The D2C Dilemma: How 3PL challenges hurt CX, growth

As brands continue to expand their digital presence, logistical efficiency remains a top priority

New Delhi: In the fast-paced world of e-commerce, maintaining efficient and reliable logistics remains a critical challenge for brands striving to meet customer expectations, say representatives of different D2C brands.

Several brands from diverse sectors – including perfumes, jewellery, bespoke fashion, and spiritual products – spoke to IndiaRetailing, expressing concerns over logistical inefficiencies threatening customer loyalty, revenue, and brand perception.

Logistics failures impacting CX

For brands that prioritise quality and trust, delays and mishandling by third-party logistics (3PL) providers can be catastrophic. The repercussions are often immediate and far-reaching, damaging customer relationships and reducing repeat purchases.

Tarvinder Pal, Co-Founder & CEO, Nisara Perfumes, explains how delays from 3PL partners can disrupt their luxury experience. “A late delivery can transform eager anticipation into annoyance, influencing the views of first-time buyers and possibly deterring future purchases,” he says.

“Our category is built on wellness and care—any disruption in delivery makes us look unreliable and affects the premium positioning we’ve built,” says Akash Valia, co-founder, Secret Alchemist.

In the jewellery sector, Dishi Somani, Founder of Dishis Designer Jewellery, points out that delays are more than just logistical hiccups—they undermine the emotional and financial value associated with their products. “Even a small delay can result in disappointment, especially when a customer expects a prompt delivery for a special event,” she notes. This highlights a fundamental problem for luxury brands, where customers expect not just quality products but also seamless service.

Similarly, Ravi Gupta, Creative Director at Gargee Designers, emphasises that their commitment to bespoke craftsmanship is compromised when logistics fail to deliver. “When third-party logistics (3PL) services do not fulfill our expectations regarding timely deliveries, it has a direct impact on our customer experience,” he says.

Companies offering products in niche categories are often the most affected by 3PL disruptions, experiencing distinct challenges shaped by their product type and customer expectations.

“Interruptions in 3PL services can turn customer anticipation into frustration. For a trend-sensitive audience, timely delivery is everything,” says Bikash Goyal, Co-Founder, Glam21.

Nidhi Sabbarwal, Founder of Kalyanamm—a company which gives new life to holy waste and recycles it for re-use—sheds light on how logistical inefficiencies disrupt the brand’s core promise of timely delivery, especially given the spiritual and ritualistic nature of their products. “Delays may disrupt religious practices, further influencing customer feelings and brand image,” she says.

Revenue & customer retention at stake

Logistical failures not only dent brand reputation but also have direct financial consequences. Increased return rates, refund requests, and negative online reviews can significantly affect profitability.

Nisara experiences higher operational costs when 3PL issues lead to returns and replacements. “Logistical inefficiencies can create a ripple effect, ultimately affecting our overall revenue,” notes Pal. This cascading effect is common among brands that rely heavily on third-party logistics.

For Dishi’s Designer Jewellery, a single mishap can have long-term repercussions. “A dissatisfied customer might think twice before making another purchase, affecting long-term revenue,” says Somani. Given the competitive nature of the jewellery market, retaining customers through reliable logistics is non-negotiable.

Gargee Designers faces a similar predicament, as delays during critical events like weddings can lead to lost business opportunities. Gupta points out, “Unfavorable experiences can hinder word-of-mouth referrals, which are vital for a custom brand like ours.” Repeat purchases are often tied to positive delivery experiences, especially when the product is crafted with care and precision.

“High RTO rates from delays directly eat into margins. And for new customers, a poor first-time experience means significantly lower repeat rates,” says Valia.

For Kalyanamm, the repercussions are felt both financially and emotionally, as disrupted deliveries during religious festivals can alienate customers. “If a buyer encounters frequent delays, they might be reluctant to place another order,” Sabbarwal observes. Poor logistics can affect not only direct sales but also the brand’s perceived reliability.

“Delays and failed deliveries hit our revenue directly—order cancellations, negative reviews, and poor visibility hurt our sales performance,” says Goyal.

Quality control & delivery timeliness

Apart from delays, handling fragile and high-value products remains a significant challenge. Whether it’s perfumes that require careful temperature control or delicate jewellery prone to damage, 3PL partners often fail to meet the stringent standards these brands demand.

For Nisara, peak seasons like holidays bring logistical bottlenecks that strain delivery timelines. As Pal says, “During peak demand times, logistical bottlenecks frequently result in extended delivery durations, impacting customer satisfaction.” The challenge, he explains, is not just maintaining speed but ensuring the product’s quality remains uncompromised during transit.

Jewellery brands face similar issues, with Dishi’s Designer Jewellery struggling to balance fast delivery with the careful handling of valuable items. “Managing customs clearances and unexpected shipping delays are continual issues,” says Somani, pointing to the added complexity of serving international customers.

For Kalyanamm, environmental sustainability adds another layer of complexity. Sabbarwal explains that “certain logistics partners do not give importance to delicate or specialised items, resulting in occasional product harm.” The brand’s commitment to sustainability demands careful handling throughout the supply chain, which not all logistics partners can guarantee.

Strategic adjustments & mitigation

Brands are not merely passive victims of logistical inefficiencies—they are actively implementing strategies to mitigate these challenges. One common approach is diversifying logistics partners to reduce dependency on a single provider.

“We collaborate with various logistics partners to spread risk,” says Pal of Nisara. This strategy ensures that disruptions from one partner do not cripple the entire supply chain. Additionally, real-time tracking systems offer customers precise updates, enhancing transparency.

Dishi’s Designer Jewellery also adopts a multi-partner approach, especially for international shipments. “For overseas orders, we partner with trustworthy shipping companies specialising in luxury goods handling,” explains Somani. Such partnerships minimise risks associated with fragile and valuable products.

Gargee Designers, meanwhile, has introduced a proactive logistics method, including direct delivery for critical orders when feasible. “We frequently investigate various shipping alternatives to uphold quality control,” Gupta adds. This flexibility is vital for bespoke brands where personalisation extends beyond just the product to include the delivery experience.

At Kalyanamm, focusing on customer communication is key. “We emphasise real-time tracking updates and proactive support in the event of delays,” says Sabbarwal. By setting realistic expectations and maintaining open communication, brands can mitigate customer frustration.

As brands continue to expand their digital presence, logistical efficiency remains a top priority. Addressing these challenges requires a balanced approach, combining robust partnerships, customer-centric communication, and adaptive logistics strategies.

“We collaborate with multiple 3PL partners and use real-time tracking to optimize delivery routes and proactively address issues,” says Goyal.

“We use platforms like Shiprocket to optimize delivery by routing shipments through the best-performing 3PL per pin code, reducing dependency on any single partner,” says Valia.

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