1. Overview of Hyperlocal Delivery Model and How it Works
Hyperlocal delivery has been the buzzword in the eCommerce shipping and hyperlocal logistics industry. Hyperlocal delivery is an extremely in-demand logistics service that delivers orders within a limited geographical location. The popularity of hyperlocal delivery as a logistics service has grown astoundingly during the Covid-19 pandemic when entire states and nations went into lockdown.
Hyperlocal delivery is a relatively new term in the commerce industry but it started somewhere in the mid-2000s with the advent of food delivery apps like Zomato. Hyperlocal delivery has been further popularized in recent years by many more food, pharmaceutical, and grocery delivery apps like Grofers, Big Basket, Swiggy, Dunzo.
The eCommerce ecosystem has only recently started adopting hyperlocal delivery methods to its universe. Hyperlocal delivery helps eCommerce companies reach their customers within a very short time. Since what customers want most out of their delivery experience is swift and hassle-free delivery, hyperlocal delivery is fast becoming a popular choice for many eCommerce companies. The scope of hyperlocal delivery is immense but its execution requires technical expertise, automated shipping processes, and assistance of eCommerce logistics software.
In today’s article, we will discuss at length what hyperlocal delivery is, how this business model works, what are the benefits of hyperlocal delivery, and finally, how to build a hyperlocal delivery business model.
2. What is Hyperlocal Delivery and How Does it Work?
Hyperlocal delivery is a logistics service that provides order fulfillment within a specific geographical location. The specific delivery ambit may vary from a few kilometers to a few hundred kilometers but one thing that remains the same throughout all hyperlocal delivery services is the source of the order or goods.
In hyperlocal delivery, e-commerce companies or online retailers make use of the available inventory at local stores to deliver orders faster to their customers. In the hyperlocal delivery model, eCommerce businesses create partnerships with local vendors so that as soon as an order is placed, it can be fulfilled immediately by a local store near the customer’s location.
The hyperlocal delivery model is being used by groceries, pharmaceuticals, food, personal care services, household services, and much more. It provides visibility to local store owners and turns local stores into strategically placed warehouses for eCommerce businesses.
The increasing popularity of hyperlocal delivery is due to its ability to provide order delivery at extremely fast speeds. Amazon Prime has normalized fast delivery for all online shoppers but hyperlocal delivery goes a step ahead by providing lightning-fast deliveries that can take as little as an hour to reach your customers.
3. Top 7 Benefits of the Hyperlocal Delivery Business Model in Ecommerce?
The hyperlocal delivery model offers many advantages to online retailers. Of course, providing faster deliveries compared to any other eCommerce model is the topmost benefit of hyperlocal delivery service. But even apart from that, there are several other factors that contribute to hyperlocal delivery’s growing popularity.
In this changing eCommerce scenario, hyperlocal delivery is quickly becoming a must-have service for many eCommerce companies. Let’s take a look at the ways in which eCommerce companies can benefit by providing hyperlocal delivery services to their customers.
3.1) Improved Customer Experience Post Purchase
Providing faster deliveries is quickly becoming the need of the hour with most customers expecting same-day or next-day deliveries on all their orders. Quick order fulfillment is one of the most surefire ways of giving your customers an excellent post-purchase experience. With hyperlocal delivery services, your customers will always be happy with their orders.
3.2) Visibility for Local Stores
In hyperlocal delivery, eCommerce companies partner with local vendors to source the freshest and most recent stock for their orders. As a result, it brings the traditional brick-and-mortar stores back into people’s notice. Look around your local stores. Any or all of those stores might be functioning as hyperlocal delivery partners for your favorite eCommerce store.
3.3) Minimal Efforts for Online Retailers
In the hyperlocal delivery model, online retailers do not have to worry about storing inventory, planning delivery mechanisms, arranging delivery vehicles, or even spending on transportation. All of these small nitty-gritty details are taken care of by the local vendor themselves.
In hyperlocal delivery, the local shops act as storage units. Therefore, the ecommerce company itself doesn’t have to worry about stock-keeping. Therefore, the hyperlocal delivery model requires minimal efforts from the online retailer.
3.4) Lower Logistics Costs
One of the biggest advantages of hyperlocal delivery is that it saves eCommerce companies big bucks on shipping expenses. No more do orders have to be transported all the way back from the central warehouse hundreds of miles away. With hyperlocal delivery, orders can be delivered to the customer right from their own vicinity. Goodbye, huge transport vehicles, fuel costs, and long transit durations.
3.5) Live Order Tracking
Hyperlocal delivery like all other e-commerce deliveries makes real-time order tracking a priority. Most hyperlocal delivery services provide customers the option to track their orders via an app on their mobile phones. Customers can track their orders, talk to the driver in case of any special requests, or enquire about delays in transit.
3.6) Lightning Fast Delivery
The biggest benefit of a hyperlocal delivery business model is that it provides order delivery at unthinkable speeds. Hyperlocal delivery is the future of eCommerce shipping. As eCommerce grows and consumers demand more and more from their shipping experience, eCommerce companies, and logistics providers will have to look towards fulfilling orders hyper-locally.
3.7) Lower Chances of Damage or Breakage
Hyperlocal shipping does not require e-commerce companies to send their wares all the way from a central hub. Products can be shipped directly from a local store to the customer’s location. This process gets rid of the entire lengthy shipping process that happens in a delivery fleet. Lower time spent in transit equals lesser chances of items getting damaged. This is another way hyperlocal delivery enhances customer satisfaction and the overall shipping experience.
4. How to Build a Hyperlocal Delivery Service for eCommerce Customers?
The Covid pandemic has shifted consumer buying behavior. Even people who were previously wary of using eCommerce platforms have become accustomed to buying things online. The pandemic has also raised consumer expectations with regards to delivery times. Food, grocery, and pharmaceutical eCommerce companies have delivered orders on an emergency basis.
This trend has made eCommerce companies belonging to other different niches take notice. As a result, several online retailers have realised the bright future of hyperlocal delivery and want to build a tailor-made hyperlocal delivery service for the maximum post-purchase customer engagement.
Below, we have listed the ways in which every eCommerce company can potentially offer extensive hyperlocal delivery services to its customers. Let’s read on!
5. Top 7 Ways to Build an Extensive Hyperlocal Delivery Service for Online Shoppers
5.1) Choose the Product You Want to Sell in a Hyperlocal Delivery Business Model
This is the first step of every business. If you already have an up and running business that only wants to shift its focus towards hyperlocal delivery, you can safely skip this point. For ecommerce startups or online retailers still new in the ecommerce industry, we suggest deciding what you want to sell in the hyperlocal delivery market.
Ideally, hyperlocal delivery should work for every kind of ecommerce business. However, currently, most businesses providing hyperlocal delivery services include salon/spa services, home installations, household cleaning and repairs, food delivery, medicine delivery, and grocery delivery. You may or may not want to provide these services. But whatever you do, be specific about what you want to be known for.
5.2) Allocate Serviceable Locations
Next comes allocating serviceable locations for your business. This means, choosing the specific geographical area/location your business will be delivering to. This step is crucial for the success of any hyperlocal delivery business.
When selecting a location always look at your consumer stats and see where most of your orders come from. That figure should tell you where your target audience lives. Then comes the easier step. All you want to do now is zero in on that location, decide your perimeters and tie up with as many local stores of that area as possible.
5.3) Select Local Stores Based on Inventory and Build Partnerships
A criterion that all online retailers should keep in mind when partnering with local stores is the kind and quality of their inventory. In a hyperlocal delivery business model, local stores that an eCommerce store ties up with act as local warehouses for the company.
Therefore, it’s essential for the eCommerce company to determine the kind and quality of products available at the local vendor because all of its sales, revenue, and success depends on the kind of items it sends to its customers. If the local vendor you partner with sells low-quality items, your customers will not be happy in spite of the fast delivery.
5.4) Identify Your Target Audience and Market Your Products
Once you have proposed a partnership with a local vendor, it’s time to think about targeting your audience. For already operational eCommerce companies, this is a fairly simple step because they already have the data on where their customers are located. Identifying your target audience is critical to providing the best delivery experience for your customers.
After partnering with your local store, an ecommerce retailer should catalog all of the store’s inventory on their own mobile app for easy displaying to customers. Management of inventory including timely replenishments is essential to keep stocks fresh and provide deliveries as soon as an order is placed.
5.5) Choose a Mode of Delivery
In hyperlocal delivery, orders are fulfilled by local vendors. How an order gets delivered is a decision to be made by the ecommerce company. In some cases, companies hire hyperlocal delivery logistics providers to pick orders from the local store and deliver to customer addresses. On the other hand, some online retailers choose to get the order delivered by the staff of the local store itself. Which of the above modes of delivery do you choose is a decision to be made by both the online retailer and local vendor.
5.6) Decide on Payment Options
Before you start accepting hyperlocal delivery orders, it’s a good idea to straighten out the types of payment gateways you are willing to offer to your customers. Consumers today want as many options as possible and it stands true for payment options as well. Lack of sufficient payment options has led many customers to abandon their fully-loaded carts at the checkout window. To tackle this problem, hyperlocal delivery businesses should provide as many payment options as possible.
Of course, the kind of payment options an ecommerce retailer offers depends entirely on its ability to handle those specific types of transactions. If your ecommerce business can handle multiple payment gateways, we suggest you offer all of those options to your customers from the start. This can include - bank transfers, credit and debit card payments, UPIs, PayPal, RazorPay, e-wallets, or any other online modes of payment.
5.7) Develop a Mobile App for Receiving and Managing Hyperlocal Orders
Anyone in the eCommerce industry knows that most of today’s customers order products online with the help of their mobile apps. Therefore, it’s of utmost importance that a hyperlocal delivery business develops an easy-to-use mobile app for its customers.
Developing a mobile app downloadable on both android and iOS devices will give customers the opportunity to track their orders in real-time, place orders on the go, and also complete payments. For eCommerce companies, a mobile app will guarantee easy order and inventory management. Hence, a mobile app with first-class features like order tracking, order placement, and management is a must for hyperlocal delivery companies.
6) What is the Future of Hyperlocal Delivery in Ecommerce?
As hyperlocal logistics technology evolves with the advancement in blockchain, big data, A.I., and machine learning, shipping services like hyperlocal delivery and omnichannel fulfillment will become the norm. Hyperlocal delivery provides customers a shopping experience where traditional brick-and-mortar stores and new-age ecommerce stores come together to fulfill orders.
A hyperlocal delivery experience gives customers the convenience of shopping from an online site with numerous options and juxtaposes it with the comfort and warmth associated with traditional offline stores. Moreover, hyperlocal delivery can reach customers in remote regions where big ecommerce companies or brands do not deliver.
Ecommerce marketplaces and online stores can leverage the hyperlocal delivery model to tie up with local partners and deliver to previously unserviceable regions. Another reason hyperlocal delivery is being provided by more and more online retailers is that it reduces the need for big warehouses and transportation vehicles. Ecommerce stores that offer hyperlocal deliveries can easily source fresh products from nearby local stores and replenish stocks if and when needed, instead of stocking up their warehouses.
Management of such a huge warehouse and the inventory within also requires the hiring of a substantial workforce. The use of huge transport vehicles can also be minimised with hyperlocal delivery. And by doing that, ecommerce companies automatically reduce their cost of shipping expenses. And lastly, hyperlocal delivery is only going to increase in proportions because it gets rid of several shipping middlemen by automating a lot of the shipping processes.
7. Final Conclusion
In summation, all we want to say is that hyperlocal delivery is applicable for ecommerce companies in every niche. The way hyperlocal delivery works is beneficial for every ecommerce company and hyperlocal delivery is a shipping service that every online retailer should seriously consider. Having their orders delivered to them at the earliest possible time will increase customer satisfaction and make them loyal customers.
If you want to offer hyperlocal delivery to your customers, now is the best time to do so. With so many changes happening in the ecommerce ecosystem and rapidly changing customer expectations, providing faster deliveries will help you gain repeat customers.
But before you start offering hyperlocal delivery services, whether through your in-house logistics team or with the help of a third-party logistics company (3PL), it’s important you know everything about the hyperlocal delivery model and how it works.
We hope this article will help you to understand what hyperlocal delivery is, how hyperlocal delivery works, how hyperlocal delivery benefits ecommerce companies and how to build infrastructure to provide hyperlocal delivery. We wish you all the best in your future endeavors.