May, 2023
Hyperlocal commerce is the only way e-commerce’s penetration continues to grow sustainably. For e-commerce to sustainably grow, we need the geographical gap between demand and supply to reduce physically. But this is very hard to solve in reality.
When I used to live in NYC, even though there was a corner market right underneath my condo, I used Amazon for many of the SKUs that the market also carried, which would then be shipped from thousands of miles away before they got to me. What a waste!
E-commerce will be the most efficient when the consumer’s demand for a certain good is met by the nearest supplier that carries the good. For this, we need supply to be independent and disaggregated, and joined to the demand side by an independent layer of logistics providers.
But this isn’t possible when you have an oligopolistic and largely vertically integrated e-commerce market such as in the US. The local bodega in NYC can’t fulfil your demand because acquiring customers digitally isn’t their forte and neither do they have shipping options.
Don’t get me wrong, there will always be big players in e-commerce. All I’m saying is for e-commerce’s share to grow, local physical retailers need to start participating in e-commerce. This is also different from “15 min commerce”, which tried vertically integrating like Amazon.
As I said earlier, for hyperlocal e-commerce to work at scale, the demand, supply and logistics needs to be disaggregated and then digitally connected while also being interoperable. For example, the local bodega will be connected to me through a third party logistics provider.
