Is Digital Just Another Temporary Technology Fad? The Story of Prashanth, the Milkman, and His Digital-enabled Enterprise

Sanjay Maradi, Chief Information Officer at KPMG Global Services (KGS) | Monday, 24 September 2018, 08:55 IST

sanjay MaradiRecently, during a meeting, a colleague of mine asked, “Is this so-called digital technology another technology fad that would fizzle out in a few years?” Before we talk about my response, let me tell you the story of Prashanth. I met Prashanth a few years ago when we moved back to Bengaluru. He was the local milk vendor I needed to get onboard. The deal was very simple. We had to pay for the milk in advance. This was done by buying a coupon booklet. There were two separate coupon booklets, one for milk and one for yoghurt. Each booklet had about 60 coupons of half liter each. Based on the type and number of coupons left in a bag hung to the front door, the delivery was made. Prashanth’s product catalogue was very simple– two variants of each product, low fat and regular. Whenever we ran out of coupons, we would write what we needed on a piece of paper and the delivery was made. These paper requests were adjusted during the purchase of a new coupon booklet.

At the beginning of every month or as required, Prashanth would come home and sell new coupon booklets. A few months ago, Prashanth came home with no coupon booklet. He mentioned that he would not be selling anymore coupons as he had moved to a new micro hyperlocal delivery platform, and asked us to give it a try. He logged into an app on his phone and showed us a list of products he would be able to deliver– not just milk and yogurt but a wide range of products such as bread, vegetables and fresh fruits, and various other stuff that most families need in the morning. Orders placed before 11 PM would be delivered the next morning, along with milk. All we needed to do was to install the said app on our mobile, register on it and transfer some money regularly that would be adjusted with our order.

We have been using this service for a few months now, and from a customer’s perspective we are absolutely delighted. Needless to say, no more tracking of coupon replenishment. The money is automatically deducted from my bank account. From just two products and two variants, we now have several options from various brands and all their products  and variants. Apart from milk, we now buy bread, eggs, fresh fruits and vegetables, and they are all delivered by morning. No more emergency run to the neighborhood’s convenience store in the morning. The product catalogue keeps getting better with interesting products– recently, we came across garbage bin liners that are made using old newspapers. While working on this article, I called Prashanth to check whether things have gotten better for him. Here are some of the things that he  mentioned have gotten better ever since he moved to the platform:

• Better customer experience:

• Order fulfillment has improved significantly

• Enhanced product catalogue that keeps getting better

• Higher profits and efficiency:

• Printing of coupon booklets cost money, which reduced his profit

• Coupon distribution used to take 2–3 hours daily. Now everything is available at everyone’s fingertips

• Daily reconciliation of delivery against coupons/slips of paper, which used take about 4 of hours, is no longer performed

• Loss due to loss of coupons/paper slips is now nil

• Knowing what customers want by 11 PM of the previous day helps plan the run efficiently

• Higher revenue:

• Prashanth gets a commission from delivering other products such as bread, vegetables and fruits, which are provided by the company that runs the delivery platform. There are several such stories – payment, funds transfer, taxi hailing, food delivery are some other examples that come to my mind.   For some time, especially during the initial days, digital technology became the hot topic for most conversations in social media. Most of the time it was about how many ‘likes’ a brand could generate on social media channels such as Facebook, Twitter and Instagram. However, I am not sure how much of those ‘likes’ actually translated to customer engagement, leading to a better bottom line.  Hence, rather than technology dependent I would define digital technology as “what connects customers to outcome seamlessly.” It is more of an approach to solving a problem rather than a bunch of technologies that keeps changing. The key word here is customer and the impact is direct. In this ever-intense competitive market space, products and services are getting commoditized rapidly. Providing better or seamless customer experience is increasingly becoming critical for business to survive and grow. Hence, the ‘digital’ kind of thinking is becoming increasingly important.

Coming back to where we started, this was my answer to my colleague, “No, digital technology is not just another technology fad. Companies are using digital technology to enable or engage their customers like never before. It is no longer confined to enterprises. There are several small or micro businesses that are leveraging digital technology for customer engagement or delivery of service. And this is just the beginning.” (Disclaimer: The views and opinions expressed in this article are my own, and do not reflect the views and opinions of my employer.).