Verticalization: The Future of Quick Commerce

Quick commerce has swiftly transformed consumer behavior by prioritizing convenience and speed. Yet, the “one size fits all” approach adopted by horizontal quick commerce platforms often falls short, especially when it comes to specialized industries like fashion and fresh produce. While these models excel at fast deliveries, they grapple with issues related to quality control, customer experience, and operational efficiency.

Why Horizontal Quick Commerce falls short in scaling niche categories

1. Absence of Integrated Value Chain

The horizontal model's shortcomings can be traced back to its inability to integrate a value chain that works for specific sectors. Take fresh produce as an example. Delivering fruits and vegetables from farm to table requires a tightly coordinated value chain to preserve freshness. However, horizontal models, which prioritize speed across diverse categories, often miss the mark on maintaining quality. This results in dissatisfied customers and a diminished shopping experience.

2. Unoptimised Dark Stores

Similarly, dark stores are not optimized for the particular needs of verticals like fashion or fresh groceries. Fresh produce requires stringent temperature controls to prevent spoilage, while fashion demands careful SKU management to maintain inventory quality. Generalized dark stores, designed for all types of goods, are often ill-equipped to meet these demands. This lack of specialization leads to operational inefficiencies, higher wastage, and more frequent stockouts.

3. Lack of Variety

Another challenge lies in customer expectations around variety, especially in categories like fashion and groceries. Horizontal quick commerce models, focused on fast deliveries, often struggle to provide the range of options consumers expect. Limited variety results in a subpar shopping experience, leaving customers unsatisfied and likely to look elsewhere.

4. Challenges of Reverse Logistics

Returns management is also a significant issue in certain verticals. Fashion, for instance, is a sector where returns are common, and an efficient process for handling them is essential. Yet, horizontal models have not been able to set up and sustain an infrastructure needed for seamless reverse logistics. This inefficiency can lead to an increase in customer churn and drop in retention.

The Silver Lining: Vertical Integration

The solution lies in adopting vertical quick commerce models—platforms designed to serve the specific needs of individual industries. Vertical models excel by creating custom-built dark stores tailored to the unique requirements of each sector. For instance, temperature-controlled facilities for fresh produce minimize spoilage, while specialized fashion stores prioritize SKU management to prevent inventory damage. This ensures higher operational efficiency and a superior customer experience.

Additionally, vertical quick commerce platforms can form partnerships with third-party logistics providers to improve both delivery and returns management. Fashion, with its high return rates, would benefit immensely from a robust reverse logistics system. This targeted approach enhances customer satisfaction, reduces friction in the shopping process, and boosts retention.

Vertical Quick Commerce: A Defining Trend for the Future?

As quick commerce continues to evolve, vertical solutions are poised to take the lead by offering specialized, high-quality experiences. In sectors like fashion and groceries, where attention to detail is essential, vertical models provide a path to sustainable success.

At Evernile, we specialize in helping brands navigate this complex landscape, ensuring they scale efficiently while maintaining high standards of quality and customer satisfaction. If you are building in the intersectional space of D2C and Quick Commerce, we would love to chat and explore how we can support your journey towards success.

Author: Dhritiman Mitra (Associate Partner)