E-commerce has taken the world by storm, changing the way we shop. The e-commerce industry is projected to cross $16 billion in revenue by the end of 2015, according to a recent study by Assocham and Deloitte. The industry has been growing phenomenally in the recent years and this is where a new breed of start-up firms have come out as probable game changers by promising quicker delivery and higher credibility.
This new concept known as the ‘hyperlocal model’ is changing the consumers’ behavioural pattern and at the same time attracting significant investments from venture capitalists.
Tracking the rise
1900-1950: The first 50 years from 1900 to 1950 were dominated by manufactures and producers. The customers had relatively limited choices and the distribution mechanism was still developing. The demand-supply scenario was skewed with less supply and more of demand. The manufacturers had an upper hand in this era. Post the World War2, the infrastructure improved and it became easier to transport goods from one part of the world to another in a cost-efficient manner. The improved infrastructure coupled with increased manufacturing led to a power shift from manufactures to retailers.
1950-2000: The late 1950s to 2000 saw the advent of large and specialized “big box” retailers such as Walmart, Kmart, Target et al. This era was dominated by sellers that faced several challenges due to limited shelf space in the stores.
2000-2050: With the worldwide prevalence of Internet and eCommerce post the 1990s, shelf space in stores became elastic. Technically an eCommerce site has infinite space and can rack up millions of Stock Keeping Units (SKUs) digitally and subsequent inventories in their warehouses. With information being readily available on a handheld device, the era that we are living is being dominated by the consumers. The next 50-100 years also will be driven by consumers.
So what is ‘Hyperlocal’?
The Hyperlocal model simply requires assimilating all possible service providers from the local vicinity onto the available platforms and facilitating the customers to get instant access to the ones in their vicinity, as and when required. Whether you want to order milk, vegetables, grocery, stationery, or get your laptop repaired, laundry dry cleaned, suit altered or microwave repaired, you can easily get it done with a tap on your phone.
In case of online grocery shopping, there is generally a time-window in which the order can often be rescheduled, so if one cannot make it home in time to receive an order, there is peace of mind in the knowledge that the order would still be delivered at a more convenient time. Moreover, in comparison to the brick and mortar grocery shops, e-grocery websites have the additional advantage of quick interfacing time. One does not have to drive to a grocery store and browse through endless shelves of grocery products just to find a required item; it gets easily done within a few minutes through a mobile app or a website.
E-grocers on their part have the added advantage of increased outreach and better inventories. While a particular item might not be available at the local grocery shop, it is often available at the grocer’s portal through their inventory back-linking.
Hyperlocal– A win-win situation
Besides convenience, consumers get to enjoy more benefits with hyperlocal sellers including greater customization of products, exact delivery times, and negligible shipping charges. Hyperlocal firms can greatly modify their off-the-shelf products and service offerings, based on local preferences and tastes.
They can even capitalize on their advantage and create a long-term relationship with their target customers. No wonder then Hyperlocal will make lives easier for customers by offering a host of benefits.
On their part, the sellers foresee greater revenues through increased business volumes and better customer loyalty due to a professional, organized channel of retail. This can create a truly sustainable business proposition for them. There is no denying that this rapidly growing convenience-oriented segment has a great scope.
The next few years will witness a number of players emerging in this space and those who will find the right niche to operate in. They will tie up with the most efficient local partners in order to deliver seamless services. They will grab a permanent spot in the minds and smart devices of consumers. A seamless integration across online and offline channels where an order can be placed using a combination of mobile app, website or walking in to an offline store is the next trend that will define customer experience.
Businesses that can drive this interesting matrix to their advantage will prove to be the long distance runners in the race towards profitable sustainability.
About the author: Mukesh Singh is a Founder and CEO of ZopNow.com, an online grocery store, which deliver groceries from hypermarkets such as HyperCity and More instead of maintaining its own warehouses.