Hyperlocal Retail

Why Are Hyperlocal Retailers Winning in the E-commerce Space?


Hyperlocal retail has emerged as a leading strategy during the growth spurt experienced by the e-commerce space during the last two years. During this period, both retailers and consumers have leveraged digital technology in order to adapt to recent changes in the retail world.


But despite an increase in e-commerce sales of over 110% over the past two years, the growth of new customers have been slowing down and stabilizing. 


We can trace back a trend in restaurant aggregators such as Zomato or Dunzo – these brands realized that hyperlocal retail was going to make waves and set up their infrastructure in the early 2010s. This helped result in a 56% increase of online food orders in 2019, even before the pandemic doubled e-commerce numbers.


The concept behind hyperlocal strategies was to maximize consumer convenience and provide a direct line for merchants and customers to interact with each other, all in the hopes of increasing customer loyalty.


Research has found that only 15% of total users are considered as customers loyal to certain brands, and they only account for 20% of a brand’s sales. On the other hand, 60% of total revenue is said to be generated by spontaneous shoppers.


Since a huge number of options in terms of both brands and products have emerged, there is a huge market of consumers that can be won over by retailers who understand the importance of the smallest details.


Let’s take a look at three advantages hyperlocal retailers have over e-commerce brands:


1. Proximity


Hyperlocal retailers capitalize on one simple concept: they operate and dedicate their services in a deliberately strategized physical location, hence the term “hyperlocal”.


This addresses the first concern of consumers who are jaded by too many options found in the e-commerce space: they are looking for same-day transactions.


Since the competition in the e-commerce space is about reducing delivery fulfillment time and shipping costs, consumers have started also expecting more: with the advent of hyperlocal marketplaces, buyers can now shop for food or items and have them delivered to their doorstep within hours. 


2. Service


Communication between merchants and consumers is flexible through hyperlocal retail – merchants can input their locations where they can ship their products, and consumers input their area in order to view the available merchants.


Since the consumer is aware of the whole supply chain process, they can exert more control over the process of fulfilling a transaction. Consumers are able to know where a product is sourced from in case there are any maintenance-issues, and they are able to easily track the progress of an item.


As a result of the first two advantages, hyperlocal retailers enjoy a greater amount of trust from customers.


The physical proximity between merchants and customers helps to create a bond that is not found within online transactions. This allows brands to create meaningful and long-term relationships with clients through an increased level of attention and care exhibited by both parties to one another.


Furthermore, because customers are given more visibility on the supply chain process, the ensuing relationship between customer and merchants becomes more collaborative rather than transactional. 


Customers can put a face to the brands that they interact with, and they actually understand the supply chain process enough as they are a part of it.


These values indicate that the gap between online and offline is lessening, and consumers are evolving such that they don’t need to prefer one over the other – long gone are the days where they have to choose.


Now and into the future, consumer loyalty depends on how brands are able to rise to the expectations of their customers. The sudden spike in online activity is inevitably giving rise to an increased desire for customers to have personalized experiences beyond what the digital space can offer by itself.


As an answer to this desire, hyperlocal retail has emerged as one of the forefront strategies to create a much needed connection between retailers and customers. 


And with the hyperlocal delivery industry projected to increase from a worth of $1324 billion in 2019 to $3634 in 2027, it’s easy to see why hyperlocal retailers have been reaping massive amounts of success as of late.


Omnichannel strategies are integral to hyperlocal retailers. Check out more on how you can use them to drive loyalty here!

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