How is the hyperlocal delivery model revolutionizing the ecommerce industry?

Build a platform and prepare for the unexpected; and you’ll know you are successful when the platform you’ve built serves you in unexpected ways.

1. Introduction

Owing to the rapid growth and adoption in technology and forced by the sudden and unfortunate pandemic crisis, the majority of the world is starting to discover the values of online retail and digital landscape. Forced to stay in isolation, a felt need to go online, rapid digitalization and growing urbanization, among others have all significantly contributed to the rise in figures of ecommerce industry across the globe. The way ecommerce marketplaces worked was pretty fine until the customers discovered a need for quick deliveries. And this need for quick delivery and rapid availability of products and services has resulted in the birth of hyperlocal marketplaces.

So, what is a hyperlocal marketplace? Why is it so impactful? And why is the hyperlocal delivery model so desperately wanted? We will find out step by step.

Before we go on to discuss about one of the most fancied concepts- i.e., hyperlocal marketplaces and their delivery model, of today’s times, let us gain brief insights into ecommerce industry and marketplaces that would help us develop a more comprehensive understanding of hyperlocal world.

Ecommerce marketplaces are sort of online ecommerce websites or place where a user can find different brands of products coming from multiple vendors, shops or person showcased on the same platform. An ecommerce marketplace model is the one that utilizes an information technology platform in order to facilitate trade between the buyer and the seller.

This model has been adopted widely by a large number of businesses. Some of the leading and prominent ecommerce marketplaces include Amazon, Flipkart and eBay. Ecommerce marketplaces help to streamline the production process through a simple portal and manufacturers can sell the products directly to the customers.

Besides this, ecommerce marketplaces can create more opportunities for the sellers and buyers. This can be understood by the fact that where on one hand there is real-time information about the updates or slashes in price as well as the availability for buyers to get the best deal; on the other hand, the platform also acts as an additional sales channel for businesses to promote and sell their products and offerings effectively to a large target market.

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Moreover, an online marketplace, since it is not bound to any area or region, can enable overseas sales by providing opportunities to trade in international and global markets. An ecommerce platform substantially reduces the marketing costs of businesses than what they would have incurred had it been for going international through a traditional process.

Below given are some of the ecommerce statistics that can help us know as to how ecommerce has transformed over time and how monumental its impact has been. Let us dig in.

2. Some Ecommerce Statistics

• According to Statista, retail eCommerce market sales worldwide will reach $6.54 trillion in 2023 as against $3.53 trillion in 2019.

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• Statista forecasts the global online sales to reach 22% of all retail sales in 2023.

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• By 2040, 95% of retail purchases are likely to be made online and traditional retail may be hardly existent (Nasdaq).

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• As per a report from UNCTAD, the rise in ecommerce amid covid19 movement restrictions increased online retail sales’ share of total retail sales from 16% to 19% in the year 2020.

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• According to Wunderman Thompson Commerce, 43% of shoppers now feel more positive about shopping online; and approximately 40% of consumers report that they’re more comfortable with digital technology than before lockdown.

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• Half of retail spend is expected to be online as consumers live with covid-19.

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• A study of over 30,000 global online consumers shows that 70% want an amazon prime-like service from other brands and retailers.

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• Wunderman Thompson Commerce’s Future Shopper Report 2022 shows that over two-thirds (64%) of global consumers want brands or retailers to provide a “more innovative” online shopping journey, all the way from the initial product search to the moment of purchase.

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• As per eMarketer report, US ecommerce will cross $1 trillion in 2022.

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• As per eMarketer, the pandemic boost in ecommerce sales accelerated growth in US ecommerce channel advertising to 49.8%.

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• It also states that roughly 70% of online buyers already purchase from foreign sites.

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• Almost 1/4 of all ecommerce orders are predicted to be cross-border commerce by the end of year 2022.

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• According to eMarketer, 80% of retailers worldwide agree that cross-border trade has been profitable or that sellers have successfully increased sales as much as 1,000% after expanding their marketplace presence.

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• According to Oberlo in 2021, 48% of online shoppers go straight to a large ecommerce marketplace.

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• Ecommerce sales are growing so quickly that it is expected to make a whopping 22 percent retail sales worldwide by 2023.

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• In the same report published by Oberlo, the number one reason people shop online is free delivery. Other key reasons include the ability to use coupons and apply discounts (41 percent), be able to read other customers’ reviews and feedback (35 percent), easily return their items (33 percent), and have a quick checkout process (30 percent).

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• Mobile ecommerce accounts for 45 percent of US ecommerce sales.

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• Approximately 84% of online shoppers said they won’t buy from an ecommerce site that is not secure (WHSR, 2021).

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• 85% of consumers prefer free shipping over fast shipping (Deloitte).

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• 75% of shoppers expect free shipping even on orders under $50 (NRF, 2019).

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• 65% of shoppers say they check free shipping thresholds before adding more items to their online cart (NRF, 2019).

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• The number one reason why people shop online is to make use of the free shipping option offered by ecommerce stores (Oberlo, 2020).

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• 5% of global internet users have purchased products online.

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• Segmented campaigns to email subscribers drive a 760% increase in revenue.

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• Online stores with a social media presence have an average of 32% more sales than those that don’t.

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• 74% of consumers rely on their social networks to make purchasing decisions.

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• 40% of all online purchases made during the holiday season are done on smartphones.

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• The average shopping cart abandonment rate approximates 70%. Shipping fees and other extra costs are the main reason why shoppers decide not to finalize the purchase online (Baymard Institute).

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So, having put forth few of the facts and figures about ecommerce marketplaces, it becomes binding upon us to know more about the concept, that has led us to hyperlocal ecommerce and the growing use of hyperlocal delivery model that is revolutionizing the ecommerce industry.

E-commerce, if understood and practiced through a hyperlocal lens, is, in fact hitting the peak of the online world and it opens a slew of opportunities for visionary start-ups, established businesses and aspiring entrepreneurs. The entire hyperlocal model is so efficient and quick that it is giving physically well-established businesses a serious run for their money. By virtue of having a highly efficient model, hyperlocal ecommerce has surely and pretty convincingly overtaken the advantages of a traditional ecommerce.

Let us find out about the various aspects of a hyperlocal journey and the hyperlocal delivery model; And, why is it being adopted by customers and businesses with an exaggerated zeal?

3. What Is Meant By Hyperlocal Ecommerce?

One of the most eye-catching and compelling trends in the ecommerce world is hyperlocal ecommerce. Hyperlocal ecommerce simply refers to an activity undertaken by a business that is aimed at building a local environment or a local network which enables customers to purchase products and services from retail stores or vendors in and around their neighbourhood.

In other words, a hyperlocal marketplace is the one which caters to the needs of customers within a fixed geographical territory. The ambit of hyperlocal operations has grown so big that it has hardly left any industry untouched. Be they food supplies, groceries, laundry services, home essentials or personal care, hyperlocal ecommerce is the pivot around which businesses have learned to revolve and function. Such a fantastic growth has added a new dimension to the ecommerce sector, thereby popularising hyperlocal deliveries.

Hyperlocal ecommerce became increasingly popular during the pandemic of covid19 that affected almost the entire world. With its outbreak in the beginning 2020, global shutdowns and strict social distancing was announced. With this announcement, the world started to feel the need for quick and safe deliveries. This is where hyperlocal deliveries increasingly made their way. Customers found it easier and safer to resort to online shopping for meeting their daily needs. Businesses too relied heavily on a robust hyperlocal marketplace software to generate sales and ramp up their revenues. Hyperlocal delivery model has since then become a widely practiced model among businesses.

The sudden surge in the demands of certain products and growing popularity of brands is undoubtedly due to the pandemic that has pushed each and every vertical of all industries to shift and adapt to the digital medium.

In addition to this, the busy lifestyle, growing sedentary habits and improved standard of living are also accentuating the growth of hyperlocal e-commerce companies as they provide everything at the customers’ doorstep.

So, what’s this model all about that businesses are adopting crazily? Let us find out.

Read more about What is Hyperlocal Ecommerce?

4. What Is A Hyperlocal Business Delivery Model?

A hyperlocal business delivery model, also known as the on-demand delivery model is the one that focusses on meeting the needs of geographically local consumers. The model aims to bridge the gap between demand and supply with an efficient network of suppliers and vendors who fulfil consumer demands by selling them what they need at their doorstep.

Technically, a hyperlocal delivery model is an online business model that caters to customers’ on-demand needs, which are met through a local ecosystem. To put it across in other words, the customer uses a hyperlocal platform or service aggregator (through a website or an app) that assists the vendors to deliver the products and make reach the services to the customer’s doorstep in the respective geographical location. Grocery shopping, food delivery, luxury products, gift items, health care, and many other services have taken a different dimension altogether with the successful coming into being of hyperlocal e-commerce platforms.

What is the USP of the hyperlocal delivery model?

The unique selling proposition (USP) of the hyperlocal business model is its ability to get good quality products and services delivered at peoples’ doorsteps at ‘unbelievably fast speeds.’ That’s what a hyperlocal platform’s ‘automatic instant delivery’ feature does for the customer. The moment he has clicked to order a product, it is all lightning fast. Astounding delivery times! No?

Suppose you are one of the hyperlocal start-ups in your area. You connect with your customers through a mobile application. Unlike an e-commerce application where customers shop for things with an expectedly long one-week delivery margin, the hyperlocal delivery model is about speed and quality. For instance, you get an update that a customer in a nearby geographical area wants fresh whipped cream to bake a birthday cake. Being connected with the local dairies and food chains, you instantly order a fresh cream pick up through your driver app and alert your delivery man. And within 30 minutes the customer gets the fresh cream and reviews your service.

Not just this, but what’s more interesting about the hyperlocal model is the fact that using digital platforms makes it increasingly convenient for the customers to monitor the entire process and keep track of deliveries in real-time.

A hyperlocal business model usually has the following features-

• It is a keen-eyed and personalised business that focuses on the needs of geographically local consumers.
• It targets a specific area with a high demand for goods and services.
• The entire model is so developed that it caters to the well-defined needs of people in an effective and efficient way using modern techniques viz a viz artificial intelligence, drone deliveries, etc.
• The unique selling proposition of this business model is its ability to get good quality products and services delivered at people’s doorsteps at unbelievably fast speeds.

Technologies such as GPS (Global Positioning System) and mobile applications and the widespread use of social media have played a prominent role in accelerating the pace of hyperlocal ecommerce. The entire hyperlocal model has been so well received by businesses and customers alike, that they are liking every aspect of it.

5. How Does A Hyperlocal Delivery Model Work?

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A hyperlocal model is a series of interrelated activities. A hyperlocal delivery model is usually said to be adhered to when the following sequence of events happen.

1. The customer places an order of a product that he wants to buy.
2. The hyperlocal business receives the order and informs the offering and delivery partners.
3. The offering partner then gets the product ready.
4. The delivery partner picks the ordered product from the offering partner.
5. They finally get it delivered to the customer’s specified location.

Suppose, a customer places an order for a required food item through the hyperlocal on-demand food delivery platform. The platform receives that order and passes on the details to the offering partner (local store) and the delivery partner (delivery person). The delivery partner then picks up the required food item from the local business and delivers it to the customer’s specified location.

6. Major Partner In A Hyperlocal Ecommerce Business

As discussed above, the key and forefront players are the ‘merchant and delivery partners.’ Besides them, a hyperlocal company may also join hands with ‘map API providers’ and ‘payment processors’ for smooth functioning of a business. Let us know about them briefly.

• Merchant Partners

They are the vendors, local store owners, manufacturers, wholesalers and retailers who are ready to cater to the needs and ordering demands of the customers. The hyperlocal business procures goods and products from such partners.

• Delivery Partners

They are the delivery persons who work as partners for the hyperlocal platform. Such delivery partners can decide their own working hours.

• Map API Providers

Companies like google provide map APIs to hyperlocal businesses in order to assist their live order tracking- a feature which is fundamental for hyperlocal platforms. Such map APIs help track the location of the delivery personnel and also show the whereabouts of their order.

• Payment Processors

Haven’t you come across the options of payment gateways while placing an online order? That’s payment processors working for you. Payment gateways help in keeping track of all the customer payments and ensure smooth order processing. Payment gateways like Stripe, PayPal, etc., provide such services to hyperlocal platforms.

7. Benefits Associated With A Hyperlocal Delivery Model

The biggest merit associated with a hyperlocal delivery model is that the platform efficiently and uninterruptedly drives the entire process and earns a commission for the role it plays and the local stores and vendors get amplified visibility and improved delivery services in the process.

Apart from this, there are several other benefits that businesses and customers enjoy.

• Benefits for Businesses

• A hyperlocal delivery model is cheap to adopt and it brings reduced costs for the business.
• It is generally free from human errors as the entire model is highly specialized and automated, by virtue of having a hyperlocal marketplace software at its back.
• By being naturally efficient, the model saves a business’s time and efforts to a great extent.
• Businesses can easily track the deliveries by obtaining real time information on the driver’s whereabouts. The advanced GPS tracker inbuilt into the software allows access to each driver’s location.
• Businesses, through a hyperlocal model, can have increased customer engagement and communication. Because more and more customers are using hyperlocal platforms, businesses can reach out to a large number of them.
• Customer relationship is also strengthened for businesses. This leads to increased customer loyalty.

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• Benefits for Customers

• A hyperlocal delivery platform eliminates the need to visit a store to get the product. It provides customers a virtual and an in-store shopping experience as they choose the products online at their own convenience at affordable rates.
• Such platforms give an opportunity to pick products that are sold by multiple hyperlocal business owners all at once.
• It gives customers the option to pay for their products and services through multiple payment methods. Hyperlocal platforms have an inbuilt support for various payment gateways.
• With hyperlocal ecommerce spaces, customers can look, touch, feel and try the product at the nearby retail store if they wish to.
• It provides customers with doorstep delivery solutions and ensures a lightning-fast delivery for them.
• It provides customers with a forum to have their say and resolve their grievances promptly, thereby giving them a smooth shopping experience.
• Moreover, hyperlocal ecommerce businesses also offer huge discounts and sales which makes customers choose hyperlocal ecommerce over other traditional shopping methods.

Hyperlocal ecommerce focuses on the delivery, quality, and variety of products and caters to the needs of the consumers. From the business perspective, investing in hyperlocal ecommerce markets helps brands add value to their image in the market and increase their customer base. It also enables them to enhance their services and run their operations seamlessly along with fulfilling the customer’s needs and preferences.

8. Wrapping Up

Taking into account the hyperlocal delivery model and the benefits that arise out of it for businesses and customers, it can be asserted that hyperlocal ecommerce businesses have left many traditional ecommerce businesses behind and have rendered once-used-to-be-efficient business processes as obsolete. As against the traditional ecommerce deliveries, consumers are preferring hyperlocal ecommerce because it is unbelievably quick and convenient.

There is no doubt about the fact that hyperlocal ecommerce has paved the way for innovation and infusion of technology in business processes (say artificial intelligence, robotics, drone deliveries, use of crypto tokens as payments, etc.) and hence has made the overall shopping experience swift, convenient and flexible for the customers. It works 24*7 aimed at providing a high-end shopping experience to the consumers.

Hyperlocal ecommerce is a flexible and an accepted concept and the impact of hyperlocal model has not been contained to any specific industry. Be it food delivery, grocery delivery, home essentials, medical supplies, couriers or logistics, etc, all have been impacted to a considerable degree.

While there may be certain apprehensions in the minds of vendors/sellers about the hyperlocal delivery model, but the matter of fact is that the hyperlocal ecommerce has revolutionized the way business is done. From accepting orders to getting swift deliveries done, it is all highly technology-intensive in the hyperlocal space.

What’s more? Gauging from the way it is moving and the pace it is accelerating at, it is near about witnessing a boom and appears unstoppable. It seems that in the times to arrive it will contribute even more significantly to the growth of retail and the ecommerce industry. Owing to its approach of providing the customers with an enhanced shopping experience, its acceptance by businesses will surely and naturally witness a surge in the times ahead.

Hyperlocal businesses are slowly but steadily growing in the global market. They provide valuable and cost-effective solutions to the needs that could not be fulfilled by brick-and-mortar businesses earlier. They have become a convenient resort for people to buy what they need at their doorstep without making any extra effort or travelling long distances.

This asserts that the future of hyperlocal businesses is filled with vast opportunities and businesses, to a significant extent are prepared for revolution. It is just a matter of time before hyperlocal business models replace the traditional ways to buy things completely.

Amidst all the business growth, expected developments and the hyperlocal revolution that is happening around, the question is-

Is your business ready to be a part of the hyperlocal revolution that is up for grabs?

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