach customers on or ahead of time, resulting in customer delight. In order to ensure proper delivery of goods, Flipkart has setup their own logistics firm ensuring timely delivery of the goods ordered from the site. Apart from that, Flipkart added 24×7 support service for ensuring timely addressing of customer issues.
However the main killer for Flipkart came in the form of ‘Cash-on-delivery’ (COD) service for purchases made thru’ the site, which addressed reliability issue. The COD came as a very good option for customers by providing an option to pay cash only when goods are delivered at their doorstep. By consistently executing on such small but really value adding services (another example being free shipping) from customer perspective, Flipkart is able to emerge as a strongest ecommerce site in India today.
Recently I have been hearing few concerns (about delivery time, non-sustainable discounts etc…). Never the less, by having a strong customer base built with service DNA is really an Innovation in Indian context.
What more examples you can think of when it comes to service innovation?