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Originally Posted On: https://www.deliverect.com/en/blog/expert-talks/how-fmcg-and-qcommerce-are-transforming-on-demand-delivery

The world of retail is evolving at an unprecedented pace, with Fast-Moving Consumer Goods (FMCG) and Quick Commerce (Q-Commerce) sectors leading this transformative charge. In a recent insightful webinar presented by Experience Retail Today and sponsored by Flooid, industry experts Joe Heather, General Manager at Deliverect UK&I, and Noah Hayes, General Manager at Deliverect Noam, delved into the significant role on-demand delivery plays in this revolution.

Let’s dive deep into the key takeaways and insightful views.

Highlights — TLDR

• With a 21% CAGR, the online food delivery market, encompassing grocery and prepared food, is set for substantial growth by 2027, indicating a major shift in consumer expectations and market dynamics.
• Grocery delivery penetration is around 35-40%, but 75% of consumers expect express delivery as an option, emphasizing the importance of meeting this demand.
• Good delivery quality, accurate delivery times, and competitive delivery prices are crucial for customer satisfaction and loyalty.
• Operators are encouraged to rethink their on-demand strategy and find the right balance between third-party and first-party delivery to meet consumer expectations.
• Leveraging third-party platforms while investing in first-party ordering can elevate operators and provide a powerful marketing engine for reaching a mass population.

The Rise of Online Food Delivery

The global online food delivery market is undergoing a significant transformation. With a compound annual growth rate (CAGR) of 21%, the market is expected to see consistent year-over-year growth, significantly impacting both the grocery and prepared food delivery sectors by 2027. This expansion, as analyzed by Statista, highlights a substantial increase in market size and a notable shift in its dynamics. The focus has shifted from merely having online delivery options to the speed and efficiency with which these services can meet growing demands.

This consistent growth pattern reflects a broader change in consumer behavior and preferences. In an era where online ordering has become the norm and life moves fast, consumer expectations have risen dramatically.

Check the Deliverect Brands with Byte report for more details on this.

The changing consumer expectations towards delivery times are particularly striking in this growth trajectory. A substantial 75% of consumers now expect express delivery options, a demand almost synonymous with online food ordering. This expectation isn’t confined to niche markets or specific demographics; it spans various consumer segments, making express delivery a standard rather than an exception. This trend reflects a more profound societal shift towards immediacy and convenience, reshaping how businesses approach their delivery models. The need for speed in delivery services isn’t just a fleeting trend; it’s rapidly becoming an integral aspect of consumer satisfaction and loyalty. Businesses that adapt to these expectations are meeting current demand and future-proofing their operations in a market that increasingly values speed and efficiency.

The Importance of Delivery Quality and Pricing

Good delivery quality, accurate delivery times, and competitive pricing are fundamental for customer satisfaction and loyalty in the contemporary retail landscape. These critical elements have evolved from mere enhancements to indispensable facets of customer retention and loyalty building.

Echoing this sentiment, Noah commented, “In the current competitive market, the quality and timeliness of delivery, along with fair pricing, aren’t just added benefits; they are critical for customer loyalty. These factors collectively shape the customer’s perception of a brand and are essential in distinguishing a business from its competitors.

Rethinking On-Demand Strategy

For businesses, it’s time to rethink their on-demand delivery strategies. The balance between leveraging third-party platforms and developing robust first-party delivery systems is vital. This hybrid approach meets consumer expectations and serves as a powerful marketing tool, efficiently reaching wider audiences. As Joe said during the webinar, ‘Try not to fight against the platforms; they’re powerful marketing engines for you and your brand. They get you in front of a mass population.’ This statement underscores the importance of harnessing the strengths of both third-party and first-party delivery services to maximize market reach and customer engagement.

The Power of Integration

API integration emerged as a hero in this narrative, seamlessly consolidating orders from various channels into a unified system. This technology is crucial for efficient menu management and order processing, enhancing customer experience.

This technology is critical in streamlining operations by seamlessly consolidating orders from diverse channels into a unified system. It’s not just about bringing orders together; it’s about creating a cohesive, efficient process for handling them. As Joe explained in the webinar, “What our platform does is consolidate [orders] by API integration, and we inject those orders into the relevant POS for said brand.”

“We’re delivering a connection between two very fragmented technology spaces. So, we’re helping operators bridge the gap between the myriad of ordering channels and their point of sales or ERPs.” 

—Noah Hayes, general manager, Deliverect North America

The Intersection of FMCG and Quick Commerce

The webinar offered a fascinating perspective on the intersection of FMCG and Q-Commerce, marking a significant evolution in the retail sector. This convergence is not just a merging of two sectors but a creative collaboration that combines traditional retailers’ strengths and the innovative approaches of new-age tech companies.

As highlighted by Joe, “We [Deliverect] sit right in the center, working with all relevant big F&B brands, Q-Commerce brands, and the largest POS providers globally.”

This statement underscores the integral role of such collaborations in shaping the future of retail.

Expanding on this, Noah provided further insight, emphasizing the growing demand for integrated and responsive retail systems. He explained, “As the retail and tech worlds converge, there’s a heightened need for solutions that seamlessly merge various ordering channels with existing retail systems. This integration is vital for enabling efficient on-demand delivery.” His observation sheds light on the increasing necessity for retailers to adopt technologies that streamline operations and enhance their responsiveness to rapidly changing market demands. This approach is essential for retailers to remain competitive and relevant in a landscape increasingly defined by technological agility and consumer expectations for immediacy.

Closing Thoughts

The horizon for FMCG and Q-Commerce in the retail sector is not merely promising; it’s already actively redefining business models and operational strategies. The current landscape illustrates that adapting to these emerging trends is imperative, transcending beyond a mere option to a critical necessity. This adaptation is pivotal for businesses aiming to thrive and sustain themselves amidst the ever-evolving retail environment. It’s about harnessing the power of innovation, customer-centric approaches, and technological advancements to stay ahead in the game. In essence, for retailers and businesses in this sphere, the journey towards integrating FMCG and Q-Commerce strategies represents a strategic move towards future-proofing their operations and securing their place in the next chapter of retail evolution.