How Will Q-Commerce Disrupt the Restaurant Industry?

Q-Commerce has become a growing trend over the past few years. It has irrevocably altered the way businesses operate worldwide now. Despite the emerging threats and impending challenges, it was also full of opportunities that allowed organizations of all sizes to rethink who and what they are fundamental to.

In the weeks following COVID-19, there was no question that lockdowns hit online behavior harder as demands for basic goods increased due to the global lockdown, causing habits to change and form that may last post-pandemic. The speed, choice, ease, convenience, and safety of online delivery platforms quickly gained customers’ attention.

What is Q-Commerce?

There’s a lot of buzz around quick commerce, or Q-Commerce, in all corners of the food industry. Creating a delivery model that responds to consumers’ needs for responsiveness and convenience.

The entire buying process is transformed by Q-commerce, from the initial spark of interest to the delivery rider knocking at your door. Despite being a form of E-commerce, Q-commerce has much shorter turnaround times between order and delivery. Instead of waiting days for a product, customers receive their orders within one hour, sometimes 10 minutes. 

Consequently, Q-commerce has been dubbed the third generation of e-commerce. The new benchmark will be on-demand, immediate deliveries.

However, a pandemic was never the initial catalyst for Q-Commerce. During the pandemic, the surge in online orders served as a tailwind for Q-commerce. 

How do Quick Commerce models differ?

Quick Commerce operates in two basic ways:

• Platforms: Intermediaries or specialist companies that facilitate quick delivery of goods. They generally do not own inventory but partner with existing stores (and other businesses, e.g., food service) to fulfill and deliver orders to consumers. 

• Q-commerce retailers (apps): Businesses that own and manage their end-to-end operations, including purchasing inventory, storing it, picking it up, and delivering it.

What Does it Mean for the Food Market? 

Further disruption in the food retail sector is thus inevitable. After discounters became dominant and local suppliers and the internet became more readily available, fast delivery services will likely become the third big disruptor of the industry – with profound implications for online and convenience businesses alike.

Fast delivery has only been adopted slowly so far by food retailers. Partnerships with suppliers are often at the core of those companies. The short-term profits they receive are, however, short-lived. Instead, it would be more prudent to accept a stake in return for cooperation, such as a replenishment option and binding cooperation agreements.

The market share percentage of quick commerce will reach double digits, and it can also be profitable in the long term. That does not mean discounters, supermarkets, and stationary retailers’ e-commerce models are doomed. However, competitive pressure increases, especially since customers no longer plan their purchases according to old-fashioned stationary logic.

Q-Commerce on the Horizon

A busy lifestyle, small households, urbanization, and aging populations are four things that traditionally cause a need for speed and convenience.

Pandemics have exacerbated these needs, particularly as they pertain to commerce. As a result of social distance and the prevalence of working from home, consumers are less likely to drop into a physical store nowadays. This makes convenient commerce delivery all the more appealing.

By providing SMEs with more opportunities to grow their business, allowing new players to enter the market, and for existing companies to expand and reach a wider audience, Q-commerce created more economic impact than simply providing fast food and grocery delivery to customers. Moreover, it offered a natural evolution of Q-commerce to expand into new areas.

To make Q-commerce a viable and scalable business model, we must witness a major change in customer behavior. Customers must see Q-commerce’s unique ‘immediacy’ value and be willing to pay more for products and delivery because Q-commerce can respond promptly to their needs.

As for businesses, this further means; investing in becoming an exceptional micro-fulfillment logistics brand that delivers on time and delights your customers with the service to stay competitive and respond to competitive pressures from these powerful, scaled aggregator platforms.

Meet the New Demands 

Modern consumer lifestyles, technological advances, and business models have evolved. Speed and convenience have taken on greater importance. But one thing remains constant: brands go to where their customers are. Every day, consumers search and browse delivery apps to shop online, and just a few clicks put them at the end of the purchase process. Choosing the right strategic fit and operational requirements is key to setting up your brand for success. Take the following factors into account:

• Assortment

Being available to customers and meeting their expectations can’t be overstated. For brands and retailers to optimize product listings, they need to understand the algorithms of delivery platforms. To achieve higher sales and overall margins, brands should focus on their top products or key SKUs frequently purchased, priced consistently, and rated highly.

• Knowing Your Audience

Profitability is a brand’s primary business goal and minimizing margin erosion. A commission is charged by delivery platforms, which can either raise the price of products or reduce margins. In other words, the right pricing of SKUs depends on knowing what an addressable audience is willing to pay.

• Branding and Marketing

Different delivery platforms provide different experiences and partnerships, which may leave brands without control. Brands must determine their engagement strategy and narrative with customers in the long- and short-term.

• Digital Marketing Assistance

Platforms are increasingly integrating advertising solutions into their apps. This platform restricts the sharing of customer data, like other marketplaces. At the same time, brands and retailers can work together in data-sharing agreements to facilitate precise targeting via different channels such as social media. However, they can also provide SKU-level reports to retailers for business intelligence and advanced measurement.

Q-Commerce is the Next Staple of Convenience 

As well as bringing ultra-fast service to customers, quick commerce has a lot to offer to brands who utilize it. The following three points are quick commerce’s top advantages for brands:

• An Innovative USP

Businesses can benefit from Q-commerce’s unique value proposition, making them stand out from their competitors. The customer may be willing to order from new stores or try new products if they need immediate delivery. As well as competitive advantages with significant multinational marketplaces such as Amazon, quick commerce offers online retailers the convenience of competing with brick-and-mortar stores.

• Possibility of Higher Profits

For those who can use quick commerce to their advantage, it holds a great deal of potential profit. A Deloitte study found that 50% of shoppers spent more money for convenience during the pandemic. A separate fee was charged for on-demand fulfillment and in-store pickup (BOPIS).

Retailers can drive sales for their most profitable lines by utilizing Q-commerce’s association with a smaller selection of products. Additionally, convenience is often more appealing to wealthy demographics. In particular, time-crunched professionals and business leaders tend to value comfort more than savings.

• Providing an Unparalleled Customer Experience

Fuel up your brand loyalty with quick commerce. Fast-moving consumer goods can address all your customers’ problems. This can save the day for a party host who runs out of food or an uncle who forgets to buy something for his niece. Or it can help someone who cannot reach a store to stock up on essentials. Could there even be a doubt in the minds of customers?

Trends in Q-Commerce in 2022

Sustainability and eco-friendliness are primary.

With sustainability and net-zero emissions initiatives taking center stage across the globe, Q-Commerce companies must look at sustainable opportunities throughout their business processes.

Q-Commerce represents a massive global opportunity. Today, this burgeoning market can benefit from the right mix of technology, infrastructure, and a relentless focus on customer experience. With popcorn delivered in 15 minutes or less, 2022 will be an exciting year for the Q-commerce industry.

Inventory and supply chain management will go hand-in-hand.

Inventory control and supply chain management are integral to the equation due to the constraint of fast delivery. Dark store inventory and supply management will be more tightly integrated, with the delivery partner can check the nearest next-store option in real-time if items are out of stock. Tools such as real-time inventory management, which constantly updates inventory status and estimates delivery times and product freshness (especially for perishable items), ensure delivery partners don’t waste valuable time figuring this out.

A personalized experience catered to your customer.

A seamless and personalized customer experience is the key differentiator to becoming a market leader in a market where everyone offers similar inventory, offers, and prices. Using AI and ML, personalized recommendations can be generated based on past purchases and the frequency of purchases. By sending customized messages and notifications, companies can make users feel more connected to the brand and increase retention. Retention can also be boosted by a compelling user interface, intuitive design, and a seamless user journey. 

The Fast Modern World

In principle, however, calculations show that quick commerce has the potential to achieve greater profitability than traditional commerce. For example, suppliers’ markups are relatively low, conducive to consumer acceptance and customer acquisition. Companies do not have to pay rent for a store or parking lot, so their business models have significant cost advantages. With more market traction, the company’s marketing costs will also decrease.

Instant gratification is the one thing our society needs. It’s precisely what Q-Commerce implies. Home-delivered instant gratification will have the unquestionable knock-on effect of piling on top of the already existing e-commerce threat to brick-and-mortar stores. With Q-commerce growing in popularity and usage, restaurants and shops are under tremendous pressure to follow the rulebook at their peril. It would seem that business ownership is built around evolve-or-die.