Offering local delivery connects your retail business to nearby shoppers, increasing sales and improving satisfaction. Customers place orders online or in-store, and you deliver them from a nearby retail store or distribution center.
But the logistics can get tricky. From coordinating orders and planning routes to tracking parcels in transit, you’ll need proper systems to make local delivery a profitable and reliable fulfillment method for your retail business.
Ahead, you’ll learn the ins and outs of setting up your own local delivery service, along with the technology you’ll need to keep your retail operations running smoothly.
Table of contents
What is local delivery?
Local delivery is when customers buy your products online or in-store and have them delivered straight to their doorstep. It serves as an alternative to shipping with a carrier or in-store pickup, offering a direct delivery option to customers.
The option of local delivery is prized by retailers and customers who value the convenience, speed and flexibility that might not be available from traditional delivery methods.
The key benefits of offering local delivery
With local delivery service, businesses can provide personalized shopping experiences for nearby customers and boost sales.
Increase sales and average order value
Flexible delivery options help retailers cater to customers' expectations for speedy delivery. Instead of relying on a third-party shipping carrier, retail staff can pick, pack, and deliver products directly to customers, often within hours.
You can also increase your average order value (AOV) by reserving free local delivery for orders that meet a minimum threshold. For example, customers could get free local delivery when they spend over $25. This encourages larger purchases, offsetting delivery costs.
💡Tip: With Shopify local delivery, you have the flexibility to create multiple delivery zones with customized pricing conditions for each zone.
Build stronger community relationships
Making it easier for customers to shop locally is a compelling way to differentiate your brand, attract new customers, and drive sales. It’s also a meaningful way to stay connected to your existing loyal local customers. You'll get face-to-face time with online shoppers without them needing to visit your retail location. And if your delivery vehicle prominently features your branding, every delivery can be a roving billboard advertising your business to the surrounding community.
Gain control over the customer experience
In the absence of in-house local delivery, most retailers partner with third-party shipping carriers to deliver orders directly to customers' homes. These carriers become an extension of your brand. A negative experience with a delivery partner can inflict the same reputational damage to your business—and you have no direct influence on the partner’s employees or the level of service they provide.
Local delivery, however, gives you the opportunity to have your own retail team deliver orders to nearby customers. These staff members have already received customer service training and are familiar with your products, enabling them to assist customers effectively throughout the delivery process. You can remind them that each delivery represents an additional opportunity to offer excellent customer service and build customer loyalty.
Reduce reliance on third-party shipping carriers
Shipping delays are a natural part of the gig. Shipping costs can also be unpredictable, and are a common reason for abandoned shopping carts.
Delivering orders directly to local customers helps you avoid delays and shipping costs. By delivering products directly, merchants can better control the process instead of depending on shipping carriers.
How to start a local delivery service: a 7-step guide
- Choose your local delivery model
- Define zones and delivery fees
- Set your delivery speed and schedule
- Equip your team with the right technology
- Establish a clear order preparation workflow
- Promote your local delivery service
- Offer complementary pickup options
1. Choose your delivery model
Some online store owners also operate brick-and-mortar locations from which they fulfill local delivery orders. If this is the case with your business, consider which of your stores will offer the local delivery option and whether you have enough staff to deliver from multiple locations.
Other ecommerce businesses have no storefront and rely solely on their online operation. They typically use a distribution center or fulfillment warehouse as their base for local deliveries.
In either case, choose the delivery model you'll use:
- In-house fulfillment, which means delivering orders using your own staff and delivery vehicles. This method is best if you have the staff resources and want ultimate control over the end-to-end customer experience.
- Third-party local delivery companies, such as Doordash and Postmates, are better if you don’t have the resources and prefer to outsource fulfillment. Remember, you’ll have significantly less influence over the level of customer service offered by the people making the deliveries.
Some retailers take a hybrid approach and blend the two ship-to-customer models for different order types. For example, you might deliver orders within a two-mile radius and use a third-party service for orders outside that radius.
You can even get specific about which products qualify for local delivery, like handling food deliveries in-house when you don’t want to risk a third-party driver leaking, spilling, or tampering with the order in transit.
2. Define your delivery zones and fees
Define multiple delivery zones and use a list of ZIP/postal codes to determine the maximum distance you’ll travel to deliver orders. Alternatively, you can set a radius around each location to identify your delivery areas, but keep in mind that this gives you less control over specific areas and neighborhoods.
While customers expect free shipping, it’s not always feasible to offer, since you may need to cover delivery costs such as gas or vehicle insurance. Offering extra services helps no one in the long run if it prevents you from running a viable business and continuing to serve customers in the future.
There are two key factors to consider in setting delivery fees:
- Minimum cart value: Offer local delivery exclusively for orders above a specified value, which can help increase AOV.
- Local delivery price: For orders within your delivery zone, set a fixed local delivery price without requiring a minimum cart value. To encourage customers to choose local delivery, set a lower price for shorter distances (for example, $1.99) and a higher price for longer distances (an additional $0.99 per mile).
💡Tip: It's easy to set up local delivery in your Shopify store. You can create both local delivery rates and in-store pickup rates to differentiate between the two options.
3. Set your delivery schedule and speed
One of the benefits of local delivery is that customers can receive their orders quickly. Some options to consider are same-day delivery, next-day delivery, or two- to three-day delivery. As consumers are increasingly accustomed to shorter delivery times, anything longer may not make sense for shoppers who choose local delivery specifically for the convenience.
Your speed depends on how often you plan to make deliveries. If you’re delivering locally and can't commit to it every day or as orders come in, define specific delivery schedules for each day.
For example, if weekends are your busiest shopping days, you may not have enough staff to run the store on Saturday and Sunday while fulfilling local deliveries. Consider reserving local deliveries for weekdays to solve this issue. Just make sure you communicate the schedule to your customers before, during, and after their purchase. Advertising a service on your site that you can’t fulfill in reality can erode trust and lose you customers altogether.
4. Equip your team with the right technology
There's a lot that goes into the local delivery process. From receiving a customer's order to delivering it to their home address, retail technology makes the process easier and helps you scale your operations. This includes:
- Mobile point-of-sale (mPOS) systems to check a customer’s order details when picking inventory from the store, stockroom, or warehouse
- Inventory management systems (IMSs) to update quantities at the location where your local order was fulfilled
- Delivery tracking apps to give customers real-time insight into their package’s location. This can eliminate the common “Where is my order?” questions and reduce missed delivery attempts.
To secure the best experience for you and your customers, having these technologies unified on one powerful, easy-to-use platform is the best way to deliver. Shopify, with its deep native capabilities and extensive ecosystem of apps can provide you with the ability to deliver on demand, rain or shine.
💡Tip: Shopify Flow integrates with your Shopify toolstack so you can create automated workflows, like sending customers a text message when their order is out for local delivery. You could also avoid overselling or committing to local delivery orders by marking products as “out of stock” when inventory quantities dip below a specific threshold.
5. Establish a clear order-fulfillment workflow
A straightforward order-fulfillment workflow reduces errors, shortens delivery times, improves customer satisfaction, and helps you scale your local delivery operations.
To do this:
- Assign roles. Define who’s responsible for picking, packing, and delivering each order. Depending on the size of your operation and complexity of each task, some people may perform multiple functions.
- Create a designated fulfillment area. Usually, this is in your stockroom or inventory storage area.
- Use or create a packing slip template. Use printed or digital checklists to confirm all items (including customizations) are correct and correctly packaged before they're sent out for local delivery.
- Label orders clearly. Add the customer’s name, address, delivery method (in-house or third-party), and any special instructions to help the delivery person complete the delivery to the customer’s specifications..
- Mark the order as fulfilled. Once an order is ready for local delivery, update the status in your Shopify Order tab to “Fulfilled.”
6. Promote your local delivery service
Design promotions on your website and retail signage in-store to promote your local delivery service. For example, you might use a popup or banner on your retail site, or a marquee to share information with customers in-store.
In-store associates can also tell customers about the service if they're interested in a product that’s too big to carry home the same day. Additionally, associates can consider other circumstances in which delivery would be a helpful option to offer, such as if the customer is going somewhere other than home after shopping and might not want to carry large or perishable items with them.
There are additional ways to promote your local delivery options online, including:
- Social media: Post about local delivery on your social media channels, and supplement that with paid ads targeting the geographical area where you're offering the service.
- Email marketing: Segment your customer list by location and email customers in your delivery area know about the new local delivery option. Consider incentivizing them with a discount code or free delivery for their first order.
- Search engine marketing: Chances are, potential customers in your area are searching phrases like “local delivery near me.” Optimize for local SEO for high placement in Google search results.
- Retargeted ads: Send campaigns to past and current customers, as well as site visitors who did not yet make a purchase. Let them know that local delivery is now available and encourage them to try it out.
- Shipping policies and checkout pages: Run free-shipping campaigns or flash sales and combine them with messaging about local delivery to drive awareness and conversions.
There are also traditional tactics that don’t require local digital marketing. Post flyers in community hot spots and consider collaborating with other local businesses to spread the word about your local delivery service.
7. Offer complementary pickup and delivery options
Local delivery doesn't have to compete with other shipping strategies—it can support them. Complementary options include:
- Local carriers: While local delivery is great for nearby customers, you don’t want to exclude customers who reside outside your local delivery zone. Carrier shipping services can supplement your local delivery needs, or handle overflow during especially busy periods.
- Curbside pickup: If customers outside of your local delivery radius want their online orders fast and expedited shipping isn’t available or affordable, you can offer curbside pickup as an alternative. You could also turn your warehouse into a pickup location, launch a popup in-store pickup spot, or partner with another local business to leverage their space.
For example, White Rock Soap Gallery has three Texas-based brick-and-mortar stores alongside their significant ecommerce business. They offer local delivery from their retail locations in addition to curbside pickup and traditional shipping. With all of these options available, no customers are turned away because of their location or delivery preference.
Choosing the right local delivery model
There are several ways to deliver orders—your choice will depend largely on your location and your chosen delivery zone.
In-house delivery: Pros and cons
In-house local delivery relies on your retail team to fulfill customer orders. It's a good option if you want to maintain control over the delivery experience and guarantee great customer service in more face-to-face interactions, but bear in mind that you’ll need efficient processes and sufficient staff to cover store operations while associates are out making deliveries.
While cars and trucks may be the first method that comes to mind, you don’t necessarily need to invest in a new vehicle to fulfill local orders. Staff can deliver orders by bike or on foot, which may be faster in some areas, depending on traffic conditions. This opens the door to local delivery even if you don’t have the budget for a company vehicle. You can also reimburse staff for mileage and other costs if they want to deliver using their own vehicles.
You should also be mindful of insurance costs associated with in-house delivery. Regardless of what vehicle your staff use to make deliveries, you most likely share the burden of liability for any accident that occurs while they are out for delivery.
Pros of in-house local delivery:
- Low costs
- Ultimate control over the delivery experience
- Additional opportunities for face-to-face interactions with direct representatives of your brand
- Opportunity for additional marketing with branded vehicles out for delivery in your area
- Ability to offer faster or same-day delivery
Cons of in-house local delivery:
- Limited scale
- Time and labor-intensive
- Extra insurance is required to make deliveries
Third-party services: Pros and cons
If your business doesn’t have many employees or you’d rather not assume direct responsibility for the delivery process, you could sign up to be a participating retailer with app-based delivery services like Postmates or DoorDash, or other delivery companies.
These services can also come in handy when you're experiencing high volumes or want to get in front of potential new customers. Partners also take the delivery process off your plate, simplifying execution. However, this convenience comes with extra fees and less control over the customer experience.
Whereas your own staff depend on you for employment, and you have the chance to train them on your own standards of great customer service, you neither hire nor train the people making deliveries for third-party services. In fact, in the case of services like Postmates and Doordash, the people making deliveries are generally considered contractors, not direct employees of those companies, and therefore have even less accountability.
This doesn’t mean that these contractors aren’t motivated to do good work—just keep in mind that almost everyone has one story of a bad experience receiving delivery from a third-party provider, so you’ll need to be on the lookout for such instances with your own customers so you can let them know you are aware of the issue and offer to help if at all possible.
Pros of local delivery partners:
- Ability to commit to local delivery during busy periods in-store
- Instant access to delivery partners without hiring or training new employees
- No direct responsibility for vehicle costs
- Most partners provide real-time GPS tracking and built-in customer notification systems
Cons of local delivery partners:
- Most services take a cut of sales
- Less opportunity for face-to-face interactions between customers and representatives of your brand
- No control over the delivery experience
Hybrid model: The best of both worlds?
The hybrid model combines in-house delivery with third-party partners to strike a balance between control, delivery costs, and scalability.
For example, a florist might use in-house staff to deliver premium bouquets to customers within a five-mile radius. These orders are fragile and often tied to special occasions, so personal delivery ensures they arrive on time.
For orders outside that radius or during busy periods (e.g., Valentine’s Day), the retailer could use a local white-glove delivery partner to scale their delivery capacity. This offers the best of both worlds: a level of control over the customer experience while also ensuring prompt local deliveries during peak periods.
Technology for local delivery orders
Delivery management software
Delivery management software helps you plan, manage, and optimize the process of delivering orders to nearby customers. It automates key parts of the delivery workflow—from assigning orders and creating routes to tracking drivers and sending customer notifications.
Popular local delivery management tools that easily integrate with Shopify include:
The best part about using one of these tools with Shopify is that any information about the delivery feeds directly into your customer and store data, giving you additional up-to-the-minute insights into all of your retail operations.
Route-optimization software
Order routing diverts a customer's order to their closest fulfillment center or retail store. The goal is to minimize the distance a parcel travels—and therefore, reduce delivery costs.
We can see this in practice with a home furnishings retailer that has an ecommerce website and three retail locations across the country. Online orders from customers with a shipping address on the East Coast could be routed to their New York warehouse, while those from shoppers with a Los Angeles ZIP code go to the Beverly Center store for local delivery.
Since smart order routing is a native feature on the Shopify platform, all Shopify retailers are able to optimize delivery routes to boost the bottom line as well as the customer experience.
“Before using smart order routing in Shopify, getting to the point where we could deliver orders quickly within one day required a lot of messing around with the system’s configuration and manually changing the way orders were being handled,” says Andrew Nicol, founder and CEO of Element Brooklyn. “Now we can deliver over 94% of our orders in one business day.”
Real-time tracking and customer notifications
Customers don’t like to be left in the dark when it comes to their order’s whereabouts. Real-time package-tracking software can trigger customer notifications at every stage of the fulfillment process, including:
- Order received
- Order being prepared
- Order shipped or in transit
- Out for delivery
- Delivered (with proof of delivery)
Consider what happens if the customer is unavailable at the time of drop-off. Sometimes, it's as simple as leaving the package outside the front door or in the mailbox. Remove any guesswork by asking the customer for delivery instructions at checkout. That way, they can let you know whether it's safe to leave the order at the door or elsewhere.
In the case of special circumstances when the recipient is not available, such as delivering age-restricted goods or accepting cash on delivery, ask the customer for their phone number and ensure drivers have it on hand so they can contact them directly.
Setting up local delivery on Shopify
Giving customers the choice of how and when to receive their orders removes barriers to completing a purchase, which in turn boosts your bottom line. It also gives you a chance to connect with your community, driving customer satisfaction and loyalty.
Shopify takes the stress out of local delivery by giving you one central business “brain” to manage retail operations. Customers have the flexibility to switch between sales channels and delivery methods in a single purchase, without requiring the technical infrastructure that inflates costs and slows down operations.
Regardless of what delivery method your customer chooses, with Shopify you have the confidence of knowing that all of your customer and order data updates accurately and in real time. More data leads to more actionable insights, and more opportunities to deliver even better results.
Local delivery FAQ
What is the meaning of local delivery?
Local delivery is when a business delivers orders to local customers. For example, an online retailer might route orders from customers within a five-mile radius to their retail store for staff to deliver packages by car.
How does local delivery work?
Local delivery works by transporting products directly from a retail store, distribution center, or warehouse to the customer's location within a nearby area, often using in-house drivers or third-party delivery services.
What does “received by local delivery” mean?
“Received by local delivery” means that the package or item has been delivered to the recipient by a local courier or delivery service.
What does “arrived at a local delivery center” mean?
“Arrived at a local delivery center” means that the package has reached a nearby distribution hub or facility that handles last-mile delivery. From there, it will be sorted and sent to the customer's address to be delivered.
