Need for Speed: How can small retailers compete with quick commerce giants?

As ecommerce options become the new normal for shoppers, UK consumers are losing their patience.

In-depth analysis by Instant Delivery App (IDA) Getir recently found that 1 in 4 UK consumers now uses IDAs instead of weekly supermarket shops – and 19% say they use them at least once per week.

Large online retailers, like Amazon, have shoppers spoilt for choice with their express delivery services such as Amazon Prime. But the call for speedy shipping is more difficult for small businesses to answer.

We take a look at what small business owners can learn from the growing demand for quick commerce, and how you can optimise your delivery strategy for both speed and profitability.

Quick commerce boom: What is it and what’s behind it?

Quick commerce, also known as q-commerce, is the next generation of e-commerce. As the name suggests, it is all about being fast.

Quick commerce businesses have been steadily growing over the past decade. Consumers increasingly shop online to save time and order groceries and food deliveries from the comfort of their home.

But the real driver behind the rapid delivery boom has been COVID-19.

The pandemic and its subsequent lockdowns meant people were forced to isolate and unable to order food, broadening the success to all food services. This increased demand pushed the food and drink delivery resulted in performance years ahead of projections.

According to figures from marketing analytics platform Adjust, global installs of food delivery apps increased by 25% in 2020 compared to 2019, and went up a further 21% in 2021.

New players include Zapp, Gorillas, and Grocemania – all of which were founded in the past three years.

Berlin-based operator Gorillas is probably the most famous of these brands. Despite only being founded in 2020, the app has already reportedly received “close to” £1bn and passed a unicorn valuation in March 2021.

Is the quick commerce delivery model sustainable?

The figures associated with IDAs are undoubtedly impressive – but there are concerns about the sustainability of this popular delivery model.

Given the large amount of funding these companies have had, capital is not much of an issue at the moment.

But in such a competitive landscape, most startups in the space are struggling to stand out. Many are hinging their USP on low prices.

This means that, despite having high share prices and funding figures, brands are struggling to build a loyal customer base.

As a consequence, the potential for long-term profitability looks increasingly suspect.

What can my small business learn from the growing demand for quick commerce?

Quick commerce makes it possible to deliver small quantities of goods to customers almost instantly, whenever and wherever they need them.

Its success tells us a lot about the current consumer market, which has gotten hungrier for instant deliveries since the emergence of express couriers like Amazon Prime.

Quick commerce is therefore something that all SMEs will need to engage with as the online retail space gets more competitive.

But as we’ve highlighted, it’s also a risky space to enter in terms of profit.

If your company, or startup idea, needs to make use of courier services then you’re probably wondering how you can afford to offer super fast delivery options without losing money.

Customers often underestimate the huge amount of resources required to get a package to their doorstep in 2 to 3 days. This can price out smaller, local retailers that cannot offer fast shipping on the scale of larger retailers.

So how can you adjust your shipping strategy to compete with other SMEs or even large ecommerce companies?

5 top tips to streamline your shipping strategy

1. Automate your fulfilment process

Automation is key for streamlining your business. Apps and third-party extensions can make it easier to deal with inventory management, creating an order, gathering all the shipping documents, and fulfilling your orders.

To aid with faster delivery, all these processes should be linked so that each step becomes simple and efficient. One of the easiest ways to do this is to integrate your existing website with a dropshipping supplier platform, such as Oberlo.

It will then act as your sales team to manage the purchase, packaging and shipping of your chosen products, so you won’t have to worry about overseeing these time-consuming processes yourself.

You could also outsource your fulfilment process to combine your packing and shipping processes into one seamless flow, using a fulfilment centre.

2. Keep it local

If you’re looking to offer same day services to customers then a low-cost way to do this is to focus your attention on localised customers.

This is also an absolute must if you’re a business that delivers a time-sensitive product, like Hackney Gelato.

Another small business that is effectively utilising this strategy is Oxwash. The top 100-ranked startup is an Oxford-based eco-friendly dry cleaning solution that’s putting a new spin on laundry. It uses bicycles to bring freshly-cleaned materials to their local service users in minutes.

3. Reduce your shipping options

While it might seem counterintuitive, when it comes to same-day or next-day shipping, having too many options can quickly become a pain for your business.

Fewer options mean that you have easy shipping solutions ready to go, ensuring your customers get their orders, fast. Preparing your orders for shipping also becomes a lot easier.

4. Prioritise customer service

One of the main factors that influences consumers to use small businesses is the added customer service they provide.

Large-scale companies are often less intimate and can make customer support an afterthought as they don’t tend to know who they are talking to or track existing relationships.

If you are unable to offer next day delivery, or if you are worried that your customers might experience delays, concentrate on providing a personalised service and your customers probably won’t mind waiting another day or two to get their package.

5. Focus on finding the right courier service

The best courier service is not necessarily the biggest player in the game. Local or industry-specialist couriers can often be the better choice if you’re trying to streamline your delivery.

Make sure you look at every aspect of the courier – including maximum parcel size, customer reviews, and extra perks, to see how these align with same day shipping.

If you sell big products that only half of a courier’s fleets can accommodate, then look elsewhere as this is likely to increase the risk of delays.

Cheaper rates don’t necessarily equal more efficiency. Your courier can offer competitive pricing. But if they regularly lose parcels or deliver them late then this will cost you dearly – both in lost custom and refunds.

Communication is another key feature to look for in a courier service. You need to know whether your shipments and packages are getting to the right location at the right time, so make sure that the courier service is providing proof of delivery.

Vehicle tracking might also be useful if you are ever sending things with a courier that take several hours or several days. The best courier services will offer these as part of your partnership.

Finally, check that the courier you work with provides insurance. In the event your package or shipment doesn’t arrive, and you were shipping valuable goods or confidential information, this is immensely valuable.

Conclusion

Small businesses can learn a lot from the quick commerce boom. New technologies have made super-fast delivery not just an option, but an expectation for consumers.

But as questions arise over the long-term sustainability of the rapid delivery model, it is important for SMEs to engage with the trend carefully to ensure you do not prioritise punctuality over profit.

While express delivery services are undoubtedly attractive to customers, the most pressing requirement from SMEs is to do them well, rather than cheaply.

By properly streamlining your shipping strategy and partnering with a high-quality courier service, you can ensure you are prioritising efficient deliveries, over instant.