Hyperlocal Delivery Solves Retail Challenges Related to Rising Fuel Prices, Speediness

Supply chain challenges are nothing new for businesses of all kinds, especially retailers. Rising gas prices have added fuel to that fire, increasing the price of getting goods to their destination. One emerging solution is hyperlocal batching and fulfillment, which reduces the distance goods must travel and the total delivery miles driven. Ultimately, this strategy lowers the number and cost of deliveries while also speeding up the time it takes for recipients to get what they've ordered.

What’s more, because hyperlocal delivery doesn’t always require large commercial vehicles, the option is there to use energy-efficient vehicles. Today’s technology enables local delivery platforms to provide on-demand, same-day or scheduled delivery services for businesses in dense metropolitan areas using bikes and cars, including eco-friendly ones. According to the Union of Concerned Scientists, tailpipe emissions from vehicles are a leading source of air pollution in cities like New York, so getting products delivered with minimal environmental impact is a way to appeal to consumers who care about doing business with companies that have a conscience.

Going small isn’t only better for the planet in terms of carbon dioxide emissions and fuel consumption — it’s good for retailers and consumers alike. In crowded cities where navigating and parking large delivery vehicles may prove difficult, using smaller vehicles just makes good sense.

During the pandemic, consumers turned to online ordering and delivery services in record numbers for everything from prepared meals and groceries to durable consumer goods. And while some logistics researchers predict a post-pandemic dip in the need for hyperlocal delivery services, such predictions came before gas prices began their alarming rise this year.

By bringing inventory closer to their customers via micro-warehouses near dense consumer bases or leveraging store inventory for efficient e-commerce fulfillment, hyperlocal delivery services don’t just lower costs for retailers. They also offer consumers added convenience — saving them time, gas money and more. That represents a double win in terms of savings and convenience.

For retailers that can offer hyperlocal fulfillment, an added advantage is speed over other retailers that might be shipping goods from across the country or overseas. That speed can mean a better overall customer experience, which builds brand loyalty. Instant gratification aside, the fact of the matter is that sometimes speed really matters to consumers. Take, for instance, a lost cell phone. For a consumer who uses their phone for business purposes, getting a new phone that meets their needs fast is an absolute must.

Most of us are familiar with the hyperlocal delivery model thanks to Amazon.com. However, the online retail giant is no longer the only big player. Companies like Walmart and Chewy have jumped on the hyperlocal delivery bandwagon, getting goods to consumers the same day or next day.

Walmart and Amazon are now even offering their fleet to other merchants, adding to their fleet's utilization efficiency. Combined with a significant uptick in consumer interest in electric vehicles as gas prices continue to climb, a trend is emerging.

As global instability and dwindling fossil fuel resources continues to be an issue, electric vehicles will play an increasing role in the logistics industry. Consumer awareness of environmental issues will likely continue pushing companies towards greener fulfillment solutions, putting hyperlocal delivery companies ahead of the curve.

Evolving technologies like machine learning, real-time tracking, and AI-driven data are also revolutionizing hyperlocal delivery. Software that integrates with many platforms with ease and accuracy can help businesses streamline their fulfillment operations. Paired with micro-hubs and energy-efficient vehicles, it’s clear to see why retailers are increasingly turning to this delivery model.

Nancy Korayim is the founder and CEO of MetroSpeedy, a technology-based local delivery company providing on-demand, same-day or scheduled delivery services.