Understanding the Demand for Quick Commerce

The eCommerce landscape has changed to meet the needs of customers. Potential stakeholders are now worried about how to react to sudden changes in supply and demand. Ad-hoc and last-minute orders must be fulfilled.

The COVID-19 pandemic has made customers prioritize speed and convenience. Quick commerce enters the scene to support the eCommerce clients’ current mentality.

Before the COVID-19 outbreak, a PwC study showed that most consumers worldwide valued efficiency and convenience above all else. In the US, 80% of respondents believed they were essential to a satisfying customer experience.

The demand for speed and convenience is typically fueled by four factors: busy lifestyles, smaller homes, urbanization, and aging populations.

Nowadays, customers are less likely to walk into a store because of the prevalence of remote working. The delivery of goods in a convenient manner is more popular than ever.

According to the OECD, the pandemic caused 21% of US consumers to order groceries online from a nearby retailer. Notably, 19% of those over 65 adopted new behaviors and technology while buying goods online. And this pattern persisted into 2022, when the number of online grocery delivery rose 37% year on year.

Quick commerce (also referred to as q-commerce) is considered to be the next generation of eCommerce. As the name implies, it is all about speed.

Online ordering in traditional eCommerce transformed the delivery landscape. Today, customers can expect their items to be delivered typically between 3 and 5 business days. Merchants often give incentives for larger orders, such as discounts and free delivery fees.

When and whenever customers need small products, Q-commerce delivers them nearly immediately. Q-commerce compliments when you need a specific set of things conveniently and quickly rather than replacing a weekly grocery run.

Quick commerce typically concentrates on micro to smaller amounts of commodities, such as groceries, stationery, and over-the-counter medications. The focus of sellers has now changed from conventional warehouses on the outskirts of a metropolis to micro-warehouses closer to the delivery site.

Q-commerce mixes traditional eCommerce benefits with cutting-edge last-mile delivery advancements. The key difference is in the speed of delivery, with the basic premise remaining virtually unchanged. For delivery to be competitive, it must take 30 minutes or less rather than days.

As a result, people may now order a wider variety of items, with perishables like groceries filling a sizable market niche for Q-commerce businesses. It usually focuses on smaller amounts of fewer things, or the micro. For instance, a dish already underway requires a missing ingredient immediately.

The larger, less obvious changes happen behind the scenes.

Every eCommerce company operates differently, but many rely on “dark stores.” These are strategically placed warehouses optimized to deliver orders quickly to customers’ doorsteps. 

Many also use crowdsourced labor, giving businesses access to a pool of people prepared to take action at any time. 

These elements work with other tools, such as warehouse management software and the design of dark stores themselves. It’ll provide customers with the agility and flexibility needed to respond to their demands around the clock skillfully.

Characteristics of Quick Commerce

The main emphasis of quick commerce is to provide services for micro and smaller amounts of light-weighted goods. As mentioned, this can range from regular shopping to pharmacy needs. The change from fully stocked huge warehouses to nearby micro-warehouses has made consumers focus more on their online purchasing behavior.

Q-commerce companies rely on micro-fulfillment centers (MFCs), which typically only have a capacity for 2,000–4,000 SKUs (total SKU count for all brands within the MFCs) of fast-moving merchandise. Therefore, not every brand or product type is suitable for micro-fulfillment. Bulky products and slow-moving goods are not desirable under the quick commerce model due to space constraints in MFCs.

Focus on High Demand Goods

The most popular products are the only ones Q-commerce entrepreneurs will keep in stock. This differs from the common strategy of maintaining a complete inventory of all possible products. These consist of crucial grocery items and other goods that clients purchase more frequently, if not daily.

With this tactic, you can rent smaller storage within cities. The lower volume of goods can circumvent using larger warehouses outside further away. This lowers warehouse and storage costs.

Micro-warehousing

The “micro-warehouse strategy” is common among Q-commerce merchants. They choose high-density neighborhoods in cities with a significant internet presence. Businesses will then rent, lease, or purchase micro-warehouses called “cloud stores” or “dark stores.”

These cloud shops are fulfillment facilities with well-planned SKU management methods in the city’s center. This is for easy pick-up and quick delivery by delivery partners or staff.

This way, Q-commerce businesses can reduce the time and money they spend traveling to and from remote warehouses. Shorter routes directly lead to faster deliveries.

Optimized Deliveries

The q-commerce businesses frequently work with small-scale delivery partners to cover particular routes. They can even categorize the zones within a city according to how many deliveries must be made there. 

This ensures that each zone receives an adequate number of last-mile delivery partners based on the volume of deliveries. These delivery companies are usually tracked using GPS technology.  They can also be rewarded for making timely deliveries.

Furthermore, many businesses even distribute multiple delivery orders to the delivery partner according to the location and distance of the goods. As a result, deliveries take less time, and each delivery person isn’t forced to go back and forth to the dark store.

Distinct Pricing Model

The quick commerce business model includes higher costs compared to traditional eCommerce companies, This is because the last-mile delivery system comes as an additional cost that the q-commerce companies need to cover.

Hence, most such merchants charge a nominal delivery fee to their customers. With a base fee, additional charges will vary according to the order value and distance from the cloud store.

Advantages of a Quick Commerce Business Model

While ultra-fast service is an obvious benefit to customers, quick commerce also has several benefits for firms that use it. Q-commerce does not intend to take the place of your large supermarket. Instead, it aspires to become the largest convenience shop in the city.

Exceptional Delivery Speed  

Businesses that use Q-commerce can deliver their products to clients much faster than those that use traditional eCommerce. This results in greater consumer satisfaction and can provide a significant return on investment. 

This is because of the previously mentioned hyper-local MFCs scattered throughout highly populated cities and placed close to those placing orders. Accordingly, orders can be filled 25% faster than with traditional in-store fulfillment.

Reliability & Accesibility

Not only is faster delivery available, but there is a higher chance that the item will be in stock. Inventory management software aids in real-time inventory adjustment and demand monitoring. In response, businesses can ensure that goods are delivered according to demand patterns identified by intelligent software.

Delivery couriers have access to cutting-edge technology that enables them to offer excellent customer care. Deliveries are made on schedule, which in turn positively affects customer satisfaction.

Superior Customer Experience

Quick commerce can assist online retailers in meeting and surpassing consumer expectations. This will encourage brand loyalty as a result.

Quick commerce consistently tackles client pain points in a meaningful way. It can help a party host replenish a buffet table that has run out of food. Quick commerce can also help a forgetful parent who needs to get a birthday present for their child. It might be life-saving for someone sick who is stuck at home and needs to stock up on some supplies.

A trustworthy relationship with your customers can lead to greater retention, generating greater business profits.

Easy Expansion

Q-commerce presents a chance for market expansion by establishing cloud stores in several cities or countries. Furthermore, it’ll allow companies to expand their business models to include various other services. That’s on top of the delivery of a curated selection of goods.

Startups can accomplish this level of growth considerably faster. How? By outsourcing delivery operations and growing their own business at the same time.

Given current retail patterns, the enormous interest in quick commerce from retail and consumer brands is not surprising. Businesses that want to adapt to meet rising customer demands for rapid delivery now have various strategies to choose from. Decisive investments in quick commerce solutions can provide impressive client acquisition and retention returns.

Testing it out isn’t a sizeable investment, even though it can be challenging to determine whether it’s appropriate for your company. You may roll it out in one location at a time, working out the kinks in the system. You can evaluate the outcomes and modify your approach to the circumstances.

ZhenHub helps your eCommerce business get started with quick commerce strategies. Our global warehousing partners bring your products closer to your customers. We also offer cost-efficient, trackable shipping services. Sign-up at our website for free and get access to our digital dashboard.