FLIPKART WIRED
NATIONALS ROUND
IIM Calcutta | Team Insignia
Rajat Vardiyani | Shubham Ranka | Vinay Sheoran
Case Analysis / Research Recommendations TPC Calculation
CASE ANALYSIS CATEGORY PAIN POINTS IN CONSUMER BEHAVIOUR
Problem Statement Touch & feel of the products before
Clothing category has been buying
selected for our analysis of this case
50% increment in annual rolling
Trust in showrooms remains the
TPC in a category for Flipkart in 6 Why Clothing? biggest barrier to ecommerce
months
28% of new online shoppers start
with fashion. Addressing their needs Problems in Returns & Quality issues
Objectives
would be a key to drive repeat
▪ Increasing recall and loyalty among customers purchases
towards Flipkart 200% growth expected in next 4 Third Person Reassurance in Fashion
▪ Develop implementable strategies & provide years in Fashion category of which
specific recommendations with an 52% of demand is in Clothing sub-
implementable timeline category Lack of Instant Gratification over
online platforms
70% of mature customers who buy
Approach multiple categories, buy in fashion Increasing importance for product
▪ Secondary research to identify key drivers in category assortment
the industry and shopping behavior insights
▪ Conducting surveys to get first primary insights
33% of the shopping search on Reducing importance of discounts
directly from a diverse set of customers
Google is fashion related and is for mature customers
▪ Developing implementable strategies to close
the current gaps in the offerings growing annually at a rate of 65%
Source: conversio.com
Case Analysis / Research Recommendations TPC Calculation
1 Measurement Profile of user/Virtual Fitting Room 2 Alteration service at doorstep
Problem: Many a times user finds his size is not available after shortlisting a product
✓ As user enters clothing segment: Ask him for his fitting measurements, if unavailable ✓ Provide alteration service for minor fitting
• Enter the measurements or provide it in reference with adjustments if the customer pays upfront
other brands ✓ Flipkart will nurture a partner for alteration
• Share their profile with family members or friends service starting from Tier-1 cities
• Choose the profile type to get only relevant sizes or not ✓ Delivery person will collect product along with the
choose any profiles alteration measurements and deliver it to the
Sizing Issue
customer by next day
✓ Recommend products basis the option of customer profile
✓ Delivery boy can also ask for measurements, if not
(BMI, most purchase)
already entered by the customer.
✓ Create a mannequin basis chosen customer profile, on
Challenge: Logistics cost
which customers can try different sizes & colour
✓ Option to zoom and spin model to see a 3-D visual
✓ Can use your picture to change skin & face of model Try before you buy
✓ Size chart can be added as a 3rd image with product
4
Challenge: Maintain static mapping of size, educate
✓ Option of ordering three products by
customer about measurement, training data for mannequin paying for one
✓ If the customer rejects all three then
Touch and Feel: Quality
Social Sharing: Share your product charge a nominal fee of Rs.50
3 ✓ Launch this service for Category A
✓ Buying though ecommerce platform lacks the customers and then to other segment
availability of friends/family member’s ✓ Also enable exchange option on Flipkart
recommendations for reassurance of customer’s platform, in addition to return
Reassurance
Third Party
purchase decision Benefits:
✓ Customers can share the picture of clothing tried onto ✓ Attracts the customers, who demands touch and try of the product
their personalized mannequin on a single click with 2 ✓ Impression of better customer service: Improve the brand image.
people on WhatsApp or Facebook messenger ✓ Not really that risky: Free delivery and returns anyways promote over-ordering
✓ Allowing customers to share product with more people creates an impression of spam and returns after trying. This way instead reduces the admin costs of refunding
✓ Enable posting of pictures by customers after trying of products, increases credibility • Pilot Phase: Launch in less congested areas
✓ Enable a feature to recommend the product to a friend/colleague Challenge: Keeping away chronic returners, large share of rolling inventory
Case Analysis / Research Recommendations TPC Calculation
5 Adopt Pivotal Customer Event approach (PCE): 6 Launch “Flipkart at your place” centre
✓ Target events which are important to customers and Target Segment: Tier 4 customers
generate economic benefit for business Idea: Increase Flipkart’s presence by making it visible and
✓ Enable cross selling of products to channelize available in all places.
purchase of bundled products in the Clothing Challenges: E-commerce in rural India requires assistance
category using brand proximity • 91% of rural customers do not know how to enter their full
address in English, leave alone shop online Flipkart At Your
Stated Demand Actual Needs Potential final offerings • Since village homes don’t have proper addresses, so typical Place
doorstep delivery doesn’t work in villages
Potential PCE: Interview or • Formal trousers
formal gathering • Tie ✓ Design a hub and spoke model for logistics
• Formal Shirt ▪ Offer products and • Formal shoes ✓ Provide a trusted local retailers with tablets, who would assist customers
• Tie services to aid in • Blazer in online shopping and checkout process, educating them
planning the interview • Formal shirt ✓ The tablet will be available in regional language
wear ✓ Benefits to Retailer: No capital investment, No inventory, earns
commission on transactions, increased customer’s loyalty
✓ Delivery notification will be sent to customer’s phone no.
✓ Same retail outlets will act as ordering point, Pick-Up Store, Return point & customer Care Centre
Potential PCE: Wedding
• Bridal wear Challenge: Logistics & distribution connectivity to Tier-4 cities
• Lehenga ▪ Offer products and
services to aid in • Hand bags
• Stilettos Offering Flip Krowns Chat Box
plaining the wedding, 7 8
reception, honeymoon
• Clothing accessories (RFM value) (Customer-Seller initiative)
✓ Reward crown points on every ✓ Offer personalized advice
purchase based on RFM value (higher over chat
Potential PCE: Family
function or festival % to R & F), birthday’s ✓ Allow customers to
▪ Offer products & • Kurta ✓ Eligibility to redeem points > 500 interact & negotiate with the
• Pajamas points sellers; rate the chat later
• Traditional services to aid in
Kurta plaining festive wear • Juti ✓ User can also buy Krown points in advance ✓ Notify seller for stocked out clothes in demand
▪ Tie up with offline ✓ Initiate “Sales of the Quarter” campaign by ✓ Live Chat allows offering information on products
sellers, who provide giving lucrative offers on lifestyle category to multiple customers simultaneously
clothes on rent
Stickiness Platform enhancement
Case Analysis / Research Recommendations TPC Calculation
Flipkart Revenue Data
TPC Calculations
After
Total Transactions 38.98 mn 56.48
2017 Units implementation
Net Transactions 33.13 53.20 61%
Fashion Sales (India) 70 USD bn
Flipkart TPC 2.70
Ecommerce (5% of total
Flipkart Clothing TPC 3.22 4.97 54%
fashion) 5% 3.5
Flipkart (70%) 70% 2.45 Time between purchases (days) 113 73 Growth rate
Flipkart Only 35% 0.86 USD bn Total % Returns 15% 5.81%
Increase in wallet share After
Clothing (Flipkart only) 50% 0.43 0.61 from 25% to 35% Return Reason Improved by Implementation
Clothing total 1.72 1.75 Quality 23% 60% 1.38%
Growth in clothing Size 40% 80% 1.20%
expenses 2% Diff. than product image 22% 50% 1.65%
Avg Transaction Value Others 15% 30% 1.58%
(Clothing) 11 USD 11.00 Overall 100% 61% 5.81%
Total transactions 38.98 mn 55.66
Flipkart Customer Data Source of Improvement
2017 After implementation 1. After implementation of ideas, return rate reduces by 61%
2. Basis on recommendations, the wallet share of Flipkart in clothing increases from 25 % to 35 %
Online fashion shoppers 60 mn New customers 0.41 mn
Flipkart Fashion shoppers 42 TPC for new customer 2.00 ASSUMPTION
Flipkart Only Fashion shoppers 14.7 Net Transactions 0.82 Result
Clothing 70% 10.29 Annual TPC of clothing sector increases by 54% in 6 months
mn Total customer 10.70 4%
Growth rate
ASSUMPTIONS
After
1. Neglect iteration rate of customers SUMMARY Actuals Growth %
2. 5% of total fashion sales happen on ecommerce
improvement
3. 70% of ecommerce sales happen through Flipkart 54% Transactions (mn) 33.13 53.20 61%
4. 50% of Fashion sales constitute of Clothing
5. Flipkart constitutes 25 % of overall Clothing spend
Customer (mn) 10.29 10.70 4%
6. Avg. Transaction vaue for clothing is ~ Rs. 700 Annual TPC 3.22 1.75 54%
7. Total retur % is 15 on ecommerce clothing
8. Increase in clothing overall expenses y-o-y is 2%
9. Overalll 10.29 mn users is the consumer base of only Flipkart in clothing Refer to the file for
10. There are 4% new customers, as a result of new initiatives (y--o-y) TPC Calculations:
11. TPC for new customer after an year is 2
