Will Quick Commerce Catch On With 10 - Minute Delivery?

 


Summary

Despite the fact that it has been around for a while, "rapid commerce" – also known as "q-commerce" – took a quantum jump during the pandemic and is expected to reach over $448 billion in sales by 2030. As the decade of 2010-20 advanced, internet businesses continued to reduce delivery times — 24-hour, next-day, and same-day deliveries. And now, thanks to ever-increasing customer demands, groceries in 10 minutes!

Demand breeds competition, and there's enough of that here as well! Only the top few will survive, given that a company must reach a certain level of scale to achieve long-term success...

10-minute delivery – will quick commerce catch on?

Despite the fact that it has been around for a while, "rapid commerce" – also known as "q-commerce" – took a quantum jump during the pandemic and is expected to reach over $448 billion in sales by 2030. As the decade of 2010-20 advanced, internet businesses continued to reduce delivery times — 24-hour, next-day, and same-day deliveries. And now, thanks to ever-increasing customer demands, groceries in 10 minutes!

Demand breeds competition, and there's enough of that here as well! Only the top few will survive, given that a company must reach a certain level of scale to achieve long-term success...

Quick commerce – what is it?

Quick commerce (also known as on-demand delivery, q-commerce) is used to deliver small purchases, typically groceries, to customers within an hour, however, aggregators and online supermarkets are increasingly touting the "10-minute delivery time" as the next big thing.

This is a logical extension of eCommerce, and it has arisen as a result of consumers' ever-increasing needs. Because we live in an age where everything has to get better, faster, and bigger, everything has to keep getting better, quicker, and bigger!

How has a “10-minute delivery” even become possible? : 

Cloud-based services, artificial intelligence, machine learning, GPS-enabled route-optimization software, and improved inventory management procedures via an elaborate network of fulfillment centers (of varied sizes) have allowed businesses to substantially reduce carrying costs and delivery times.

Business models in quick commerce

The grocery sector has always had to contend with thin profit margins, and so does quick commerce. Profit is earned via product margins and delivery fees. While delivery speed remains the most important winnable metric, quick commerce companies also compete on the type of product offerings.

  • Aggregators (delivery firms like Uber Eats) partner with retailers to provide delivery-only services (supermarkets, pharmaceuticals, retailers). These delivery firms fulfill orders placed on their websites (apps and websites).
  • Companies that are vertically integrated own their own inventory and store it in a network of fulfillment centers or dark shops. The closer their merchandise is to their clients, the better their chances are of being successful. By anticipating their clients' needs, these organizations often stock 1,000+ SKUs. While this approach requires significantly more resources (finances, management, technology implementation, and staff) and has higher operating costs, the profit margins are also higher.

What are the parameters of success?

As mentioned earlier, the grocery delivery business, especially the 10-minute delivery model, works on wafer-thin margins.

  • The volume of orders and the number of delivery rides must be properly matched. Predicting peaks and valleys in order of volume, growth through time, and other factors must be considered. A large number of riders sitting idle for long periods of time would reduce profitability, whereas a small number would result in a loss of economic potential. Riders who are subjected to environmental dangers such as traffic and weather must be rewarded proportionately.
  • Delivery workers are typically independent contractors that work for multiple organizations, and unless your pay scales match industry standards, they'll quickly go.
  • Increasing order value ("basket size") is a key KPI since it boosts earnings per order delivered. The importance of cross-selling and upselling cannot be overstated. This is where the design of your app or website comes into play.
  • CAC (customer acquisition cost) and customer churn/retention are critical factors for overall operational costs. This industry is known as a "discount space," and until all of your running costs are minimized, you'll be compelled to close your doors.
  • Customer loyalty is low: Due to the discount-driven business, the most pressing issue is establishing and maintaining consumer loyalty. You must continue to promote your offers and items, but the best deal of the day will most likely win the day! As a result, successful management of this firm requires the use of Artificial Intelligence and Machine Learning. Predicting

Quick commerce – what are its benefits?

Let's have a look at some of the current benefits for both suppliers and consumers:

  • Local firms are able to serve a broader customer base.
  • It provides users with significant convenience by operating 24 hours a day, seven days a week.
  • There is less food waste because consumers tend to order smaller orders that are consumed within a few days. This contributes to the long-term viability of the environment.
Quick commerce – future prospects.

Since the 1990s, quick commerce has grown steadily, if not quickly. The company has a lot going for it, thanks to several essential aspects that go into developing sustainable enterprises, such as consumer demand and an ever-improving supply-side supported by significant technological advancements.


However, not everything is as it seems. As previously stated, the company's profitability is poor. While the majority of today's App-driven businesses in this market are still in their infancy and are attempting to scale as soon as possible, the main question is whether they will be able to survive.

The expectation is that once these companies reach a certain size, they would be able to merge and focus on profitability. However, as opponents point out, reaching scale through a discounted price model is risky since when the discounts run out, so do the purchases. Your customers will move on to the next rival who is currently giving the best deal...

What about social responsibility? 

And this lies the most serious problem with rapid trade. Several segments of society, including consumer groups, social critics, politicians, traffic officials, concerned parents, and responsible citizens themselves, have raised the subject of how crucial it is to have groceries delivered within "10-minutes." Delivery riders, who are already a traffic hazard, would be put under much more strain, exacerbating traffic congestion and putting lives in danger.

While the rapid commerce business would have you believe that 10-minute delivery is "critical" to your life, you must ask yourself if this is true.

Conclusion: 
As can be seen, rapid commerce provides a lot of advantages. However, there is a slew of unresolved issues that threaten to derail it. Time will be the best judge for quick commerce enterprises striving to create a success of this 10-minute delivery model by employing the latest solutions like last-mile delivery software.


Comments

Post a Comment

Popular posts from this blog

What Are Logistics 1PL, 2PL, and 3PL? How Is This Managed By Last-Mile Delivery Solution?

Image
  Summary Our world has become smaller, more hectic, and more demanding due to the globalization of business and our fast-paced way of life. We are in an era where everything needs to be quicker, cheaper, and better. As a result, there is enormous pressure on the logistics and supply chain sector to meet the steadily rising needs of clients and consumers. We no longer accept "out for delivery," which was enough; instead, we want "same-day delivery" and "24-hour delivery." A new generation of logistics solutions has resulted from this, ranging from the conventional one-on-one relationship between the shipper and receiver to the intricate services provided by "10PL" logistics providers. However, many people are still unsure about the precise tasks and responsibilities provided by various logistics providers, as well as their precise location and area of operation in the supply chain. First Party Logistics, or 1PL A business or person who aims to ca...
Read more

Top 10 Delivery App Features

Image
  Summary Today, using apps for everything in our life is a reality. In fact, without utilizing an app for, well, everything, it would be getting harder for us to survive today. The Delivery App, which we use to conveniently have stuff delivered to our home, is a wonderful illustration of this. Every day, we place orders, enter our location information, and watch for the dependable delivery person to arrive at our door. Not only that but we anticipate being updated on its progress in real-time as well! While there are many delivery apps available, it would be wise to make sure you are using the finest one by looking at a few key aspects. Here are the top ten. Modern times are frantic; they are now referred to as the “Digital Era.” The goal of turning digital is to make our lives simpler, faster, and more convenient in every aspect of our lives, whether personal or professional. We continually search for quick fixes at the ease of our fingertips, doorways, and homes — and, all at ch...
Read more

A Fantastic Tool For Improving Last-Mile Delivery Is Driver Score

Image
  Summary Using pre-established measures, you may assess the performance of your drivers using a Driver Scorecard. In order to maintain an effective and motivated team of drivers who positively contribute to managing the crucial Last-Mile Delivery, which is a critical component of producing Customer Satisfaction these days, especially with the advent of e-com businesses and numerous deliveries, it is crucial to define and use accurate and relevant metrics for assessing driver performance. Companies must spend the necessary time, effort, and money building and sustaining a strong team of drivers because doing otherwise would make it impossible for them to build a loyal customer base. A driver scorecard: What is it? Improved delivery times, fewer accidents, fewer violations, lower fuel costs, lower maintenance costs, and fewer part replacements are some of the most frequent improvements that transport managers are constantly looking to make in the performance of their fleet. Notably,...
Read more