Q-commerce explained: essential guide to quick commerce for business

Online shopping has transformed customer expectations of retail, and in its most recent evolution, it’s evolved into quick commerce. With it, delivery times have shrunk from days into hours and minutes, harbouring a new era of instant gratification for customers.

However, as q-commerce grows, so do customer expectations. For new q-commerce businesses entering the market, there’s a real pressure to consistently outperform each other.

During the COVID-19 pandemic, quick commerce emerged as a quick and safe delivery option during lockdown. It’s since become a matter of convenience for plenty of UK consumers. The more people work from home or find themselves strapped for time to walk to the corner shop, the more demand there is for quick deliveries of things like groceries.

However, jumping into the world of ultra-fast deliveries can be daunting. To help you out, we’ve put together this q-commerce crashcourse to catch you up to speed so you know if this is the business model for you.

What is Quick Commerce?

Quick commerce is the Fast & Furious edition of ecommerce. Basically, it’s all about speed and getting your products to your customers in a matter of hours, if not minutes.

This type of business model is usually reserved for small orders, so think about a small grocery shop or an ingredient someone unexpectedly ran out of for making dinner.

Since you’re supposed to get your orders to your customers’ doors as quickly as possible, quick commerce businesses rely on a net of local warehouses and two-wheeled delivery teams.

This makes it easier to prepare the orders and deliver them. From the customer’s perspective, quick commerce is all about urgency and convenience (and sometimes, even laziness). If getting to the corner shop feels like a Herculean task, speedy riders are there to save the day with q-commerce.

Q-commerce vs traditional ecommerce

Although they belong to the same family, q-commerce and ecommerce are differentiated by one very important factor: speed. Whereas traditional commerce, at best, delivers products within one or two working days, q-commerce gets things to your mailbox in hours or minutes.

To keep up within the speed limit of q-commerce, this business model relies on micro-fulfilment centres based in densely populated areas so you can easily get things to your local customer base as quickly as possible.

Traditional ecommerce relies on larger warehouses unlikely to be close to your product’s final destination.

Because of this need for speed and smaller warehouses, q-commerce businesses tend to focus on more niche product offerings, compared to more generalist ecommerce.

Therefore, to triumph in q-commerce you need to have a razor-sharp understanding of what your customers are more likely to have an urgent need for.

Benefits of q-commerce for businesses

For customers, the speed and convenience of q-commerce make for obvious benefits. But, for business owners considering a quick commerce launch, there are plenty of upsides, too:

• Build your unique selling point → as technology improves and ecommerce businesses get better at personalisation, you need to find a way to set yourself apart from the rest. Q-commerce makes one big difference: speed. The faster your deliveries are, the easier it’ll be to attract customer loyalty and make a name for your brand.
• Potential for greater margins → although getting into q-commerce means treading a fine profit line, if you do your market research well, you may position yourself to have generous margins. For instance, quick commerce usually works well with a smaller offering of products. If you gather enough customer insight to know exactly the products they need, you’ll become the most popular kid in the local q-commerce block. Keep in mind, you’ll usually appeal to a wealthier demographic who are willing to pay high percentages of delivery fees relative to the product cost since they’re after convenience, rather than discounts.
• Effortless customer experience → Quick commerce can be the fast lane towards customer loyalty. After all, you’re targeting one of the most popular pain points: speed. Convenient and speedy deliveries are easy ways to prove yourself to clients. If you can nail a 30 minute delivery, customers quickly figure out you’re reliable, and will put you on their A-list. Therefore, you don’t have to wait for a customer to trial your product for months to convince them you’re worth their time – it can be as easy as just getting that one delivery right.

How does Q-Commerce Work?

If you’re considering setting up a q-commerce business, you’ll need to be aware of how the model works. Keep in mind the set up can involve high starting costs. After all, you must establish the necessary facilities and network of local carriers and warehouse staff to guarantee ultra-fast deliveries.

Here’s how the logistics are all glued together:

• Local hubs → these tend to be located in densely populated areas close to your target audience, so q-commerce definitely works best in urban, rather than rural, areas. Therefore, you’ll be looking at employing riders or drivers from your local community to deliver your products.
• Your stock → there’s a reason why q-commerce is most famous for delivering food, drink, and other groceries. Quick commerce works best with very specific types of products. So, you’ll need to curate your offering carefully. It makes sense to focus on consumer packaged goods (CPG) that are used on a day-to-day basis. You’ll also want to put your Gen Z cap on, as the wealthier bracket of this demographic will likely be looking for quick and convenient deliveries.
• The software → there’s little room for error in the world of q-commerce. Having a bug in your inventory system can mean a customer gets their order too late or not at all, giving you a bad reputation. Therefore, you should do your research to find out which POS systems are best at inventory management. Price and inventory monitoring provide stock level oversight across your entire retailer network so you can reorder or redistribute items without delay.
• The data analytics: understanding changes in purchasing behaviour and trends is crucial with q-commerce. You always need to be ahead of the trend to stay quick and competitive. Therefore, you’ll want to have your hands on a platform that gives you genuinely valuable and useful insights on your customer base. The shiniest new tool for this is undoubtedly AI. Rapid advances mean AI is better than ever at taking data, creating forecasts, and saving you the time of having to do it manually yourself. Tools like Tableau or Microsoft Power BI are great options.
• The user experience: the easiest you make it for a customer to find the product they’re after and put it in their basket, the easier it’ll be to foster loyalty. Therefore, a key ingredient of a successful q-commerce site or app is a top-notch ecommerce platform. You’ll want to find one that easily integrates with your POS software. For instance, Square Online already comes equipped with its own Square POS, making a great team.

Is Q-Commerce Profitable?

Q-commerce is known for delivering a niche of consumer packaged goods like groceries in record time. The business model works on a formula of fast turnaround times coupled with low margins and high delivery costs, which can lead to excessive cash burn at the early stages.

Therefore, to take off, q-commerce requires having deep pockets and a willingness to see through the first few years. It takes resolve to have a shot against the competition and to develop your brand.

Whether you are able to walk the quick commerce tight rope hinges on your ability to adopt the right technology and understand consumer behaviour and the market.

Rocky market for q-commerce

According to a study by KPGM, the current landscape for quick commerce is looking slightly treacherous. Cutbacks in staff by q-commerce giants Getir and Gorillas certainly is not a good omen, and is the symptom of wider market complications.

Inflation and the cost-of-living crisis have motivated some to make that run to the grocery store rather than resorting to deliveries with added costs.

Q-commerce newcomers need to think about which gap in the market they’re trying to fill with their product offering so they can remain competitive. Copying and pasting the business set up of existing q-commerce companies will not be a recipe for profitability.

Technology as a dealmaker

Technology is a key ingredient in helping your q-commerce business take off. This could influence your ability to absorb AI to produce data-backed sales forecasts, or using a POS system that seamlessly integrates into your operation.

Q-commerce is heavily reliant on speed and accuracy. Therefore, you’ll need to get comfortable with automating processes and feeling comfortable with new technologies that will help you acquire and retain customers.

That means technology will be one of your biggest investments and ongoing overheads – but it’s a vital one to get right.

Examples of q-commerce businesses in the UK

The UK is ripe with examples of q-commerce businesses that are helping establish the business model in the e-commerce arena. Examples include:

Gorillas

Gorillas delivers groceries to your door in minutes and already has operations set up in the US, the Netherlands, Germany, France and Denmark.

The German-born company charges a flat rate for delivering all things you’d find in a supermarket.

It has become a popular option as the most recent statistics show that in 2021, an average of 900,000 people used the app at least once a month. You’ll probably recognise the advertising with its bright red colour against a black background featured in ads that appeal to Gen Z and millennials.

Zapp

Promising to deliver groceries in under 60 minutes, Zapp is another q-commerce giant in the UK.

It has a partnership with Deliveroo, which means you can order your weekly shopping directly from the delivery app.

Zapp is a great service for customers who perhaps forgot something on their grocery list and don’t want their dinner plans to get derailed by a missing ingredient. Recently launched in 2020, the company’s latest deal landed them $22.6m in funding.

Getir

Getir aims to target the pain point of having to wait for a delivery slot if you’re ordering your groceries from the likes of Tesco or Sainsbury’s.

If you need something now, Getir aims to deliver. To stay competitive in the midst of economic recession, Getir recently announced an up-to-50% price reduction on hundreds of luxury and essential items.

The brand is great at reading the market and understanding how to acquire and retain new customers.

Conclusion

Q-commerce’s rapid advances show how ecommerce is constantly evolving and of how important it is to cater to customer pain points.

In the constant chase for convenience, buyers want to engage with companies that will save their dinner plans last-minute, or that will deliver that one toiletry you need to survive the day.

There are some big names in the space already, but there is definitely a market for those looking to break into quick commerce – particularly if you can identify a compelling niche.

However, keep in mind that q-commerce is not for the faint of heart.

It requires you adopting state of the art technology to minimise your error margin and constantly analysing the market to understand how consumer behaviour is shifting.

However, if you manage to nail this, you’ll be able to foster customer loyalty. Although the market is competitive with giants like Zapp and Getir, if you explore which gaps in the market you can fill with your product offering, you could become the next big name in the q-commerce-verse.