3 Things You Should Know About Hyperlocal Supply Chains

Hyperlocal Ecommerce Business

Hyperlocal online retail businesses are popping up in dense urban areas all over the world.

I’ve been calling it the “mom and pop” reaction to big online retail firms.

In this post, I’m going to breakdown what a hyperlocal e-commerce business is and what we can expect to see in the next couple of years.

What Do You Mean By Hyperlocal Ecommerce?

A hyperlocal eCommerce business provides goods and services for locally sourced, produced and designed goods. Think food, medicine, consumer goods, retail products and services that are valued on convenience.

One distinct characteristic that sets a hyperlocal business apart from a large retailer is that the entire supply chain is located in close proximity to the buyer and the seller.

So, even though the local coffee shop 5 blocks away doesn’t deliver, “Joe Blow” on Postmates, UberEats or a more localized service will bring coffee right to your office or couch for a nominal fee. Why not have the hyperlocal business pick up windshield wipers for you from AutoZone for a few extra bucks; binder clips from Office Max?

The hyperlocal business operates within a local proximity to the high population and retail density. Consequently, a dependent subset supply chain is created to appeal to the “on-demand” consumer. In essence, the hyperlocal supply chain is “piggybacking” on what the larger brick and mortar retailers have in stock already.

What Is The Attraction To Hyperlocal?

Speed. Hyperlocal businesses can deliver products and services faster than larger online retailers. Hyperlocal food delivery time is already less than an hour on average. Products you would normally have to order by a certain time to receive next day service are now available to you within a matter of hours. Additionally, most of these deliveries are based on your exact vicinity and not solely reliant on a street address.

Trust. The consumer is put in a position where they can see and understand all the steps of the supply chain from purchase to sourcing to delivery. Consumers know where the product is made and most likely who will be delivering it to them. Hyperlocal businesses have a huge incentive to capture and retain customers by building that trust and enhancing the overall customer experience.

In layman’s terms, the meat tastes better when you know the butcher and the butcher knows your cut. Word of mouth will be a key component for hyperlocal business success in their niche communities.

What’s Next?

The rules of hyperlocal ecommerce businesses are still being written.

As we see changes to urban landscape and infrastructure, it will become easier for larger eCommerce retailers to compete with the hyperlocal groups of today.

Most hyperlocal businesses will need to increase their branding efforts to stay above water when larger groups become more competitive.

I also expect to see last-mile distribution and B2B solutions emerging quickly within dense urban cores, as spin-offs from B2C models.

This is especially true in central business districts (CBDs) as office couriers branch out from traditional models.

Hyperlocal supply chains will change the design of restaurants, grocery stores and general retailers going forward.

Drive-through/pickup lanes will be streamlined to accommodate and enhance food delivery traffic. Grocery stores will be redesigned to expedite delivery orders.

References:

GH Consulting – Believe the Hype: Hyper-local supply chains

Techcircle – How to survive and scale in hyperlocal e-commerce

NetSolutions – 5 Mistakes Every Hyperlocal Commerce Startup should Avoid

IBM – Hyper-Local Personalization Becomes a Reality

Forbes – Target To Recast Stores As 'Hyper Local' Online Fulfillment Centers To Revive Ailing Business

The Balance – Hyperlocal Ecommerce Businesses Are Coming of Age

Note: This post was originally posted on The Logistics Broker and was written by Joe Oliaro.

Related Article Hyperlocal: Facing the Supply Chain Future

Related White Paper

The Future is Hyperlocal: How Downsizing the Downtown Core Can Future-proof Ecommerce Distribution New!
This white paper explains how hyperlocal fulfillment, also known as micro-fulfillment, works and detail the benefits as well as some of the risks, you will have a better understanding of whether it might be a solution for your operations. Download Now!

---

More Resources from C3 Solutions