Automation: The Real Magic Behind Quick Commerce

Ecommerce revolutionized the shopping landscape forever, a few decades ago. The model’s latest and more evolved genre works the same charm for on-demand deliveries. Just faster, as the name suggests. A consumer can expect a small basket order (mostly groceries and other items of daily use) to be delivered to their doorstep within a window of 40 minutes from placing an order via an online delivery app. The entire model displays enormous potential, with a largely untapped market.

Quick Commerce (Q-commerce) clocked close to USD 0.3 billion in 2021. Redseer predicts a 10-15x growth in the model to become a USD 5 billion market by 2025.

Q-commerce caters to urgent delivery needs with an order fulfillment window ranging between 40 to 10 minutes. This is one of its key differentiators and prime reasons why everyone is in love with Q-com. While Q-com brands have an obvious reason to rejoice, the end-customer and logistics companies are reaping the benefits. Shadowfax has reported a 500% jump YoY via quick commerce deliveries.

Numerous brands are entering the instant delivery ecosystem. Blinkit (formerly Grofers) and Swiggy’s Instamart are at loggerheads to capture the more significant share of the pie. Less than a year old, Zepto is already making waves with its 10-minute delivery service across metro cities. It takes Zepto 60 seconds or less  (from the time a customer checks out of the app till their groceries are packed and dispatched) to complete the entire process. The brand has experienced exponential growth in a short span with its operational prowess. Although setting up multiple dark stores and partnering with local grocery shops is helping companies ramp up speedy deliveries, there is a logic powering this magic trick.

It is called technology.

How Technology Is Fuelling The Growth Of Quick Commerce

Faster delivery is increasingly becoming critical to business sustenance. Going by numbers:

• 41% of online shoppers see faster/reliable delivery as important
• 84% of shoppers will ditch a brand after just one poor delivery experience.

The necessity to meet these requirements urges brands to serve within wafer-thin delivery windows.

Rapid order fulfillment depends on three key factors.

1. Dark store location and inventory availability 
2. The pace at which order gets allocated
3. How efficiently drivers are managed

Let’s Discuss the above points in detail.

Dark Store Location and Inventory Availability

As eCommerce orders surge, brands will have to bring inventory closer to heavily clustered locations to ensure a quick delivery turnaround. Strategic placement of fulfillment centers and amping up logistics capabilities is critical to facilitate faster deliveries.

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%. This is indeed highly likely. Neighborhood stores or local retailers (Kirana) are one of the biggest strengths behind the success of this quick commerce model. But the lack of real-time inventory visibility is the real challenge in realizing its true potential. Going forward, the delivery aggregators need to provide consumers and related stakeholders with complete inventory visibility.  Developing such technological capabilities and automating core logistics operations can help brands shrink order fulfillment windows.

The Pace At Which Order Gets Allocated

Manual processes are cumbersome and increase delivery TAT. Brands must leverage automation to drive timely dispatch to ensure faster deliveries. Intelligent auto allocation rules can eliminate human dependencies and automatically delegate delivery tasks to drivers based on delivery type, rider current order volume, proximity from store and customer, and other parameters. It also enables brands to scale deliveries by partnering with multiple logistics providers after considering cost, historical data, and other factors. New-age logistics management tools can drive a net allocation rate of over 99%.

How Efficiently Drivers Are Managed

When it comes to quick commerce, time is the essence. Delivering on SLAs mandates having an agile and productive team. Often, managing drivers and their respective KPIs can become challenging for store managers in the absence of the right technology. Smart logistics management tools can resolve this challenge by declaring advanced driver scoring parameters like time taken to start the bike after the order was received, deliver the order, reach back to the store, and so on. Moreover, it empowers store managers to manage driver shifts and assess routes taken to deliver the order.

For instance, the system automatically checks out the driver after a specific time period post-delivery, or once the shift ends, and other configurable parameters set by the managers. The solution also evaluates if there was a difference between the system-suggested planned route and the actual route taken by the driver to investigate delayed deliveries.

For a deep dive into the trends that will rule the logistics space this year, including the quick commerce patterns, click here.

As consumers taste the speed of quick commerce deliveries, seeing how this new benchmark will set further disruption and innovation will be interesting.