COVID-19 impact: As retailers go omni-channel in festive season, this German logistics player bets on warehousing

Though the COVID-19 pandemic may have underlined the need for retailers to be omni-channel to maximise sales, it is easier said than done.

For instance, an apparel seller may want to sell products in physical stores, its online portal and on marketplaces such as Amazon and Flipkart. After all, it would not want to miss out on a customer in times when it is tough to find one. However, in order to ensure that the supply of products is in sync with the demand - across the three mediums - the apparel retailer needs a complex orchestration of back-end operations.  Few retailers have the know-how to manage this.

This is where Vishal Sharma hopes to step in. Sharma is the chief executive officer – Cluster India and Indian Sub-Continent of DB Schenker, which provides logistics and supply chain solutions to its clients.

The Indian arm of the German logistics major is betting on this need among its clients to manage their inventories, and is also doubling its warehousing capacity.

"Before the COVID-19 pandemic, customers would look at their distribution strategy from the point of location and cost. However, now the focus is on being omni-channel, and having the flexibility to manage the supply," Sharma told Moneycontrol in a recent interaction.

For DB Schenker, this means warehousing is not just about storage and distribution, but also about supply chain orchestration. "Companies now want this whole orchestration piece, rather than thinking just about the unit cost... if the sales are low, every order becomes important. And companies can't afford to not to fulfill an order because they didn't have the right inventory at the right place," explains Sharma.

While over 80 percent of retail outlets are now open across the country, following the different phases of unlocks, customers are still reluctant to visit physical stores.

Recently, India became the second country after the US to report 7 million COVID-19 cases. This means retailers are looking at an omni-channel strategy to expand their reach among customers.

The largest box ever

DB Schenker, which has 1,800 clients across sectors in India, recently opened a new warehouse in Gurugram. In the first phase, the warehouse will span over 25,000 sq meters. Eventually, when completely done, the warehouse will have a spread of 10 lakh sq meters. "It's our largest box ever," said Sharma.

That will go a long way in meeting the company's target to double its present 3.5 million warehousing capacity over the next four years.

The company also plans to expand its footprints. Today we have 49 different sites in the country. "Some of them are owned by us, some of them are customer-owned facilities. And we manage them," said Sharma.

He said the company plans to increase the numbers of sites, but may not need more than 60. The idea is to cover large parts of the country from the main clusters, including Mumbai, Delhi, Chennai, and Hyderabad.

Vishal Sharma, CEO – Cluster India and Indian Sub-Continent, DB Schenker.

The expansion comes at a time when the biggest online marketplaces are gearing up with their annual festival sales. Many retailers are hoping to make up for the losses in the lockdown, with sales during the festival season. And that's why more and more of them want to sell across platforms.

"If it’s retail, there’s a different way of sending a product from the warehouse, if it’s a marketplace, there’s a different way of sending it, depending on their contracts. That whole mix of online and offline is what you really need," says Sharma.