The hyperlocal business model is one where the delivery of products is confined to a specific geographical area. The hyperlocal business model focuses on the needs of consumers who reside in the same geographical area. The most defining characteristic of the model is the speed with which products can be delivered to consumers. For best results, the location where the order is packed for distribution should have the same area code as the customer’s address.
- Understanding the hyperlocal business model
- Characteristics of the hyperlocal business model
- Key takeaways:
- Connected Business Concepts
Understanding the hyperlocal business model
This makes the model ideal for products that are required on-demand, including fresh food, personal care items, medication, stationery, baked goods, pet supplies, and miscellaneous products such as smartphone chargers and batteries. The hyperlocal business model can also be used for on-demand services such as laundering, home maintenance, and pre-cooked meals.
- Urbanization, with more people now living in cities with access to hyperlocal services.
- The increasing penetration of smartphones and the internet.
- The proliferation of eCommerce companies and related delivery platforms.
- The COVID-19 pandemic, which has constrained national and international supply chains, and
- Consumer expectations, with most attracted to companies who can deliver products faster than their competitors.
Characteristics of the hyperlocal business model
1 – Personalisation
The model allows local customers to connect with local vendors without the need for an intermediary. Some customers may become friends with their local vendors, which builds trust, transparency, and in some cases brand equity.
2 – Technology
Sellers favor a digital payment system that ensures customers receive their orders as quickly as possible.
They also need to define a strict geographical delivery area, which is normally done via an app.
3 – Delivery and logistics
Some sellers choose to deliver their own products, but many employ the services of a delivery company to ensure products are delivered on-demand.
Most apps will be able to determine at the point of order whether a consumer lives close enough to qualify for hyperlocal delivery.
4 – Customer relationship management (CRM)
Like most business models, there must be CRM procedures in place to deal with customer complaints. CRM tools can also be used to determine how to get the most traction with localized marketing content.
American restaurant chain Johnny Rockets operates in more than 400 locations around the world with a relatively small marketing team. The company does not have the market saturation of a McDonald’s or Burger King, so it uses hyperlocal CRM to boost brand engagement and make more efficient use of local marketing dollars.
The strategy encompasses geo-targeting, where a website visitor is sent content based on their location, and geofencing, where smartphone users are sent promotional messages when they enter a particular geographic area. Johnny Rockets also takes photographs of various outdoor scenes across 32 different countries to appeal to the local diners in each.
5 – Revenue model
Note that some businesses will charge a premium on the delivery fee because of the speed with which the order is delivered.
- The hyperlocal business model is one where the delivery of products is confined to a specific geographical area.
- The hyperlocal business model has become more popular in recent years thanks to urbanization and the mass uptake of smartphones and the internet. Companies that can deliver the fastest to consumers tend to be the most competitive in modern markets.
- The hyperlocal business model is characterized by personalization between the buyer and seller, location-specific technology, and tailored delivery and logistics systems. CRM is also important in hyperlocal marketing strategies, particularly for businesses with a more global presence.
Connected Business Concepts
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