The term “hyperlocal delivery” is still a fairly new one in the world of online commerce and business. It arrived sometime in the first decade of this century and was mostly brought on by the emergence of the food delivery business adopting online business models, aided by the rapid improvement of technology such as internet penetration, the “app-economy,” and the rapid commoditization of smartphones.
Swiggy, Grofers, and Big Basket are some names that were early proponents of this model and met with early success, thereby encouraging other players and industries to adventure into it.
Today, it has witnessed a rapid proliferation into several other industries, including household services, groceries, spas, and salon services.
Hyperlocal delivery: what is it? How is it done?
A relatively new term in the world of logistics and distribution, “hyperlocal delivery” is a delivery service that provides deliveries within a limited (specified) area. The geographical spread may vary between a few miles to several hundred. The supply source of goods generally remains constant.
Under this delivery model, online retailers (e.g., e-commerce firms) typically tie-up with local vendors and stores to sell their available inventory—this ensures speedy order fulfillment by the local vendor as soon as the order is received by the online retailer. In effect, the local store acts as a warehouse for the e-commerce firm!
Pharmaceuticals, groceries, restaurants, cloud kitchens, and household services are segments where hyperlocal delivery is of great use since the convenience of superfast delivery is a prime requirement.
Leading benefits of a hyperlocal model.
Some leading benefits are listed below:
1. Lifeline for local vendors: With the rapid growth of online retailers and the economies of scale that e-commerce firms like Amazon are able to achieve and pass on to their online customers by way of discounts, the ubiquitous local vendor has been under threat of existence for a long time now. However, with these very e-commerce giants now tying up with local vendors, it seems like a “win-win” situation has been achieved.
2. Eases operational pressure on e-commerce/online retailers: Logistical issues of running an online business like delivery models, inventory storage, fresh goods, fleet management, just to name a few!-are suitably taken care of by the local store in this model. Thus, the e-commerce firm only needs to receive and pass on order details to the local vendor.
3. Order tracking in real-time: The facility to track online orders via apps is a great way for both delivery firms and customers to ensure handy logistics. Small adjustments to delivery windows, return orders, or delays due to traffic can be made on the fly without too much effort or damage to the environment since the distances traveled are short.
4. Reduced logistical and storage costs: Since goods needn’t be transported over long distances or stored for prolonged periods, e-commerce firms not only shave off huge amounts on their logistics and transportation bills but also simplify (and quicken) the entire process. Natural Extention also reduces the incidence of broken or damaged goods in transit.
5. Customer satisfaction: Speedy order fulfillment is one of the top ways of achieving customer satisfaction. And, as we all know, customer satisfaction is the final metric in achieving a stable business with loyal customers that provide repeat purchases.
Best practices for building an extensive hyperlocal delivery model.
Given below are some critical elements that you must carefully assess while planning your hyperlocal business.
1. Research your wares thoroughly: While a hyperlocal model is applicable to all types of products and services, those that are primed for success with its use are typically one or more of the following: household services, repairs and cleaning, spa and salon services, pharmaceutical products, food, and, most popularly, groceries.
2. Identify target market correctly: Unless you select a target market (location, number of miles served, population, demographics of people living there, lifestyle habits, purchasing power, profile of vendors available for collaborations, etc.), you have set yourself up for failure. Unless you get those points right, you won’t have a target group to sell to, inventory to sell, or local stores to partner with!
3. Identify local partners: By extension of the point above, the target market you select must include both demand and supply-side assessments. You may find a locality that has enough demand but a poor network of local vendors to fulfill those orders—that would mean servicing those orders from greater distances, thereby nullifying one of the very core benefits of hyperlocal delivery.
4. Select delivery methods judiciously: Using local transport and vehicle companies to fulfill local orders is an efficient and cost-effective option. This means you use local delivery services, drivers, and warehouses. Not only do they know the area well, but it also cuts delivery costs. Additionally, it is likely that such a local network already has knowledge of customers in the area and can use it to service them better and build lasting relationships for you.
5. Offer various modes of secure payment: Online payment can typically create fear of technology and security fears. Be sure to not only use secure methods of payment but also make available all payments options so that you offer the consumer his preferred choice. Remember, that failure to provide ample payment options typically cause a high rate of cart abandonment.
6. Website and App design: Your customer will be ordering online via your e-commerce website or App. Make sure your UI and UX are well designed, uncomplicated, and efficient. If a customer has to struggle through the ordering process, you are taking away an important benefit of the hyperlocal model, i.e., convenience and speed!
As is evident, the hyperlocal model is here to stay. While it will evolve and improve as time wears on, it provides a convenient model for all concerned (customer, local vendor, and e-commerce firm). As a supplier, an important point is to make sure you are using all forms of modern technology to run your operations, such as modern, automated last mile delivery software.