Q-commerce (Quick Commerce) retailers like Gorillas and Jiffy are exposing the ‘snail pace’ response of e-commerce by delivering grocery and essential items to homes in less than an hour! Not content with this advantage, their competitors are fiercely responding – with operators promising to be there in less than 15 mins!
Q-commerce is already taking a significant bite out of the £40b* C-store market and has the potential to damage the hospitality and grocery sectors, because it’s better on many levels.
A number of key questions answered…
Julian Grindey is an energising and inspirational MD/COO/Trading Director, and a UK-based Associate of Prof. Consulting Group. Julian is skilled in leading profitable change and transformation, inspiring strategic vision and commercial delivery, and in driving retail and digital growth. Proven in delivering exceptional growth from turnarounds and scale up, in key omni-channel operators, including private label and international product sourcing strategy.
Q-commerce is a natural evolution from e-commerce. Lifestyles are changing as is customer behaviour, meaning speed and convenience is even more important than ever before.
The characteristics and benefits of q-commerce become clearer when compared to e-commerce:
e-commerce – a wide product range that takes days to deliver by truck from a large distribution centre.
q-commerce – delivery takes minutes from a scooter or bike but the customer has a narrow assortment to select which may be picked in store or from a ‘dark store’.
So far 3 types of q-commerce operators have emerged and are characterised here:
So, how is Q-commerce developing in the UK?
Deliveroo and Uber eats are well-known players in the on-demand home delivery market and the pandemic enabled the ‘pivot’ into grocery delivery.
The surge in demand stimulated several new entrants to join them in the UK, and VC financing backing has created opportunities to fuel the growth. The market is developing fast in 5 key aspects:
Quick commerce Customer characteristics?
So how will it evolve?
Delivery speed – For a service that differentiated itself on delivery in less than 1-hour new standards are being set. Real-time product availability, choice, impulse and convenience will follow.
Barriers to growth – delivery charges and geographic coverage will slow customer adoption which will be neutralised by investment in cash and efficiencies.
Capturing market share – The short-term prize is £3.3b (approaching 10%) of the rapid growth on-line grocery sales channel. Conquer this and they will move on to other sectors.
Those ignoring the potential can expect their sales to suffer; those taking advantage, can ride the crest of the wave.
Many organisations won’t have the energy or expertise to take their business forward and survive the tide of change; and if they don’t, they need someone who does.
**Institute of Grocery Distribution (IGD) 2021.