Everything You Need to know about Hyperlocal Business Model

Smartphones have become the game-changer for the on-demand delivery business models. Buying groceries to ordering food, purchasing medicine to renting furniture, the rise of on-demand apps have made our life easier than before. Consumers now prefer to get all their basic need services at their doorstep so that they can save that amount of time and can get relaxed till their order get delivered.

These on-demand apps have given acceleration to one such business that is known as hyperlocal business. The hyperlocal delivery business model is a perfect example of how technological advancements can unite with the age-old favorite shopping methods.

What is Hyperlocal Delivery Business Model?

The term ‘Hyperlocal’ refers to ‘a small geographical area’. Hyperlocal delivery model is when delivery of products is done within a particular geographical area. The pick up location from where the order is packed and the customer’s address should lie within the same pincode.

This kind of delivery model works mostly in cases of groceries, medicines, regular household items, food delivery and even services such as plumbers, electricians, carpenters etc. The USP of hyperlocal e-commerce businesses lies in their ability to deliver products and services at unbelievably fast speed.

Hyperlocal Delivery Business Model

Hyperlocal  delivery model is defined as a business model in which the service aggregator acquires requested product locally and delivers the same to the customer in the same geographical area.

Hyperlocal business model
Hyperlocal Delivery Business Model

For example, let us consider a hyperlocal on-demand business in food. When The customer places an order for the required food item through the dedicated mobile application, The aggregator receives the order and passes on the order details to a delivery partner. The delivery partner dispatches a delivery boy to procure the requested item from a local store and makes sure that it reaches the customer at a requested location. The aggregator drives the entire system and earns a commission for the role it plays.

This model is applied to products as well as services like plumber, electrician, beautician, etc. The most popular example of a hyperlocal delivery model would be Zomato and Swiggy.

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Benefits of Hyperlocal Delivery Business Models

Here are some of the benefits associated with hyperlocal delivery business model

Supports traditional Stores

The rise of e-commerce and online retail has been a threat to traditional stores. Hyperlocal delivery models provide them with an opportunity to optimize their sales.

Minimal Efforts Required from Retailers

Retailers can enlist their businesses on their respective platforms and grow their business. Everything from pickup to delivery is managed by the app aggregator. Hence retailers can grow their business with minimal effort.

Helps build a sustainable ecosystem

The hyperlocal delivery model is environment friendly as carbon footprints as long transportations are reduced.

Single Device management

A single mobile app can help you track, control and manage the entire hyperlocal marketplace.

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Supply chain models of a hyperlocal business

Inventory-led model

The inventory-led model is where you source your products directly from the brands and sellers and create an inventory of them. In this model, you are playing a direct role in the hyperlocal market. You have to track the demands of your customers and manage your inventory accordingly. You have to direct a team to manage inventory accordingly.

Aggregator model

Aggregator model can also be called as zero inventory model. In this delivery model you act as connecting link between the retailers and customers to ensure last-mile connectivity and delivery.

How to build a Hyperlocal Delivery Network

Choose the product you you want to deliver or sell

Firstly, you need to decide what products or services you would choose to deliver. Hyperlocal delivery models have tremendous utility and scope for success in a wide variety of sectors –restaurants, medicines, grocery, cabs, and hyperlocal logistics. You can target the local geographical locations and analyze the demand for a particular product or service.

Identify your Target Audience

Study the response of customers towards previous businesses. Your target audience may be busy professionals who have no time to head down to a restaurant for a meal, or you may target senior citizens who are unable to walk to their nearest grocery store.

Market your product in your locality

Your marketing strategy depends heavily on your target audience. You have to make your presence known by trying out different advertising methods that appeal to your audience.

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Build local partnerships with delivery agents

Building  the network is an essential part of any business. in this you must create partnerships with two different parties – a delivery partner and the local merchants.

You could receive the customer's orders through your mobile app and ask the local merchants to send their delivery personnel to deliver the order. You can also opt for partnering with a delivery agency. Often delivery partners charge a fixed price per delivery and impose a minimum delivery cap.

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Decide on an Revenue model

Your revenue model depends on two sources – commissions from the merchant-partners and delivery charges from the customers. Your local partners pay you an agreed percentage of the order amount as commission on every order placed from their store. Your partners will be happy to pay you more if you bring them more business. You can charge your customers a convivence fee if you wish, as most businesses are providing free delivery services.

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Launch a hyperlocal mobile app

Now you need to start working on the platform. You need to build separate mobile apps for iOS and Android for each of the three parties – the merchants, the customers, and the delivery drivers. A feature-rich, user-friendly app plays a major role in creating a solid customer base.

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Due to lockdown restrictions many hotels and restaurants had to shut down, this was the the right time to get online, especially for offline merchants who were facing business ups and downs during this crisis. Many restaurant's took their business online as they saw it as a fully wise decision to starting with an online business, so that even after the COVID19 crisis, they can get better growth.

To survive and thrive in the industry, you need a robust admin panel, an efficient and effective customer tracking app, and a powerful delivery driver app. Furthermore, you should always concentrate on a consumer’s satisfaction. Measuring customer satisfaction should become your daily habit – not something you do from time to time. You can expect a massive growth of such businesses in the near future.

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