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After several years of eye-watering growth for “quick commerce,” or q-commerce, a cursory look at tech sector headlines will tell you that the industry is facing some serious headwinds. This is owing to the combination of a tricky macroeconomic landscape for businesses and the impact that the cost-of-living crisis and a looming recession are having on people’s wallets.
But far from being a cause for panic, this should be seen as a cause for opportunity in the q-commerce sector. With a fair few q-commerce players running out of steam in the delivery sector race, what’s needed is adaptation and diversification of their offering — namely, going multicategory.
Food will always be here and be in demand, and recently, we’ve seen more delivery players move into the groceries sector to meet the demand of a changing customer base. But why should we stop there?
Whether it’s flowers or pharmaceuticals, what’s next for q-commerce could undoubtedly make a huge difference in companies’ survival and success in what you could aptly call “The Hunger Games.” It could also change the landscape of q-commerce as we know it.
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To ensure that we’re staying close to the demand of the customer and remaining relevant, we need to focus on that hidden gem that separates our sector from the high street: Data.
Why data is important to q-commerce
Part of ecommerce’s challenges come down to the numerous demands for business owners’ attention. Glovo, for instance, has a four-sided marketplace of customers, partners, brands and couriers. Add speed into the equation and the stakes are even higher.
Ninety-seven percent of U.S. data executives say that data science is crucial to maintaining profitability, while 82% say their company’s leadership should be concerned about what unfit data models could mean for the future of the company.
This second stat should be of particular interest to q-commerce. Dwindling demand shows just how much the sector needs to reconnect with the consumer and their needs.
As web design and marketing specialist Atul Jindal wrote in VentureBeat recently, “Data is no longer an option … Accessing, interpreting, and using it effectively has become the difference between life and death for modern online retail.”
The ability of data strategy to turn, as Atul puts it, “raw, meaningless data into valuable, meaningful insights … [guiding] business processes, from decision-making to strategizing” is why we have invested in such a robust strategy of its own and operates with a data mesh model.
Before this, it was challenging for our data setup to scale with company growth, and it was ultimately not helping business performance.
With data mesh, we have a decentralized approach that is vital to managing data at scale, and if we are to move at pace, both in our operations and our deliveries, we need a data strategy worth its weight in gold. This might be the same for any business, but for q-commerce it’s integral to its survival.
With this in mind, I look at some of the problems facing q-commerce, and how data can help to not only keep the sector’s head above water but diversify its offering to help secure its long-term future and relevance.
Stock and product
A hefty 75% of all supply chain management professionals want to improve their inventory management practices. The tightrope act of having too much and too little stock has had its safety net taken away with the recent global stresses on inflation and the supply chain.
When it comes to q-commerce, by leaning into data, players can optimize inventory management and ensure they are stocking products the consumer wants — an even more significant consideration given the Cook Rooms and micro fulfillment centers (MFCs) it relies on to offer typically short delivery windows.
But without a detailed understanding of consumer appetites, these stores are playing potluck and will potentially fail to stock what’s in most in-demand. Not ideal when McKinsey reports that 30% of consumers expect goods to arrive same-day.
It is not only about convenience, though. Through improper inventory management, some q-commerce players might be spending twice as much as they earn per delivery by moving heaven and earth to meet customer needs.
Some q-commerce companies have sought to absorb this cost by offering their capabilities as a service. But this will only be a short-term fix. What’s required instead is for q-commerce to apply the right data to forge a path to profitability. And, as previously mentioned, to branch out into areas beyond retail and grocery, such as pharmacy and more, and to diversify their inventory long-term.
After all, in the world of q-commerce, so much to explore hasn’t yet been explored.
Better customer understanding
Part of changing your stock and inventory is, of course, understanding the customer to a better extent. Customer data is the holy grail in the service industry and is the ace up e-commerce’s sleeve when compared to in-person retail.
But as the demand for q-commerce wanes, we need to ensure we’re plugged in to what exactly the customer wants beyond the item itself.
Over half (59%) of consumers claim personalization influences their overall purchase decisions. If q-commerce is to remain an in-demand service, it needs these kinds of metrics and to position itself as a service not just defined by speed, but by personalization too.
As we’ve already explored, customers have greatly changed since the rise of q-commerce two years ago. Now we need a reset. Does fast delivery now still constitute what it did 24 months ago? Could it even be related to a certain transaction? If we fail to ask these questions, we may be guilty of promising a specific service before the need has been truly defined.
That’s not to say it’ll be one size fits all, either. The shape q-commerce takes depends greatly on geography, too. Local nuance is key to remaining relevant, even for a global company. For instance, our experience in Nairobi tells us that because of the heavy traffic can delay deliveries in the city and that with the demand for groceries outweighing takeaways, deliveries are still possible because there’s no risk of hot food going cold.
Q-commerce should leverage customer data from person to person, country to country, to ensure it is a relevant service — and if it isn’t, ask itself what it can do to reform.
Maintaining positive working environments
In the rush to deliver at speed, one of the risks q-commerce companies face is neglecting those behind the desk or out on the road making the deliveries.
But companies can’t afford to compromise on their commitment to provide a supportive working environment because of their promises to the customer to go above and beyond. Particularly at a time when layoffs in the tech sector are becoming commonplace.
Data, therefore, has a role to play, looking inwards. Implementing a robust data strategy inevitably means less of a grind on the worker because their productivity is raised while decision-making is refined. And, when it comes to couriers specifically, routes are optimized to help them avoid repeating their steps.
But data goes even further and can benefit your culture as well. Because of our own hypergrowth, we were very keen to maintain a positive working environment and ensure that we didn’t lose our identity or that voices became lost in the noise.
This is why we run an internal survey to provide crucial data on how employees feel about factors such as compensation, career development and diversity, equality and inclusion. Like all data, this needs to be used; converted into insights used to inform not just the status quo, but the direction in which we’re headed. This way, we can ensure business success doesn’t come at the expense of employee well-being.
Knowing what data q-commerce firms need to survive the “Hunger Games” is only half the job. Any successful data strategy must also address the four concerns of data users: a lack of trustworthy data, quality and availability issues, discoverability and bottlenecks.
Only then can we build a platform that allows for data-driven decision-making and ensure that q-commerce isn’t consigned to the junk heap of great tech has-beens.
Whether it comes from orders, customers or colleagues, data has a lot to tell us. Building a strategy that can listen is key to making better business decisions with quicker insights. And with this, despite the headlines, the future could be very bright for q-commerce.
Daniel Alonso Moreno is the VP of QCommerce at Glovo.
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