Hyperlocal Delivery Business Model: A Comprehensive Guide

Mike Wilson

April 3, 2021

Would you be surprised if we told you that the online hyperlocal services are expected to grow by USD 451.64 mn during 2020-24, progressing at a CAGR of 18% during the forecast period? With the corona effect, this number might even raise more. And this is the right time to tap the potential that this market holds and skyrocket your business locally. 

Wondering how? Well! HyperLocal Cloud is your ultimate go-to solution to let you flourish your hyperlocal delivery business. What is even better is that it comes with a 30-day trial. 

Here we explore the world of hyperlocal delivery business and take you on a path where you will find anything and everything about it in this comprehensive guide.

 

Introduction to a hyperlocal delivery business model

The marketplace is filled with the buzz of the word hyperlocal. It is highly imperative to understand its details at this point. Let us first break down the term to understand.

Hyperlocal means localization in its most accurate form and signals towards going local in the business. 

Delivery model refers to the mechanism to be followed to gratify the on-demand needs of the hyperlocal community’s customers.

Hyperlocal delivery businesses operate on the principle of on-demand with added credibility. It aims to deliver products to consumers that are present within their vicinity. Consumers love it because it allows them to get groceries, food, medicine, and personal care products online and delivered quickly. 

Undoubtedly, the definition itself is sufficient in answering the ‘why’ behind the rising fame of hyperlocal delivery services.

 

Reasons to opt for hyperlocal delivery

When the global economy is witnessing the effects of COVID-19, the hyperlocal delivery business has attained more significance. Communities and local organizations are continuously striving to promote social distancing. This model comes as an effective measure to prevent the virus from disrupting more lives. 

Have a look at the other reasons that highlight the importance of a hyperlocal delivery business

 

  • Promotes the creation of self-sufficient economies

With the fall in popularity of the brick-and-mortar stores due to COVID-19, the economy witnessed a surge in online stores. 

A hyperlocal delivery model promotes self-sufficient economies, and the retailers can supply goods in the locality. Consequently, the economy will see a rising graph of growth while making way for the community’s overall development. 

 

  • Credibility assurance to the customers

Companies tie up with local retailers, making it easy for customers to trust the source from which they would get their supplies. Assurance of quality standards to customers is the best thing they get in return of purchasing from a hyperlocal delivery business

 

  • Supports local businesses

The presence of businesses in the rural areas was almost negligible when globalization was the only concept in the market. However, the current scenario is different from what it was previously. Hyperlocal delivery services have opened the locked doors, and even small businesses can taste success. 

 

  • Chucks out intermediaries

Intermediaries generally take away a larger share of profits that should otherwise fall in the producer’s kitty. And the things do not end here but extend to a situation where the producers have to inflate their margins. As a consequence, the products become expensive. This model, fortunately, requires no intermediaries.

 

  • Provides maximum results with minimum efforts

Hyperlocal delivery services provide a solution wherein the retailers don’t have to put much effort but the results are great. In simpler words, they don’t require an app developed and can enlist their name on the platform.

 

  • Offers a transparent model

It enhances transparency for customers as they can analyze, compare, and choose the best product at the best price. Besides this, it also prompts the retailers to follow high business standards and offer efficient delivery services. 

 

  • Promotes healthy competition

Let’s say you are planning to go for a hyperlocal model for grocery business. Admittedly, there is a large number of grocery stores that are running their businesses. Each one of them can take their game a notch higher as the competition will remain at local level only. This promotes a healthy competitive spirit among the retailers locally. 

 

  • Offers a go-to solution

Hyperlocal on-demand services help customers to shop for almost everything from your smartphone with just a few clicks. So, be it a hyperlocal grocery delivery model or any other business, you can still run all your errands on your smartphone. Nonetheless, the hyperlocal delivery services help in keeping the intermediaries out of the picture.

 

Working of hyperlocal marketplace

A hyperlocal business platform enables local and offline businesses to reach out to their customer base and deliver them within a very short period. The business’ service scope could fall within the range of a few meters to few kilometers from the business’ location. 

The local ventures have the guarantee of visibility among the customers that fall within their vicinity. This model comes with product delivery at a faster speed. 

For instance, if a grocery store doesn’t offer home delivery, then a hyperlocal business can help them change the scenario. 

A hyperlocal marketplace can be divided into:

  1. Hyperlocal services: This segment includes the service sector, which provides home services, logistics, medical, laundry services, and others. 
  2. Hyperlocal delivery: This segment includes delivery of food products, groceries, electronic gadgets, and personal care items. 

Now, let’s see the flow of things in a hyperlocal delivery model

 

  • Choosing products or services to be delivered

The first step to making the model work is choosing the products or services you would want to deliver. You can begin with essential products and can target the local area. 

 

  • Identifying the target audience

Without a target audience, there can’t be any business. Knowing the audience you wish to target and then identifying them is vital to make the model successful.

 

  • Fostering partnerships with local delivery partners and merchants

Once you have identified the products and the target audience, the next thing is to begin developing partnerships with home delivery partners and merchants. 

 

  • Streamline associations

Deciding whether to hire an organization for home deliveries or a squad of delivery boys is of paramount importance. The step also requires them to associate with nearby stores to save delivery boys’ time in delivering the order. 

 

  • Formulate an income model

It involves collaborating with nearby stores that will pay you a commission every time you pick their stuff for delivery. This, for instance, can be done relatively quickly for a hyperlocal grocery delivery model. 

 

  • Seek a solution

The last but the most crucial step is to seek a solution that will ramp up your business game and help you obtain an edge over others in the competition. Look for a hyperlocal delivery model that will suit your business the best. A solution like HyperLocal Cloud can give you the ultimate gateway to reaching out to your local customers.

Some marketplaces deliver products and services within 24 hours from the order time. But when there is something even better like hyperlocal delivery services, then why wait for even 24 hours?


Constituents used to make up a hyperlocal marketplace

It is no cakewalk to build a hyperlocal marketplace but a genuine service provider can always make it convenient. Technologies used in making a hyperlocal marketplace are:

 

  • Navigation system

The built-in GPS or other reliable navigation systems are used to assist customers in finding the store’s location and the tie-ups they have. Consequently, this will make it easy for customers to choose the best. 

 

  • Online payments

Digitized mode of payment is another essential vertical of creating a hyperlocal marketplace. The parties associated with this model demand speedy and more uncomplicated processes. Admittedly, only a digital payment solution can render what’s required. 

 

  • E-commerce platforms

An E-commerce platform consisting of a mobile app and an e-commerce website forms is vital to let communication happen between clients, suppliers, and employees. 

 

  • SRM

Supplier Relationship Management (SRM) is a platform for suppliers where they can upload their products and build connections with the retail stores. 

 

  • CRM

Customer Relationship Management is a platform that builds understanding between customers, businesses and the agencies that are delivering. 

 

  • Shipping

Logistics and shipping form an integral part of a hyperlocal delivery model.

 

Supply chain models of a hyperlocal business

A hyperlocal business model consists of three leading players:

  1. Suppliers
  2. Aggregators
  3. Consumers

Here are the three basic supply chain models of a hyperlocal business.

Inventory-led model

In an inventory-led model, you can source products directly from the brands and keep them in your inventory. The most vital thing in this model is that you have to keep track of inventories and manage them through a team.

Aggregator model

In this model, you have to play an intermediary’s or facilitator’s role to connect the distant suppliers and customers. There is no need to maintain an inventory as it is a zero inventory model

Hybrid model

A Hybrid model is a combination of inventory-led model and an aggregator model.

 

Features Of A Hyperlocal Business Model

There are a plethora of features that make a hyperlocal grocery model successful. Have a look at the features from various angles.

Basic features:

  1. Automation in the detection of customer’s location
  2. Various online payment methods
  3. Shipment scheduling
  4. Location-based product filtration
  5. Social sharing options
  6. Product & services’ reviews

Admin features:

  1. Enables admin to share various ship areas and zip codes
  2. Allows admin to set up multiple filters

Vendor features:

  1. Enables vendors to add several ship areas and zip codes
  2. Enables vendors to edit/delete the ship location
  3. Automates the fetching of vendor’s correct location

Customer features:

  1. Automates geolocation detection of the customer
  2. Enables filtration of products based on the detected location
  3. Enables editing location that is already specified
  4. Checkout validation

Hyperlocal targeting

Hyperlocal targeting is all about identifying your target audience. This can only be done by classifying the audience based on different grounds like income, spending habits, shopping patterns, tech knowledge, etc. 

The next stage is to strategize how to reach them using techniques like bulk SMS or emails. If you are planning to do it for a business like a grocery, you can constantly strategize and search enough for devising a hyperlocal grocery delivery model. Additionally, you can search for the local customer trends to formulate the strategy precisely.

 

Difference between last-mile & hyperlocal delivery

Difference between last-mile & hyperlocal deliveryGenerally, people assume last-mile delivery and hyperlocal delivery to be the same. But the fact is that they are different in every aspect. We have pointed out the significant differences between both here so that you can analyze them better.

Delivery time

The Hyperlocal delivery model aims to deliver the product within 2 to 3 hours from the time of order. At maximum, it can take 6 to 8 hours. The reason is that it stays restricted to a small geographical area, and it gets convenient for retailers to deliver shortly.

In last-mile delivery, it can take around 12 to 16 hours. It can also take more than 16 hours if the delivery area is large, especially in metro cities.

Delivery responsibility

In hyperlocal delivery, the products can be delivered by the seller’s team or by a delivery company employed by him. 

Delivery responsibility lies on the courier company that carried the first-mile delivery as a single source manages the end-to-end process. 

Delivery area

The area is limited in a hyperlocal delivery model, and the deliveries can happen within a radius of 5 to 15 km. In some cases, it can be done intra-city where the distance can be more than 20 km. 

In last-mile delivery, the delivery area is large and can go up to 30 km. The location of the central transportation hub, however, determines the last-mile delivery area. 

Restrictions

For hyperlocal deliveries, there is a restriction on weight. It cannot be more than 10 to 12 kgs. The fundamental reason is that the deliveries are managed on two-wheelers mostly. Therefore, there are safety concerns with regard to carrying more weight. In case the weight exceeds, extra charges are taken. 

There are no restrictions on the weight and volume. The seller pays the delivery charge. 

List of products delivered

Hyperlocal delivery services aim to deliver products in a local area, and the delivery time is also less. Therefore, it delivers items like groceries, medicines, food items, etc. A hyperlocal grocery delivery model turns out to be the most successful in the league in simpler words. 

In last-mile delivery, the products can include televisions, fridges, clothes, cosmetics, and other such items. In most cases, they don’t include food items and groceries. 

Other business models

Dunzo’s business model

Dunzo is a hyperlocal on-demand multi-delivery app that charges a small delivery fee. For instance, you forgot some of your personal belongings like a laptop, mobile phone at home, Dunzo would deliver it to you. It also delivers groceries, and clothing on-demand.

Gojek business model

Gojek is a multi-service platform that caters to consumers, merchants, and drivers. It provides different services to all three segments and renders a reliable experience to the users.

 

Relevance of hyperlocal delivery business in today’s time

The present scenario of the world is jittery due to COVID-19. Amidst all the pandemic chaos, the economy is trying to get back to the earlier times. And hyperlocal grocery business is one of those measures that can correct things at the grass-root level. 

With the changing buying patterns of the customers, things are transforming rapidly. Some areas in the world are under complete lockdown, and people aren’t allowed to move out of their homes. This is where the hyperlocal grocery model comes into action to serve the people at local levels. 

Hyperlocal delivery is a game-changer as people are mostly buying from the local shops. The local retailers can make the products available to the customers at their doorstep in the shortest time. The situation at present is making conditions favorable for hyperlocal delivery to grow and touch every part of the economy. 

Hyperlocal delivery is a new concept, but it holds the potential to grow exponentially. Many local retailers are already up for embracing this concept and making their business grow. And since there is no global competition, this option becomes a go-to solution for them. 

The best aspect of the model is helping various small businesses get visibility and earn more. This is with particular reference to hyperlocal grocery business as grocery is one such thing that is vital for survival and should be available locally. 

 

Conclusion:

The hyperlocal marketplace is the present and future of the global economy. Businesses have understood that customers value experiences. To gratify customers, businesses are getting inclined towards embracing a hyperlocal delivery business model. 

HyperLocal Cloud helps connect the dots and boost the local businesses as they fulfill the local community’s demands. We aim to deliver a seamless and effective solution so that our clients’ experience speaks volumes of our expertise. 

Get in touch with our experts and know how we can take your business to new heights. We will be glad to answer all your queries and see your business rising & growing each day. 

Go local with HyperLocal Cloud!

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