Plan, procure, execute, & track transportation for every shipment across your supply chain & logistics operations
A SaaS solution to help grow your business by achieving 100% perfect order execution at high volumes
Increase vehicle capacity utilization and customer promise adherence
Grow your business with omnichannel presence and automated pickups
Consolidate shipments for hub to hub movement across land and air
Real-time customer communications and collect accurate PODs
Orchestrate logistics operations with multiple 3rd party carriers
Achieve cost effective, scalable, sustainable, and customer centric deliveries
Orchestrate all your cross-border logistics operations with ease
Improve address accuracy, ensure first-attempt delivery success, reduce costs and boost customer experience
Gain end-to-end shipment visibility, get proactive alerts, and send customers live tracking links
Grow business in a dynamic world and manage operations across First, Middle & Last mile
Delight customers by seamlessly managing store and online orders across own fleet and 3rd party
Reduce freight costs & get end to end visibility across shipments
Directly Jump To
Oh, what a joy it is to have piping hot pizza delivered to your doorstep when hunger hits you! Also, how relieving it is to get your groceries delivered as and when you require, within minutes. Right from emergency medical supplies to routine daily essentials, can from customized cakes to gourmet specialties from the extreme corner of your city – quick commerce is spreading smiles in multiple forms.
With more than one-third of the global digital shoppers embracing this disrupting offering, the global quick commerce market is set to grow exponentially, with an estimated CAGR of 42% till 2027. What began as an assurance of 2-day or same-day delivery, has now evolved into a highly competitive and instant gratification service model with delivery SLAs of 10 minutes!
This blog explores the rise of quick commerce, its features, benefits, challenges, and the role of technology in its growth.
Quick commerce, or q-commerce, enables fulfillment of limited or smaller order sizes within shorter time frames. The delivery time window may vary from an hour to 10 minutes. The orders mostly focus on daily essentials, like, food, groceries, medicines, etc.
In contrast, eCommerce involves the sale or purchase of products generally delivered within a timeframe of 3-4 days or 24 hours.
Let us see the key differences between the two popular business models.
Q-commerce aims to fulfill deliveries in a matter of minutes or at least within a few hours. While with eCommerce, it might be same-day delivery or next-day delivery, or a delivery spanning over a few days.
Ecommerce depends on a larger vehicle fleet composed of two-wheelers and four-wheelers, and eCommerce businesses might have their own fleet, or mixed fleet. On the other hand, q-commerce order fulfillment is carried out via fleet primarily comprising of two-wheelers, electric vehicles, bicycles, and even on-foot deliveries, depending on the delivery location.
With q-commerce, stocks are restricted to a fixed set of high-demand items and the type of items being delivered are also generally low-cost daily essentials, food, or medicines. E-commerce services, on the other hand, offer a considerably diverse assortment of products.
For q-commerce, the orders are fulfilled from a local store, dark store, cloud store, or micro fulfillment store. These stores can be understood as mini-warehouses located across the entire city, where the goods are arranged to facilitate swift bagging.
In the case of e-commerce, centralized warehouses are used to store products and the entire h distribution network comes with multiple such warehouses.
Now that we know what is quick commerce and how it differs from eCommerce, let us move on to discuss its operational model.
Every incoming order is captured and managed via an Order Management System (OMS) and as soon as an order is captured, three things are triggered:
All three components of the quick commerce delivery management system then start planning and optimizing the tasks for delivery orchestration well within the delivery SLAs. The warehouse/dark store/store/merchant starts order preparation in a prioritized manner (this step would involve activities such as food preparation, order bagging, etc.)
Once the order is created/prepared/bagged, the first step is complete.
The delivery partner handles the delivery operations as per the delivery SLAs. The orders are allocated in an automated manner keeping multiple constraints in mind, such as delivery location, vehicle type used for delivery, rider payout, and order clubbing criteria for cost-efficient operations.
The rider sets out for delivery with one or more orders as per the optimized planning done by the delivery management system. The on-road movements of the driver can be tracked in real-time by all the stakeholders, such as store managers, customers, etc.
As the delivery management system also prepares an optimized route for delivery, if a driver deviates from the route, the store manager as well as the customer can see the same.
The customers get real-time order tracking, the contact number of the rider, their name and other order-specific information for a wholesome CX.
Once the order is delivered to the customer, the rider marks the order complete in the app and moves on with the next delivery or back to the store for the next order. Now, to ensure that every delivery is done securely and no fake delivery attempts are made, the delivery management system shares a unique OTP with the customer that must be entered by the rider for marking the delivery complete.
There can be other forms of PoDs or Proofs of Delivery that can be used for delivery validation.
While the basic operations model of quick commerce remains the same across the industry, the level of planning, optimization, automation, and offerings vary across the businesses.
Next, we explore the unprecedented rise of the quick commerce delivery industry and the key growth drivers.
The ability to complete orders within minutes has definitely contributed to the rise of the quick commerce delivery industry. The audiences for the market comprise different types of buyers – busy professionals to nuanced buyers but convenience is a common sentiment behind the purchase.
Some other key growth drivers include cheaper commodities, fast deliveries that can be tracked in real-time, and 24X7 availability. We discuss the top growth contributors in the following section.
Deloitte found that 50% of customers spend extra to purchase with convenience as a prime concern. This can be utilized to target demographics with time constraints or more disposable income. Compared to eCommerce, quick commerce caters to a smaller selection of products. This allows businesses to fast-track consumer orders owing to niche product selections alongside local presence.
Quick commerce helps businesses enter the market with a significant competitive advantage. With speed and convenience as part of their logistics journey, enterprises can attract more customers. On-demand delivery players are able to compete with eCommerce giants and local brick-and-mortar stores, thanks to their USP of speed and convenience.
Imagine being a host at a party and finding a shortage of food and beverage. What if you realized you were short of key ingredients for your meals? Or, you are a working mother who needs to leave for the office when her house help informs her that the baby formula is finished. These are a few instances where the speed and reliability of quick commerce eventually save the day. Quick commerce services help eliminate customer pain points with their signature speed and convenience, increasing brand loyalty.
A major drawback of the same-day delivery option is the cut-off time. If you fail to place your order by a particular time frame, you cannot avail the benefits of same-day delivery. Since quick commerce operations are localized in nature, you can access their services on the same day upon receiving the order. Increasingly, brands are offering 24-hour availability of delivery services. You can now quickly satisfy the midnight cravings or urgent medical needs, irrespective of time and place.
The increased demand for customer personalization has made digitization of the entire customer journey essential. Customized product search helps make the discovery process intuitive and effortless for the customer. Similarly, product recommendations allow intuitive selection and faster viewing by displaying appropriate products conveniently on the platform. The platforms also send emails with personalized names to customers, thereby creating a sense of connection with the customer. AI-based chatbots are increasingly becoming the first point of contact for customers.
Now that we have answered the ‘what is quick commerce’ part, let us explore the deeper waters and find out how optimization is the key enabler here.
Businesses are investing in smart automation to initiate super-fast deliveries while keeping their operational costs in check. While they have to make sure that the order reaches the customer well within the SLA limits, they also need to ensure that no asset gets underutilized or over-utilized and that the delivery operations are orchestrated in the most optimized manner.
Hence, when it comes to the success of a quick commerce business model, optimization is the top operative word.
Here are a few use cases of optimization via smart delivery management platforms.
Smart built-in algorithms automate the evaluation, analysis, and allocation of consignments to the right vehicle. The system finds the most efficient route based on consignment mapping with the vehicles and helps in minimizing fuel costs, and delivery time by increasing fleet capacity and efficient route planning.
The routes are suggested as per the real-time traffic and road conditions and are changed dynamically in case of congestion always ensuring the most optimal deliveries.
Orders are automatically allocated to riders based on pin, location, and availability. Businesses can also ensure the availability of delivery agents during peak hours using smart rosters. Driver KPIs provide insights regarding driver performance, and enterprises can reward agents with high-performance metrics.
Businesses generally have a mix of in-house, 3PL, and floating vehicles in their fleet for delivery. Vehicles are optimally allocated based on the nature of the product, delivery window, distance to be covered, and more.
With intelligent optimization, products are efficiently segregated based on their weight, type, and size for quick and hassle-free pick-ups and keeping multiple constraints in mind, such as delivery times, delivery location, any other order on the way, etc.
This also includes fulfilling the shipping orders from appropriate fulfillment sites such as warehouses, dark stores, etc.
Order clubbing and multi-stop deliveries are vital to boost route productivity and ensure SLA adherence. Assigning a single rider with multiple deliveries and planning the route allows businesses to save a significant amount of time and money.
The quick delivery management platforms deliver actionable insights by advanced data processing to estimate future sale patterns, performance, productivity, etc. With predictive analysis, enterprises can stock up their inventory to cater to the targeted market, even in times of high demand. Moreover, companies can identify bottlenecks and points of wastage in the business model.
Despite the continued rise of quick commerce, it has its fair share of challenges. The rapid growth in its scale and scope has brought many actual and potential drawbacks to light. A few of them are listed below.
Managing the fleet, and riders and deciding which combination works the best for which type of deliveries – there is much more to fleet management in quick commerce business models. Manual management is impossible given the scale and complexity of operations and investing in automation that works only for a few fixed constraints is also a job half done.
This is because optimization needs can change or evolve over time leaving room for cost leakages and inefficiencies.
The ultimate success of delivery depends on the rider’s motivation. Businesses record losses because of late deliveries, fake delivery attempts, re-attempts at delivery, and fake non-delivery reasons. Also, the inability to manage, monitor, track and control the riders in real-time makes it impossible to unlock efficiency.
The inability to trap fake reasons for incomplete deliveries or late deliveries is another challenge in the quick commerce ecosystem. There can be many reasons for them – address inaccuracies, technical glitches, poor operational control, and lack of visibility into the granular movements.
Poor visibility into the delivery operations leads to higher delivery costs, inefficiencies, and process redundancies. As there is no unified platform to communicate and collaborate with multiple parties involved in the business model, brands end up with poor business intelligence.
Optimization has many use cases – riders, routes, delivery, vehicles, and vehicle capacity, and every delivery scenario involves optimization at multiple levels. Further, optimization is a constant process which means that it is going to be done again and again.
However, lacking the technological ability to optimize on multiple levels and in different ways for different orders makes it impossible to optimize the operations completely.
To resolve these lacunae, we need intelligent automation integration into the operational setup. We are going to explore the same in the upcoming section.
Quick commerce players need to optimize their business models and workings to survive and sustain an economically viable operational model. And this is where technology and automation come into the picture. Let us see how logistics automation helps on-demand enterprises overcome quick commerce complexities:
With manual order and roster allocation, a single unintentional error can result in multiple problems. AI/ML-enabled quick commerce platforms facilitate businesses to scale their on-demand deliveries and meet customer expectations. Orders are allocated to riders based on factors like the current workload of the driver, order volume, proximity to the delivery location, etc. This ensures a cost-effective and resource-efficient operation at all times.
Smart logistics platforms allow enterprises to track driver performance via custom KPIs. Gamification is an excellent tool to reward KPI-driven performance and encourage positive competition among riders. Businesses can ensure highly transparent rider payouts and automate payments based on shift adherence.
In a manual setup, tracking rider deviations and prohibiting fake delivery attempts become difficult. Intelligent logistics platforms help secure digital proof of delivery to authenticate delivery fulfillment. Moreover, AI-powered dispatch management allows hub managers to track deviations by riders from the suggested optimum route. Riders can also avoid potential misrouting or delays with smart geocoding features.
State-of-the-art on-demand platforms enable businesses to track order status in real-time. From a customer, POV can check live delivery ETA and get notified instantly in case of potential delays. In case of multiple lanes, customers can pin their exact location on the map for riders to ensure hassle-free deliveries. Riders also get access to customer details for direct contact if required.
The need for fast deliveries is paramount for quick commerce players. This influences trip volume and a resultant increase in carbon footprint. With automated trip planning and route optimization, businesses can identify efficient routes early on. The system identifies the best mode of delivery, be it cycle, EV, or others, making it efficient and sustainable. With vehicle-based geofencing, riders can also optimize fuel waste and help businesses meet sustainability goals.
Shipsy’s AI-powered logistics platform ensures seamless on-demand and hyperlocal delivery for your business. The built-in intelligent features allow you to execute cost-effective, scalable, and customer-centric operations without a hitch.
Ensure a positive customer experience with multi-channel communication in an increasingly competitive world. Shipsy’s innovative functionalities created based on a consultative approach have helped businesses across the globe to realize:
Pave the way for a more personal, convenient, and engaging consumer shopping experience. To get started, reach out to the experts or sign up for a custom demo today.
Ecommerce and Quick Commerce models have their own strengths. But as customers' expectations evolve, the former would need a mix of greater speed and wider offerings of items to stay relevant.
The fresh produce segment is gaining traction in the online grocery market. However, quality and freshness emerge as two major pain points. Find out how the latest technology can rise to the occasion.
