The 3rd generation of commerce : Q-Commerce

July 07, 2022
17 minute(s)

While consumers embraced instant delivery during the pandemic, nearly $5,8 billion*1 was invested globally in “dark stores”. These warehouse-style distribution centres act as the bridge between online orders and fulfilment. They look a lot like supermarkets and convenience stores, without trolleys and front-of-house customers.
In the last decade, with the retail technology stack evolution, the delivery process leapfrogged from weeks to next day, blown minds with one hour shipment, and now you can have your order at your door within 15 minutes. As a result of the pandemic, delivery has leapfrogged forward, being the main component of Quick Commerce. The product of this evolution and consumers’ soaring expectations is quick commerce. 

Q Commerce meaning  

Quick-Commerce is on demand delivery used ideally for small quantities of goods to customers. Typically, with a waiting time of under one hour and for some brands as quickly as within 15minutes.
Bringing small quantities of goods to customers almost instantly, it tends to focus on the micro smaller quantities of fewer goods. Retailers have achieved radical progress in reducing delivery times by optimizing every part of the process for speed and efficiency. Advances in technology have enabled improvements in logistics solutions and simple automation. Additionally, machine learning has created intelligent operations, such as optimizing routes and enabling drivers to deliver several orders simultaneously. Making 15 minutes delivery possible. 

Seeing things from the bigger pictures, Quick commerce may seem like is based purely on delivery speed. However, some companies differentiate themselves based on the variety of products they stock and implementing a unique business model.
Currently, companies follow two Q-Commerce business models:  

  • Delivery only services – Companies like Delivery Hero, DoorDash, and Uber Eats partner with third-party retailers, such as convenience stores, supermarkets, and pharmacies, to deliver products ordered via their delivery platform. 
  • Vertically integrated operator – Companies like Gorillas, Zapp and Gopuff stock their own inventory in micro-fulfilment centres or dark stores that they have strategically located close to as many customers as possible. Typically, each dark store carries a curated range of around 1,000-2,000 items that companies can tailor to meet the needs of the areas they serve, although some are beginning to push these boundaries.  

Q-Commerce will become the standard as a result of customer needs and expectations. The tremendous growth in the market prompted businesses to develop automation and delivery solutions as soon as possible.

Turkey’s Getir was the pioneer of the Q-commerce business model. Launched back in 2015 as well as France’s Frichti, also founded during the same year, delivers groceries in around 16minutes to customers in France and now in Belgium.
Thus, and in 2021 right after the pandemic, we have seen an increase in the number of companies shifting to Q-Commerce strategy. As showing on this graph.

Q-Commerce ecosystem 

Start with the basics, Retail tech stack! (timsoft solutions)  

The first thing to consider is that Q-Commerce is primarily for retailers of everyday consumer products, selling consumer goods or household items. Which the user needs almost immediately like food delivery services. For that, a couple of logistical process needs to be included:  

  • Setting up the local hubs, Vertically Integrated Specialists: A local hub or warehouse is where picking up, packaging and delivering the products can be done at a faster and cheaper rate. It will add up operational efficiencies, reduce the extra miles / fuel cost, and will add up in less turnaround time. 
  • Keeping up with the stock: while choosing to get into the shoes of Q-commerce, need to carefully choose the stock and its SKU (stock keeping units) thing that goes hand in hand with an OMS (order management system).  
  • Stockpick: A real game-changer. No need to dedicate a well-trained staff to locate the right product, the right variant and right flavour. With only one skilled person who knows how to run the scanner over the product barcode. 
  • Inventory and supply chain management: the bedrock of Q-commerce. Implementing a flexible online orders and inventory management solution to receive orders from consumers through mobile or web, accurate order picking solution to fulfil the orders quickly. An essential part of the equation. Real-time inventory management tools will have a critical role here, constantly updating the status of inventory, calculating and estimating times for delivery and freshness of products. 
  • Integrated delivery management application, Third-Party Delivery Platforms: to assist delivery executives to reach the destination with no follow-ups. Or collaborate with existing delivery platforms who deliver items from neighbouring retail outlets, usually just fulfilling delivery or picking the order. 
  • ERP integrated online order management platform: to manage the entire e-commerce operations. Once a customer orders a product, it would convey it faster to the responsible staff so they can pick the right product without errors. 

The right combination of technology, infrastructure and a focus on customer experience can lead this growing market to evolve rapidly in the current environment. 

In today’s highly competitive market, earning customers’ loyalty and providing a high standards customer experience is a must. Businesses that want to evolve to meet increasing customer expectations for instant delivery now have a wide range of options and investing appropriately in quick commerce solutions can provide them with outsized returns for both customer acquisition and retention.