Quick-Commerce has been expanding in recent years but latest developments have seen many companies scaling back. Is this the end of Q-commerce. Daniel Levan-Harris from Mango Logistics Group and Pieter van den Hoven from StoreShippers took the stage on the 22nd November at our Last Mile & E-Com Online Event to discuss the future of Q-Commerce and its financial framework. You can watch the full recording now.
‘Quick-commerce can work but not for low margin groceries,’ begins Daniel Levan-Harris. He is sceptical that the model can ever be profitable as people fight to get cheap groceries delivered as fast as possible without covering the costs. Daniel believes there is a place for the quick delivery but it would need to be priced correctly.
He gives the example of luxury goods that can be delivered with a premium. When the item is already expensive, the consumer is unlikely to be unhappy about paying more for a delivery.
Pieter agrees with that. He also raises the point of why organisations are building new dark stores and other fulfilment centres, when there are plenty of supermarkets that can be repurposed.
‘I believe in quick delivery, but quick grocery delivery at the moment is a gimmick,’ he goes on.
Both also look at how pricing deliveries so low impacts the quality of the service. Someone has to pay for it otherwise the service is poor. According to Daniel and Pieter bad customer service is a direct result of underpaying drivers and riders. When riders are underpaid there is no incentive for them to do their job well.
Overall both agree it would be very hard if not impossible, to reach a stage where quick grocery delivery is profitable and generates a good basket size. You can watch the full discussion between Daniel Levan-Harris from Mango Logistics Group and Pieter van den Hoven from StoreShippers now.