As the usage of smartphones increases, entrepreneurs are eyeing this as an opportunity to dive into targeting consumers on a microscopic basis, something we call going hyperlocal. Since the start of the year, investors have pumped $150 Mn into 20 food-ordering (and food-delivery) startups. This is a proof that hyperlocal is the new wave and is here to stay.
How Hyperlocal is Sculpting the Landscape
Online Stores go Brick-&-Mortar
Like ecommerce entrants had once threatened local retailers, hyperlocal businesses (mostly m-commerce) are beginning to threaten ecommerce, now, their slower ancestors. To counteract this, many ecommerce players like Amazon, Flipkart, Paytm, SnapDeal have launched their offline stores not only as a convenience pick-up store, but also as supermarkets for items with low shelf-life like groceries in the form of Amazon Kirana, Flipkart Nearby, Snapdeal Instant.
Simultaneously, hyperlocal m-commerce players, like Grofers and Peppertap, are opening up their offline stores.
Stores Going Online
Hyperlocal brings a breeze of relief for local retailers too. With ecommerce players tying up with local stores for time- and cost-effective product procurement, there are also platforms like Zopper, who are bringing in trusted local retailers online for efficient post-sales service too.
“Zopper is an app that allows a customer to choose the retailer with the best price for a product, from over 500,000 online and offline retailers, thus creating a unique shopping experience. It caters to the urban mobile-savvy consumer, who wishes to find the best local deals through pricing and product comparison,” says Neeraj Jain, Co-founder and CEO, Zopper.
The Flaw With Hyperlocal
From the above discussion, two kinds of hyperlocal players emerge out of the scene: one who source from local stores, and the other who create their own inventories and deliver them.
Now, the flaw with hyperlocal in the first case is that you are the one doing all the running with wafer-thin margins, and if you are the second one, then you are limited by the number of offline stores you’ve opened or tied up with, and again single-digit margins (due to hefty online discounts).
Even though funding is not an issue, expecting customer loyalty in a picture flooding with hyperlocal players is like asking for the moon.
Holding Your Throne in This Landscape
We fathom that making your ecommerce store go hyperlocal as per the trend cannot be pulled off overnight, but personalization of those local orders is something you can do. This means that you try to take the Alibaba’s Taobao way – tie up with local retailers and local feet-on-the-street services like Flipkart did in Mumbai with local stores and dabbawalas community.
Keeping in perspective the exponential growth of hyperlocal services in 2015, it wouldn’t be wrong to say that hyperlocal is about more than just the place. It is about the time and about the person. This brings us to personalization.
Realize that most of the upcoming businesses are built around habit formation, consumer convenience and delight. So delighting your customers is the only way you can retain them and keep them loyal to you.
Tag Your Products With Their Order Frequency
Find out which products need to be replenished weekly, fortnightly or monthly. Apart from groceries, the list will include FMCGs like personal hygiene products, cosmetics, school & college stationery, regular medicines, household items like laundry, detergents, etc.
Now target your customers with custom-made weekly, fortnightly, and monthly shopping lists. This will add a personalized touch to your messages and lead to higher AOV and profitable deliveries.
For example, if a customer orders a packet of Surf Excel every two weeks, then send a fortnightly reminder with a recommendation to purchase 2 packets for the whole month on discount.
Design a Geo-targeted Daily Deal
Plan some time sensitive deals for a specific area.
For example, you know that your delivery fleet is going to be in a specific area tomorrow morning. Then, you can notify customers present within the 2 mile radius of that location to order anything from the site during a specific hour, say tonight between 8-10 pm, for college stationery and get free express shipping.
This will help you radically cut down on your delivery time and costs, whilst surprising customers with a superb deal and fast delivery.
If you can, go Hyper-personal
Food ordering app, FoodPanda, could diverse in future somewhere on the steps of PlateJoy, a US-based healthy food service.
The service upon login, asks you a number of questions related to health goals and diet and then custom-prepares a weekly diet plan for you, along with the checklist for products you’ll need to buy. FoodPanda is already into ordering and order fulfillment business and this could be its next course of action.
After a week, PlateJoy replans your diet schedule and helps you keep your health on track.
As the lines between brick & mortar stores, m-commerce and ecommerce fade away, there lies a huge scope of innovation and experimentation in the unorganized areas of retail. The more you innovate, the more you can set yourself apart from your contemporaries.
Nonetheless, what will save your day in the end is your customers’ loyalty, something that cannot be bought through discounts. This can only be won through mutual trust, a spotless record of good service, and by providing individual attention to customers’ individual needs.
Download an interesting research on what works (and what doesn’t) in email marketing for ecommerce by TargetingMantra.