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by Ordering on Jan 19, 2022 12:16:44 PM
Every day, a new word is introduced to our vocabulary—a new business concept, an idea that hasn't been tried and tested. The world has gone into risk mode, and hyperlocal marketplaces are the latest trend.
There are so many startups cropping up that it has become customary for those that didn't even want to trade.
People that would not have imagined beginning a business before have started to venture into the world of entrepreneurship.
They compete with their friends that have also ventured into the depths of the unknown dark and murky business waters. The internet and how we trade have contributed to this new mindset considerably.
Hyperlocal marketplaces are merely what used your local stores in your area be. Local stores can offer you their products via a more ethical and more accessible trading method, the online marketplace.
Let's face it, standing in queues is a thing of the past. As is wasting your time walking to the store or driving and carrying your items around, packing them into your vehicle to get them home.
Time-saving is the new thing and if you want to stay afloat and not get drained out in today's fast-paced world, ordering online is the way to go.
Hyperlocal marketplaces are selling with so much traction that customers don't even want to return to the old traditional trading style.
Bricks and mortar stores are now becoming empty shells with delivery men waiting outside, ready to distribute the goods via the delivery addresses and orders printed out by a printer!
The only people inside stores nowadays seem to be the packers that carefully pick and pack the items ordered online via mobile phone applications, ready to send to the customer's address of choice. When you can order items online, life is simple.
Hyperlocal Trading Is Efficient
There is a lot more efficiency with hyperlocal marketplaces, and the internet ordering phenomenon is not about to slow down any time soon.
Third-party logistics companies are also teaming up with businesses to deliver their wares. There is a massive partnership of delivery people, and the streets are busy with delivery men eager to distribute the goods to the consumer and pack a source of income.
The growth of hyperlocal businesses has shot up in the past two years. There doesn't seem to be any sign that it is slowing down; what was once considered a temporary trend is now a lifelong reality and a new mode of trading that will be around for years to come.
To be successful, you have to keep up with the trends, and just about every business that has products or services to sell has started to trade via online marketplaces to stay afloat.
When we discuss marketplaces, bricks and mortar stores are a shell of what they used to be. There is an experience for the customer to walk in and see and touch the items. Now bricks and mortar stores are becoming a ground for delivery drivers to pack the items.
What once used to be queues of customers waiting to take their very own goods back to their homes has become a line of delivery drivers checking out to deliver the goods to the consumer that has ordered via an online mobile phone application.
Of course, physical stores still need to be in place, but with the help of hyperlocal businesses. Here is why:
● A percentage of customers still visit the physical stores after ordering online. They do this to see the items and feel for the products they will call the next time they use the application.
● Local stores fill their inventory for hyperlocal platforms in-store. So both concepts of trading, hyperlocal and physical bricks and mortar, depend on each other.
It is like a game of ping pong back and forth. Hyper-local marketplaces get sales, and inventory for hyperlocal marketplaces is managed from bricks and mortar stores.
How Sustainable Are Hyperlocal Marketplaces?
When marketed well, they are highly sustainable, like anything we do in life. A lot of cash is spent offering customers offers and discounts.
The old cash-off and discount coupons have not gone. It has simply changed hands and ventured into an online form instead of a printable paper coupon.
Profits are determined by customer costs, delivery, and acquisition of customers. Profit has to be earned, and there is s a lot of completion; it is by no means easy, but then again, nothing in life is. Many stores have a minimum order to ensure that each store is profitable.
Is A Hyperlocal Marketplace Sustainable?
Hyperlocal marketplace enterprises burn colossal cash to acquire customers by offering discounts. The main issue is to earn the profit on each delivery.
Unfortunately, the order ticket size is not too big, raising the problem of making a considerable profit margin. The margin per order for the hyperlocal marketplace is 5-10% of the order ticket size.
Adding more, customer acquisition cost, delivery cost, and overheads make it difficult for the hyperlocal marketplace to profit. The best way to grow a hyperlocal market is to enhance customer retention rates and increase order ticket size. Also, customer retention is highly relied on.
Customers must make repeat orders and return time and time to ensure that profits continue to grow.
This, however, is not difficult as you can use numerous methods to do this:
● Loyal customers earn more revenue from the hyperlocal business structure.
● Word of mouth marketing is vast, and customer retention is vital to success.
● When you engage with your customers through every ordering process, they will provide feedback on the rating system.
● It is easier to keep customers you already have and make them return time and time than find new customers.
● When customers have ordered before, they will respond to your promotional offers with ease and trust what you have to offer.
