As consumers’ shopping expectations and preferences change, the retail industry also transforms. With consumers now looking for options that can help them achieve instant gratification, retailers can’t afford to make them wait. Hence, retailers must be able to implement such models wherein a quick yet intuitive experience to customers is delivered, both in physical and online stores in order to retain their loyalty.
Delivering goods and services from consumers’ local areas directly to their doorsteps via hyperlocal commerce is one of them. Many hyperlocal retailers have mushroomed lately like Grofers, Zopper, BigBasket, Instacart, HonestBee, Din, Gastrofy, and PepperTap.
Hyperlocal is the next frontier for ecommerce companies to bring massive scale and deliver goods instantly. Needless to say, then, competition is tough and businesses entering the market need to gear themselves to become the long-distance runners in the world of ecommerce.
Mistakes Hyperlocal Commerce Startups Make
Today, in the ecommerce segment of retail, hyperlocal commerce seems the most successful contender for success. With the marriage of the convenience of online shopping with the trust of local retail shops, the hyperlocal market offers the consumers the best of both worlds. This has paved the way for many hyperlocal startups, which are also the latest attraction for investors.
However, the industry is new and challenging, as well. With a cut-throat competition building up, the deeper you dig, the bigger the problem seems to be. If you are planning to build a hyperlocal commerce startup, you must avoid the following five mistakes:
Mistake #1: Entering the Market Without Focused Services or Product Offerings
The scope of the hyperlocal marketplace is increasing. There are countless players emerging in the space, along with giant e-commerce players jumping into the fray by investing in mergers and acquisitions. To stand out from the crowd, finding a suitable and appropriate niche in the market is the key to sustainability.
For example, Sweden-based Gastrofy is focused on delivering the supplies the users need to stick to a healthy diet. Additionally, it also allows subscribers to follow their favorite chefs to gain inspiration for their own cooking.
Mistake #2: Poor Last-Mile Delivery Process
The very win-win point of the hyperlocal model in ecommerce is its quickness in delivering products to the users. But, generally, the last-mile delivery process takes time and is a cumbersome and costly leg of the supply chain.
Because of this, hyperlocal businesses have to rely upon logistics companies in order to provide much-needed delivery services in a short time. The last-mile delivery process is witnessing quite a few innovations these days like a flexible sign-in, sign-out model to balance demand and supply of delivery boys; real-time GPS tracking; and others.
For example, Gurgaon-based Grofers, one of the most well-capitalized hyperlocal startups, started as a logistics company before serving end customers by sourcing products through neighborhood stores. The company now works with a number of logistics startups, like Townrush and SpoonJoy, to fulfill its orders.
Mistake #3: Operating via a Single Touchpoint Only
As per McKinsey, brands with more digital touchpoints are more likely to be selected by consumers. For hyperlocal startups, as well, seamless integration across online and offline channels where an order can be placed using a combination of website, mobile browser, or mobile app through a local retailer will be the next big trend that will define customer experience.
For example, Instacart is active in many cities across the United States. On Instacart, customers can order either through an app or on a website and the company promises delivery of groceries within an hour.
Mistake #4: Not Building Strong On-Ground Tie-Ups with Local Retailers
One thing a hyperlocal business can’t do without is having a reliable and efficient network of local partners. An efficient and prompt delivery capability is essential to provide quick services to consumers with the least lead time and least cost. When hyperlocal businesses tie-up with a broad and efficient network of local partners, only then, seamless services can be provided to the users.
For example, when Honestbee started its operations in Singapore, it ensured deliveries of everyday essentials within 1 hour. For this, its first step was to tie up with six specialty stores and supermarkets like Redmart and Cold Storage Online, from which they collect groceries as per each customer’s shopping list.
Mistake #5: Less Investment in HR and Marketing Functions
Hyperlocal commerce is still in its nascent stage due to which consumers are still not ready to accept that someone is going to deliver grocery or other daily-use products to their homes. It takes persistent efforts and time to build trust in the consumer.
In the hyperlocal commerce space, this is one of the biggest challenges for startups. Secondly, startups need to take care that the quality of products sent by local retailers is good while maintaining demand and supply in the locality. Thirdly, companies also need to maintain a reliable workforce.
For example, when PepperTap started in India, its primary focus was on hiring skilled personnel for making inroads into the cities it planned to operate. The company also made use of appealing marketing strategies, like introductory offers, along with on-ground activation to attract new customers.
Survival of the Fittest
Challenges apart, there is no denying that the rapidly-growing industry of hyperlocal commerce has exponential scope. Given the immense number of players emerging in this space, it is predicted that consolidation will happen over the next few years. Thus, the phenomenon of ‘survival of the fittest will be the dominant force in the industry that will finally determine the leaders in the hyperlocal commerce space.
There is no disputing the fact, however, that those who avoid the above-mentioned mistakes will be able to deliver seamless services to the consumers and will be able to find a permanent spot in their minds.
