Measuring ROI of Hyperlocal Delivery Management Solutions

Introduction

Hyperlocal delivery is quickly becoming the way of the future as customers become more attuned to instant gratification. Hyperlocal Delivery (AKA HLD) is a form of last mile delivery where all order processing and shipping occurs within a 50-20 km radius. Deliveries of this type are usually completed within 1-4 hours.

Providing hyperlocal delivery can be a lofty investment, requiring specialized carriers and local storage facilities. It is especially popular among the food and beverage industry as well as grocery.

Why? Because these are the industries that receive the highest ROI (Return on Investment) when using hyperlocal delivery management solutions.

Hyperlocal delivery is an excellent way to satisfy the immediate needs of customers. HLD management systems are designed to ensure you not only provide swift delivery, but reach all potential customers, harness a myriad of resources, and increase profits.

We’ve put together this quick checklist to help you maximize and measure the ROI of your hyperlocal delivery management solutions.

5 Ways to Maximise ROI (Return on Investment) of Hyperlocal Delivery Management Solutions

There are numerous ways for any ecommerce company to boost profitability. However, hyperlocal delivery entitles businesses to a wider range of options. HLD management solutions operate in a more refined manner as well.

As a result, there are a variety of niche practices that you can employ to get the most out of your investment in HLD management systems.

Listed below are a few such techniques that take advantage of HLD’s unique geographic and fast-moving features.

1) Strategic Ad Coverage

Customer acquisition is the primary goal of any business, and HLD offers an added benefit of enabling you to get extra specific with your ad coverage. There are a multitude of ways you can advertise your brand’s unique HLD services.

Facebook ads are excellent for the pay-per-click (PPC) model. You can specify all details related to your target demographic including but not limited to their age range and location.

Using hyperlocal geofencing lets you narrow down the exact areas you want to display your ads, depending on the number of mobile users in that area.

Both Facebook and Google offer Local Ads services, which enable you to reach customers on a granular level.

They help boost brand awareness to all shoppers residing in certain local areas. Whether you opt for PPC ads or Local ads (or both), these ads are essential to increasing the ROI (Return on Investment) on your hyperlocal costs.

2) Minimise Delivery Times

One of the biggest USPs (Unique Selling Points) of Hyperlocal Delivery is the sheer speed of delivery. Food delivery services, such as those offered by Uber and Instacart, assure delivery within 30 to 60 minutes.

Longer delivery times and delayed deliveries can have a major negative impact on your brand’s reputation and customer retention.

There are numerous ways you can bring down delivery times, maintain consistent delivery experiences, and give customers more delivery choices - all of which are essential to maximising ROI. 

A key method of doing this is through route planning and route optimization, with the help of GPS tracking. Integration with communication channels allows you to offer customers self-service delivery scheduling.

However, nothing quite beats the power of information. Tech can also be used to collect data and receive periodic analytics reports on shipping times to resolve any frequent delivery issues.

3) Offer Real-Time Tracking

Keeping delivery times short goes a long way in making consumers of HLD services happy. However, the speed of delivery won’t matter if buyers don’t know where their orders are.

WISMO (Where-is-my-order) calls are a major indicator of customer dissatisfaction and, therefore, can bring down ROI (Return on Investment) on hyperlocal orders.

Real-time tracking is absolutely paramount to reducing these inquiries and customer anxieties in the long run.

Live tracking is one of many ways that hyperlocal delivery management solutions help e-commerce and unified commerce businesses optimize their HLD services.

Advanced HLD management systems typically provide a branded tracking page on your website that displays step-by-step shipping updates.

A good system of this type can also automate sending white-labelled tracking notifications on different communication channels.

4) Utilize Community Resources

Hyperlocal delivery is all about geography and locality - so it is an absolute waste not to take advantage of the opportunity provided by proximity.

There are multiple ways you can do this to positively affect your ROI (Return on Investment).

Make use of multi-location stores and warehouses to get access to a wider target audience. You can also curate catalogs for products in different storefronts to specifically cater to the culture and preferences of the respective locale.

Using local vendors enables you to provide a greater variety of products while showing your support for the community.

You can further this endeavour by organizing cooperative events with other neighborhood businesses and popular regional charities.

This also makes for great publicity on your website and social media. Finally, you can collaborate with other entities within your and your customer's geography to create programmes that are customer-centric.

5) Adopt the Latest in Hyperlocal Tech

Tech is a vital consideration when it comes to ROI as it often involves heavy investment, but at the same time offers high returns. When it comes to hyperlocal technology, integrated tracking and route optimization are just the tip of the iceberg.

Both of the aforementioned services are usually encompassed within the many functions of a hyperlocal delivery management solution.

In fact, these systems are crucial as they take care of everything from planning and monitoring hyperlocal logistics to ensuring and optimising fulfilment.

In addition to the ever-important management systems, new technological marvels are cropping up constantly that are designed to streamline HLD services. At the top of this list are urban fulfilment centres that synchronise inventories.

Robotics has also gained immense popularity in the hyperlocal market, with robots engineered to pick & pack orders in warehouses and drones to ensure safe speedy delivery.

3 Metrics for Measuring the ROI of Hyperlocal Delivery Management Solutions

ROI can be calculated using a fairly simple formula that determines what percentage of your investment is profit. The exact formula is Profit - Investment / Investment x 100.

While this formula may be well known, it can be a struggle to determine day-to-day benchmarks to address and improve your ROI. These 3 measurable metrics will make it easy for you to track which areas of your business need to be amped up.

1) Website Traffic and Sales Data

Your website and social media should be up to date on all things related to your brand. That means everything from tracking updates to event coverage and new tech additions needs to be displayed. If you’re keeping your website authentically updated, you’ll experience a regular increase in website traffic.

Similarly, your sales data can be an extremely valuable indicator of the ROI granted by the hyperlocal delivery management solutions you have implemented. After implementing the maximisation methods listed above, make sure to track any increase in leads, deals, and other indications of potential customers.

2) Development of Brand Identity

Nothing is more powerful for the ROI of hyperlocal businesses than some solid word-of-mouth marketing. Given that any company engaging in hyperlocal delivery needs to have a good reach and connection with the locality, their reputation in the locality is also of immense importance.

With the help of intuitive advertising strategies and local joint ventures, you can ensure your brand receives consistent and positive recognition. This works particularly well for HLD as your company’s reputation can be built up within a set geographic zone. Reaching your target audience is made that much simpler.

3) Customer Engagement and Retention Rate

Where customer acquisition is the primary goal of any business, customer retention is the winning goal. For businesses that operate on a geographical basis, i.e.

those that use HLD services, retaining customers in the target area is of utmost importance. This is because the target audience largely remains the same and is not subject to frequent changes or expansions.

The purpose of utilising localised ads is to ensure you are constantly engaging with your static audience. You can give old customers new reasons to keep coming back to you by using these ads wisely.

Tracking the number of click throughs and engagements on these ads can let you know if your methods of improving the ROI of hyperlocal delivery are working. You can determine if your ROI is being maximised by checking customer retention rates.

What Does the Future of Hyperlocal Delivery Management Look Like?

The future of delivery management has a myriad of familiar terms like Artificial Intelligence (AI), blockchain, and IoT (internet of things). However, HLD’s future incorporates these terms as well as some newer and more unique technologies.

We’ve already listed above a few of the tech-supported solutions that have taken HLD to the next level. These include integrated hyperlocal delivery management solutions, like ClickPost, which offer real-time and white-labeled tracking systems, route planners, and automated data collection.

According to a detailed report published in November 2023 on the Global Hyperlocal Services Market, the HLD market was valued at US$2.3 billion as of 2022. It is expected to reach well more than double within the next 5 years.

The steady pace at which the market is growing has been attributed to the use of AI, AR (augmented reality), automation in logistics processes, and greater visibility.

Beyond these solutions, there are a variety of other technological marvels that are quickly becoming available to grocery and food retailers across the globe.

One such solution touched upon above was Robotics. Robotics is fast becoming the go-to solution to reduce manual labor involved in hyperlocal delivery. Food delivery robots have already entered the market, as well as robots designed to restock fresh food.

According to NRF (National Retail Federation), software has also been developed to provide multilingual menu translators to support online food/grocery delivery services.

In fact, all the abovementioned advancements will be on display at the Foodservice Innovation Zone, hosted at NRF 2024: Retail’s Big Show, which ClickPost will be in attendance at.

The goal of all these innovative ideas is to make everything from staffing to stocking efficient and cost-effective, keeping ROIs at the forefront of every business’s activities.

Conclusion

There are few industries that offer the level of convenience and ease supplied by the hyperlocal delivery industry.

While COVID-19 definitely played a role in the growth of HLD, as social distancing and WFH (work from home) became commonplace, one cannot deny the overwhelming post-pandemic benefits of it.

It promises a means by which a wide range of daily use items can reach consumers in a matter of hours or even minutes in some cases.

A heavy burden falls on food, grocery, and other other industries that make use of hyperlocal delivery solutions. That is one of managing the delivery of this high volume of orders over short distances on a daily basis.

Most companies offering HLD services invest in a management system to ensure efficiency. However, the best methods for measuring the ROI of hyperlocal delivery management solutions can be found in the practices followed above and beyond the usual.

2023 has witnessed the birth of some truly exciting new tech, and this is just the beginning. However, true progress can only be seen when these innovations are paired with other intelligent techniques that leverage the unique benefits of HLD.

Utilisation of the latest in HLD technology coupled with automation, data collection, and strategic marketing are exactly what any company needs to make their investment in HLD the most profitable business decision of the decade.