Soham is the Co-Founder and CEO at Shipsy, building a connected platform to make global trade more efficient. After graduating from IIT Madras and working at Deutsche Bank, Soham started off Shipsy in mid-2015. Soham is leading the brand by helping the largest of companies answer the question “How can you reduce logistics costs” and “What can you do to improve customer retention through a better delivery experience”. Growing team of 100+ with offices in Gurgaon and Mumbai, always looking to onboard talented individuals to grow with us in this journey.
The current landscape of the on-demand delivery industry is broadly divided into two segments. First, caters to the people who prioritize the price of the commodity and care less about convenience. Basically, they are okay waiting for a longer duration for the product to arrive. The second, however, is convenience-centric customers who are willing to shell out more money to get the product faster.
Now the question arises, can we standardize ‘fast?’ If we look closely, savvy companies are rapidly redefining the term since it is increasingly becoming critical to business sustenance. As much as 41% of online shoppers see faster/reliable delivery as important, 84% of shoppers will leave a brand after just one poor delivery experience. It is the latter that is ushering brands to explore the quick commerce space.
Why Quick Commerce is a Big Deal?
Stemming out of the need for instant gratification, quick commerce or Q-commerce is touted to be the next generation of on-demand delivery that is fulfilled within 45 minutes. According to Redseer, the segment will grow by 10-15x in the next few years to become a USD 5 billion market by 2025. Even logistics providers are reaping the benefits of this billion-dollar market. Logistics company Shadowfax has reported a 500% jump year-on-year this month in quick commerce deliveries. Surely, the market is unmissable and the drive to harness its potential is contagious.
In fact, this is one of the prime reasons we are seeing a sudden influx of brands entering the instant delivery ecosystem. The existing ones such as Blinkit (formerly Grofers), and Swiggy’s Instamart are continually striving to shrink their order fulfillment windows to capture the larger share of the pie. Having a thick network of dark stores and partnering with local stores is allowing brands to service under 45 minutes. This is one of the magic tricks but that’s not all. There’s more up the sleeve.
The sector has seen new entrants such as Zepto, who is taking the entire Q-commerce segment by storm, surprising every player with their rapid rise and operational prowess. After all, adhering to a 10-minute delivery promise is no small feat. So how can technology empower brands to abide by the rapidly shrinking delivery windows? Here’s how.
The Technological Support In Delivering Faster
Q-commerce players can leverage logistics management tools to expedite order fulfillment. The success of the 10-minute delivery model depends on how fast a system pushes an order for processing, delegates tasks, and executes delivery. Hence, a highly configurable and scalable system is a prerequisite.
Local Stores Can Extend Real-Time Inventory Visibility
Sourcing inventory from local Kirana stores or neighborhood shops is one of the best steps forward to meet the 10-minute delivery expectations. The only challenge in realizing the full potential of this model is the lack of inventory visibility. Delivery aggregators need to provide consumers and other delivery stakeholders with complete visibility of their available inventory. For instance, Accenture predicts that by 2023, more than 50% of all eCommerce purchases in the US will be delivered through local inventory—and that number could easily be 70%.
Automation Can Be The Decisive Force Driving Quick Commerce
Manual processes are time-consuming and increase delivery turnaround times. Going forward, brands will have to replace manually-driven dispatch with automated processes to facilitate faster deliveries. Automation can help brands set and delegate delivery tasks to drivers based on delivery type, proximity from store and customer, current order volumes, rider workload, and so on. Modern logistics management tools can drive a net allocation rate of 99.7%.
Need To Leverage Sustainable Delivery Models
The 10-minute delivery model is bound to influence trip volumes. This will directly impact a brand’s carbon footprint. Brands will have to leverage technologies that empower them to reduce the distance traveled, optimize vehicle capacity, and leverage eco-friendly delivery modes to ensure less than 45 minutes delivery windows.
Optimize Routes To Reach Customers Faster
Dynamic route planners can chart out the shortest route to the customer location to meet the 10-minute delivery promise. En route order clubbing allows drivers to pick up more orders on the fly. This empowers brands to reduce trip volumes while boosting overall delivery productivity.
As we move ahead it will be interesting to see how brands will further battle out the instant delivery landscape. This will also pave the way for further innovation and disruption for technology platforms. We can anticipate an exciting road ahead.