A Complete Guide To Hyperlocal Delivery Model in Grocery Industry

13 min read
07 November 2022

Technological advances has changed how people shop and businesses deliver. It is the era of faster and more efficient deliveries, where customers can choose the time and location where their order will be delivered. There’s been a lot of buzz about the hyperlocal delivery model which has added an additional dimension to the online grocery industry, ever since it has been uncovered. The reason behind its popularity and success is that the hyperlocal delivery model delivers products to its customers in a very short time period. This model offers an opportunity for small business owners which is a reason why many businesses are adopting this model.

Furthermore, from buying grocery essentials to premium products such as rare spirits, the rise of the hyperlocal delivery model has made everyone's life easier. Allied Market Research anticipated that the grocery home delivery business will grow in the coming years, and incorporating the hyperlocal delivery business model can be a win-win situation for all parties involved.

A hyperlocal business model focuses on making consumers’ lives easier by creating a local ecosystem that meets their needs on demand. According to Research and Markets, the online hyperlocal service market is expected to grow by $451.64 million over the next few years, with a CAGR (Compound Annual Growth Rate) of 18% during the forecast period. 

This article will let you know the hyperlocal delivery model for the grocery eCommerce industry in detail :

What is a Hyperlocal Delivery Model and How Does it Work?

A hyperlocal delivery model, also known as a micro-marketplace, is a logistics service that focuses on the needs of customers who are geographically close to one another. It aims to bridge the demand-supply gap by establishing an efficient network of suppliers who meet customer demand by providing them with what they require right at their door. 

In hyperlocal deliveries, eCommerce companies or online retailers use available inventory at local stores to deliver orders faster to their customers. Furthermore, eCommerce businesses create alliances with local vendors so that an order placed can be fulfilled immediately by a local store near the customer's location. 

The hyperlocal business in the grocery industry in detail 

  • The customer will order the required groceries through the mobile application. 
  • Then the aggregator receives the order and passes all the details to a delivery partner. 
  • The delivery partner sends a delivery boy to purchase the requested item from a local brick-and-mortar store and deliver the product to the customer at the requested location. 
  • The aggregator operates the entire system and earns a commission for the role it plays.

 In addition, food, personal care products, home services, and many other items are delivered locally using the hyperlocal delivery model. 

The most relatable example of a successful hyperlocal delivery business is InstaCart, one of the world's leading online grocery ordering companies in the US and Canada. 

What Are the Benefits of the Hyperlocal Delivery Model in the Grocery Industry?

The hyperlocal delivery concept has many benefits for online stores. Of course, the main advantage of a hyperlocal delivery service is that it offers the fastest deliveries compared to any eCommerce model. But even apart from that, there are several other additional factors that contribute to the success of hyperlocal delivery.

Let’s take a look at the benefits of the hyperlocal delivery model for both customers and retailers.

1. Local Stores Get a Boost

The hyperlocal model provides local stores with an opportunity to start selling online. Because of this model, retailers not only get the opportunity to sell their products at a quicker pace but can also gain visibility and optimize their product sales.

2. Minimal Efforts Are Required By Retailers

The hyperlocal delivery model turns out to be a profitable situation for retailers. They can list their company on the appropriate platforms, which will allow them to expand their business. They are not required to invest in developing or maintaining an app. In addition, the delivery will be handled by the aggregators' delivery partner. As a result, retailers can expand their businesses with little effort.

3. Expand Market Reach Conveniently

The hyperlocal delivery model helps retailers to experiment with new products by narrowing the location in which they are planning to sell. This approach can help them to get feedback from customers and expand the market reach gradually. Furthermore, retailers can also learn the likes and dislikes of their customers.

4.No Specific Packaging Guidelines

The absence of packaging rules is a significant benefit of hyperlocal deliveries. No rider will send you the packaging requirements for each order. The only thing the sellers will have to do is package them according to the product and vehicle. 

The only requirement is that the product must not spill or get damaged on the way.

5. Better Inventory Quality

Because the hyperlocal market is based on the shopping needs of the local customers, inventory is always stocked with their favourite products. Customers don’t have to go far away from these markets to buy the required products. This can be key in products like Fresh produce, that have a limited Shelf-Life. 

6. The Competition Benefits Customers

This system puts retailers under pressure to improve their efficiency and business standards. As a result, customers can expect higher-quality goods and services at lower prices.

7. Scheduled Delivery Timings

The hyperlocal delivery model allows customers to select their preferred time for delivery. This is one convenient module for people to plan their purchases and delivery.

8. Transaction Transparency

Consumers are arguably the topmost beneficiaries of this model. They can set different options, compare them, and reach an informed decision through this model. The system mandates an effective delivery technique as well.

9. Reduces the Chances of Breakage

In the hyperlocal delivery model, eCommerce businesses can ship their products locally instead of all the way from a centralized hub. A local retailer can ship products straight to a customer's address. This method eliminates the entire lengthy shipping procedure that takes place in a delivery fleet. Less time in transit means fewer chances of something getting broken or spoilt. This is another way hyperlocal delivery improves customer satisfaction and the shipping experience overall.

Different Types Of Hyperlocal Delivery-Based Business Models

Before we go any further, let’s take a look at the models that exist in hyperlocal delivery in grocery to assist you to choose one.

  1. Single-Store Model

A single-store model sells products from a single vendor. It can be used when a brick-and-mortar Grocery Retailer decides to create an app for its products, or it can be used by a company that already has an app and has agreed to stock its own inventory rather than selling items from another retailer. 

In this model, sellers have direct involvement in the hyperlocal market. They have to monitor the needs of their customers and manage their inventory properly. The seller must direct a team to manage inventory accordingly.

2. Store Pick Model

In this model, the customers typically order things online and pick them up from the stores themselves. Businesses that want to provide their customers with the products they want at a convenient time can use this strategy.

3. Aggregator Model

This model is one of the most common hyperlocal delivery models because it is not capital-intensive.  In this model, a company serves as a middleman between offline customers and retailers. The business does not acquire any assets or inventory, instead, it merely connects with other retailers and to sells its goods through its own platform. 

As a result, the company provides an online audience to the physical store(s) and assists them in promoting their store to local consumers. This model can be used to provide almost any type of service because it generally only requires collaborations with other retailers. 

4.Hybrid Model

This model is a hybrid of the single-store and aggregator models. A hybrid model offers the pros of both inventory and aggregator models and can be shaped according to the target consumers. In addition, many businesses can go for a hybrid model depending on their flexibility and convenience.

Important eCommerce Features For a Hyperlocal Delivery Marketplace

Hyperlocal marketplace provides businesses an opportunity to connect with the locals in the locality for their shopping needs. Here are some important features required to run a marketplace and also enable the popularity of the hyperlocal delivery business model.

Distance Calculations

Hyperlocal marketplace offers distance calculation systems so that consumers can get details of the nearest grocery store selling at the platform, just by typing the address.

Inventory Management

The hyperlocal marketplace needs to provide real-time location and inventory syncing so that customers can collect all details regarding the availability of stock.

Delivery Slot Details

The hyperlocal marketplace can offer this feature for the convenience of the customers. That could be used by them to check the availability of delivery slots. This feature is added to be a convenience that helps consumers book orders as per their time preferences.

Chat With the Customer

If the hyperlocal system includes the feature to chat with the customer, it solves half of the problems that arise during the delivery of goods and services to customers.

Some often experienced pain points of grocery marketplaces, the placed order does not match the stock, making it difficult for the store owner to convey the same to the customer. This causes delays in product delivery, and the customer is unaware of the reason behind that.

In this case, a chat system with the customer can really solve the problem, and the customer also receives regular updates on their placed orders.

Checkout From Multiple Stores

Hyperlocal businesses make it possible to place orders from another store just in case a particular store doesn’t have that product available.

PickUp Management

This service makes it possible for buyers to shop online according to their convenience, in-store when they want immediate delivery, and sometimes even a combination of both. PickUp management services, in which groceries or any other product are ordered online for pickup at a store, are becoming increasingly popular.

Auto Order Completion

This feature aids in automatically marking an order as completed after a set period. The buyer would not be able to send a return request once the order has been auto-completed. 

Adding more, this not only positively affects the customer experience but also increases the conversion rates, as the user can reorder a product or a grocery item.


In summation, all we want to say is that hyperlocal delivery in the grocery eCommerce niche is a great strategy to expand your business reach in a limited geographical area. 

The way hyperlocal delivery works can be beneficial for every Grocery business. Having orders delivered at the earliest possible time will not only increase customer satisfaction but also helps in traction with the customers.

If you need to provide hyperlocal delivery to your consumers, now is the exceptional time to do so. Because of continuous changes happening in the eCommerce ecosystem and consumers’ expectations, offering faster deliveries will assist you to benefit repeat consumers. 

To implement the hyperlocal model effectively, you will need a platform that has features, such as those mentioned in this blog. 

Growcer, is a customizable and scalable, turnkey Grocery Marketplace solution that can help entrepreneurs to enterprises in launching a Grocery Supermarket that operates in the most popular hyperlocal business models. It has a host of essential eCommerce features as well as ones that allow Hyperlocal operations. Multiple revenue channels are supported in the system. It also comes with multiple Business APIs pre-integrated. 

To add to the benefits, Growcer is License based and is offered with a one-time payment. The same will be dependent on the scope of the project. Any customizations needed, can be done with the help of an in-house customization team of Growcer.  

We hope this article will help you to understand what hyperlocal delivery is, how hyperlocal delivery works and benefits the grocery eCommerce business. 

Tushar 2
I am a Digital Marketing Enthusiast and E-commerce business consultant. I have expertise in branding and formulating marketing strategies for business. I ensure...
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