Posted by Patrick S. Sedlak, Principal on 11.12.20
Micro-fulfillment has taken off in the past several years, but what about hyper-local fulfillment? Can your company take advantage of this growing trend? Now is the time to plan your strategy because hyper-local might just be the future of fulfillment in urban areas.
Traditional fulfillment is the foundational method for distributing goods. The goods are fulfilled from a distribution center, typically a large industrial area where individuals would not go to procure merchandise. In micro-fulfillment, the goods have already been transferred to a retail store, but customers can get their merchandise via in-store or curbside pickup. This method is becoming more and more common, especially due to the COVID-19 pandemic.
In hyper-local fulfillment, goods are fulfilled from a centralized stock point, which carries a larger pool of inventory than a typical retail store. This stock point is essentially a small fulfillment center within the city, to which a retail store may be attached. Hyper-local is only available in major urban areas where deliveries can easily be made wherever the customer is, such as work or home. These deliveries are typically made by bike carriers within hours. Hyper-local fulfillment can be conducted by retailers or third-party delivery companies.
You’re most likely familiar with hyper-local fulfillment in the form of food delivery services such as UberEats or DoorDash, although these are offered outside of urban areas. But the future of hyper-local fulfillment involves retail companies who expand their offerings beyond micro-fulfillment to provide hyper-local delivery to city dwellers. That means the entire supply chain is local because the company establishes a mini fulfillment center in a centralized location, from which carriers can pick up goods and then make deliveries.
Why should companies opt for hyper-local fulfillment? Because it offers advantages for both the customer and the company. One of the benefits is that hyper-local deliveries offer more customer transparency. Another is speed because deliveries can be made within hours. As customer expectations for speed and ease of delivery increase, so will the need for retail companies to go hyper-local in order to compete in the marketplace, especially against Amazon. Hyper-local also allows companies to increase sales by accessing a broader customer base.
The key is that these companies create a centralized fulfillment center rather than make deliveries from local retail stores. This is because having access to a larger inventory increases availability of items, plus it allows for a more streamlined operation.
Is hyper-local fulfillment right for your company? Find out by contacting Sedlak at firstname.lastname@example.org.