April 18, 2024
Quick E-Commerce

Speeding Up Sales: The Rise of Quick E-Commerce Solutions

The way consumers shop and receive goods has evolved rapidly in recent years due to advancements in technology and changing consumer behaviors. One area that has seen tremendous growth is quick commerce, otherwise known as quick delivery e-commerce, where consumers can order a wide variety of everyday essential items and have them delivered within just one hour. While quick commerce started in major cities like London and Birmingham, it is now spreading across the UK at a rapid pace.

The Demand for Instant Gratification

One of the major drivers of quick commerce’s popularity is consumers’ increasing demand for instant gratification. In today’s world where everything is available at our fingertips with just a few clicks or taps, consumers have grown accustomed to getting what they want immediately. Traditional delivery windows of one to two business days no longer satisfy this desire for immediacy. Quick commerce addresses this need for speed by delivering items within 60 minutes or less of ordering. This transforms everyday items like milk, bread and snacks into something that can be obtained just as quickly as a takeaway meal.

The Convenience Factor

Besides satisfying demand for instant service, Quick E-commerce (Quick Commerce) also introduces a new level of convenience for busy consumers. With hectic modern lifestyles, people often find themselves needing something small like breakfast or laundry detergent with little time to spare. Quick delivery services eliminate the time and effort required to shop in-store, allowing items to be procured from the comfort of home or office within the hour. This level of convenience has made quick commerce popular for last-minute, impromptu purchases as well as planned daily and weekly essentials.

Technology Enables the Model

While demand and convenience drive adoption, it is technology that truly enables the quick commerce business model. Sophisticated cloud-based inventory management systems allow retailers to optimize stocking across micro-fulfillment centers located strategically in cities. AI and machine learning power predictive analytics to anticipate demand hotspots. Purpose-built applications give consumers a seamless shopping and delivery experience from start to finish. Meanwhile, compact fulfillment facilities and electric vehicle fleets ensure orders can be picked, packed and delivered at lightning speed. Technology reduces inefficiencies, allowing quick commerce services to run profitably while meeting lofty customer expectations.

Growing Competition in UK

Spurred by consumer demand and enabled by technology, competition in the UK quick commerce sector has intensified over the past year. International heavyweights like Getir and Gorillas have set up operations in the UK, introducing and expanding the concept to new cities. Homegrown players like Dija, Zapp and Flink have also emerged to capitalize on the growing trend. Retail giants Tesco and Sainsbury’s launched their own 15-minute delivery services in response. Competition is fierce as operators race to scale operations, expand geographical coverage, lower delivery fees and prices, and offer additional products and value-added services. While competition heats up, it also serves to further raise awareness and mainstream quick commerce among UK shoppers.

Business Model Evolutions

As the industry matures, business models are evolving in tandem. Early loss-leading strategies focused almost entirely on growth and share gains. Today, operators are improving unit economics and moving towards profitability. Many have exited low-margin food categories to refocus on high-margin consumables and are experimenting with alternate revenue streams like advertising, vending machines and subscriptions. Partnerships are commonplace as well – quick commerce firms increasingly join forces with retailers, restaurants and delivery companies to access infrastructure, inventory and customers. Others are expanding into new categories like alcohol, medicines and electronics. As financial backers demand returns, continuous innovation will be crucial to long term success in this highly competitive industry.

Changing Retail Landscape

The ascent of quick commerce represents a significant shift in the UK grocery retail landscape. Traditional supers and convenience stores accustomed to multi-day delivery windows now face intense competition for frequent top-up sales. Their ability to match the speeds delivered by specialized quick commerce players is limited by scale and legacy infrastructure. Pure online grocers too have to rethink strategies to incorporate hyper-local and instant fulfillment capabilities. Retailers will need to explore partnerships, acquisitions and deploy micro-fulfilment centers themselves if they hope to capture a share of the quick commerce opportunity. The segment will put further pressure on brick-and-mortar footfalls and basket sizes. However, collaborations also promise benefits as quick delivery expands the catchment areas of physical stores. Certainly, quick commerce heralds massive disruption – and opportunity – for all retailers.

Consumer Adoption Trends

Encouragingly for operators, surveys indicate quick commerce adoption is steadily rising among UK consumers. Nearly 1 in 5 shoppers have now purchased via a 15-minute delivery service, up from just 1 in 10 a year ago. Usage is highest among Gen Z and millennial urbanites who make up the majority of quick commerce customers. Lower-income households also appear to be embracing the model for affordable daily items. Going forward, expanding geographical coverage into suburbs and small cities could unlock a much broader consumer base. Widespread 5G coverage and innovations like drone delivery also promise to enhance access to services. If retention rates hold, quick commerce has impressive potential to revolutionize grocery shopping for millions across the country within the decade.

*Note:
1. Source: Coherent Market Insights, Public sources, Desk research
2. We have leveraged AI tools to mine information and compile it