COVID-19 has been a catalyst for on-demand shopping. But as the pandemic threat is becoming a thing of the past, will q-commerce players face unexpected challenges? eddress investigates on your behalf.
First of all, success stories speak for the popularity of q-commerce. Within a few months, companies such as Berlin-based on-demand grocery delivery, Gorillas, attracted $290 million at a $1 billion valuation in 2021. Gorillas became the first unicorn startup in Germany to achieve this status in under a year.
AgFunder report found that investment in e-grocery reached $18.5 billion in 2021.
However, comes 2022, and q-commerce ventures begin to experience the first profitability hiccups, facing market disruptions and the side effects of their capital-intensive model. Many companies have been forced to reconsider their options, from cutting down headcount to shutting down for good to increase contribution margin. While q-commerce is here to stay, you may need to rethink your strategy.
by Tara Winsted via canva.com
The need to manage operations and manual labor
To tackle operational cost and effort waste, you must consider the evolution of logistics and supply chain management throughout the years and how robotic solutions and automation can provide a solution that doesn't replace human activity. Indeed, as hyperlocal fulfillment models are coming down from the COVID-19 peaks, "delivery companies could trim losses by investing in technology like robotics fulfillment, enabling couriers to carry more orders per trip." — TechCrunch.
Additionally, our team at eddress came across this interesting thought by supply chain management and last-mile delivery expert, Brittain Ladd: "More importantly, delivery companies are now just realizing that the only way they'll ever be profitable is through the use of automation. Amazon has come to this conclusion hence the fact that the company's 'Next BIG Thing' is opening thousands of automated hyper-local fulfillment centers."
Robotics and automation as profitability wizards
So what does it mean to bring robotics and automation to supply chain management, and how can they improve profitability?
As the pandemic-related period of growth is coming to an end, companies must move away from the 'gotta-catch'-em-all' approach that contributed to high numbers of headcount recruitment, delivery vehicles, warehouses, and fulfillment centers. The pandemic strategy encourages waste and unnecessary costs. As business models need to change, technology investments could bring a much-needed solution:
- Robotics fulfillment to carry more orders per individual trip
- Autonomous, automated hyperlocal fulfillment services, such as the DoorDash robot's patent, to cut down human effort on the middle-mile delivery
Automation in the supply chain can be a game-changer that optimizes q-commerce operations. In fact, robotics solutions can not only reduce human errors, but they can also save time and money. In a quick delivery model, time is of the essence to guarantee deliveries under 60 minutes. Utilizing automated robots to manage multiple hyperlocal deliveries within a limited geographic radius can serve multiple purposes:
- Human couriers can act as contact points between robots and customers, maximizing loyalty and engagement.
- Robots can prepare multiple orders and arrange delivery to a local fulfillment hub, where human couriers can pick them up and deliver. This can save manual labor time and cost.
- You can manage a high number of orders with a small headcount, keeping your costs low.
what's next?
While autonomous systems are not a novelty, the unexpected q-commerce challenges are forcing companies to adapt quickly and embrace new tech solutions. In the future, we can expect delivery drones and robotics automation to become an integral part of the on-demand supply chain management. When will that take place? We believe this could be happening sooner than expected.
eddress, your B2B SaaS white-labeled marketplace expert, is committed to constantly researching new trends and concepts that would optimize q-commerce operations.
