Food delivery and takeout has been going on for years, so what can apps bring to the table for them to change the course of the industry? It all comes down to convenience. Since 1994 food chains started to innovate the industry with online ordering through webpages, specially pizza. As webpages started to grow and became accessible for everyone, this industry started growing too. In 2004 Grubhub started as an idea to substitute paper menus and place them online so you could access them at any time, and to this day has grown to be the #1 webpage and app that connects millions of people to their favorite restaurants. (‘Grubhub’, 2018)
Online food ordering leads to delivery or takeout either by webpage or an app, allowing you to create an account, keep track of your order, save your favorite restaurants, leave feedback and pay either by credit card or cash in order to keep customers interested in the convenience of it. It started early but fully developed to have an impact in 2015 and as of 2016 it overtook phone ordering. (‘Online food ordering’, 2018) In late 2016, Around 3% of restaurant transactions in the U.S. were made online, resulting in 1.7 billion of their 61 billion industry. (‘Restaurant food delivery heating up’, 2016) With the increase of smartphone usage, it has become a regular thing to have apps in our phones to make things easy and accessible, so the food industry grew with this too.
Lately, delivery apps are becoming part of many people’s lives as they continue to grow and add new features to please people´s needs. In recent surveys, people in the U.S. prefer to use the service for two main reasons, they want to make sure the order is correct, and they want to take their time seeing the menu(’11 Stats That Prove the ROI of Online Ordering’, 2018). As more of these apps come out, the demand is higher for them to make something nobody else is doing. What makes them different from previous food delivery services is that they include all sorts of restaurants, not only “fast foods”. This in particular makes people more willing to order from these services, as they can have a night in with foods from their favorite restaurant.
It was needed that restaurants could find a balance between their own business and the delivery business, as one or the other could easily be unattended with the demand it´s having. Many of them started separating their delivery orders from the ones in-store and began creating delivery hubs or second assemblies in their kitchens in order to attend these orders faster so none of their businesses were affected. Darren Tristano, president of Technomic which specializes on the food industry business, said more restaurants should adopt this as delivery will grow rapidly as the years pass, especially among young people. (‘Restaurant food delivery heating up’, 2016)
It’s having a huge impact currently, as its even been considered that at one point people would just stop cooking and resort to these apps alone. Although it’s highly unlikely, the fact that it’s even being considered shows how rapidly this industry is growing. With the creation of “dark kitchens”, which are used by restaurants to cook their meals outside of it in a kitchen with no name and no brand with the purpose to only act for delivery, they show their commitment to please the consumer preference of home delivery while also saving money in rent and serving staff. (Cheng, no date) This helps to create a more efficient menu and faster delivery times, which is what people demand on a daily basis.
One particular app, Deliveroo, has started giving out this service in May 2017. They sell the concept to existing restaurants and offer their “dark kitchen” service so they don´t have to invest in making one themselves. The benefit lies on the efficiency of it and a large boost in sales. The app service, called Deliveroo Editions, is able to offer and recreate the restaurant´s food and deliver it to customers. For them, it has multiple benefits as they can offer this service from a single location and it allows them to create a huge variety of foods from there, so they can have multiple deals with multiple restaurants. This model also helps restaurants update their menus and adjust some plates for delivery purposes, even identify when one dish isn´t performing well and quickly change it for something else. (‘The Rise Of The Dark Kitchen’, 2018) It is still unsure if this service will grow and develop as it´s fairly new, but more restaurants seem to be going on with the trend and could possibly become a regular thing.
As it progresses, online food business is expected to grow by 10% in the upcoming years and that by 2030 most meals cooked at home are probably ordered online and delivered. (Moore, 2018) The suggestion of “kitchen robots” and “robotic delivery” is also been made as Just Eat, one of the biggest food delivery apps in Europe has already tested self-driven robots to bring orders to customers, becoming the first app ever to do it. It was tested in London, Berlin and Estonia. (Self-Driving Robots Will Start Delivering Food For Just Eat And Others: EBSCOhost, no date) It is as of now, not something particularly viable as it hasn´t taken off yet, but in Europe and Just Eat alone there are more than 19 million active users and the service offers around 64,000 restaurants in the continent and has grown to be a billion dollar company. (Just Eat £5.5bn valuation: online takeaway company now worth more than M&S | Business | The Guardian, no date)
On November 8th a new app started out in Ireland, UberEATS. It has been around since 2014 in the U.S. and it´s now part of an international market. It is expected to be in the same standards as the ones I previously mentioned, which are part of the market already. Apparently, a lot of people were expecting this, since as soon as it was announced around 30,000 people downloaded the app before the service was available. The restaurants are also able to get access to its data insights, so they can take feedback and continue their growth. (Reddan, no date) As more and more services are willing to invest in more places over time, it´s clear that there is huge demand for the service currently.
The reason for the huge success of these apps in the industry is believed to be that they provide most of the logistics for the restaurants, so they only have to focus on making the food. The apps take a fixed margin of the order and a small flat fee from the customers in order to make their income. (Kauffman, 2017) There is apparently no limit as to how many restaurants can be part of the platforms, so that helps them grow rapidly. One of the main reasons they rise in potential is because of the quality of the service and restaurants provided. Once someone finds an app that suits them and has everything they need, it´s very unlikely that they will leave for another one. Some are even offering monthly subscriptions, in which you get free delivery in all orders, no minimum, for €9.99 a month, which can suit you if you order at least 4 times a month, since for every order a fee of around €2.50 is charged, for a minimum order of €10.
Changing costumer habits happen when a new option appears that pleases one need we didn´t know we had until then. This is why these apps bring something new that grows rapidly, they offer convenient options that appeal to a new developing market. When a good service is provided, is not a plus for the restaurant only, but for the app as well, creating a loyalty in a new customer that is most likely to recommend both to someone else. They´re also easy to use and after a few simple steps you can begin ordering from your favorite places. So, is there something bad regarding this service?
These apps have their pros and cons. Everyone has their own preferences when it comes to food, so this is an important point when ordering online, as many apps offer different things. Some include meal deals, other faster delivery times, and others include high end restaurants. There really is one to please everyone, but there is just something as important for everyone and that is quality. This is a problem in many cases as when something goes wrong you don´t know who or what is to blame for the error, as you can´t complain right away and there is more than one party involved.
For the upcoming restaurants that are part of this industry it´s a great way to get new and fresh customers who in some cases would have no idea it existed if it wasn´t for the app. Usually when we get bored with the same places, we´re always looking for new ones to dine in and try. In most cases, in order to be found the restaurants end up paying a fee to stay on the top of the list and get people interested. What´s good about it too, is that the app takes care of the orders so the restaurant doesn´t have to hire a fleet of drivers, which in some countries can be composed of cars and bicycles. This helps them provide great quality of food as well. (The Pros and Cons of Signing Up with Food Delivery Apps – Innovative ideas & solutions, no date)
There´s a wide range of choices to choose from. Pretty much any type of food you can think of, you have available as simple as pressing a button and ordering. You just have to scroll and you´ll have available multiple menus of thousands of places. Most of the apps have their own rating system, so you can see how customer experience was with the restaurant you´re thinking of ordering, or the one that catches your eye. You are also free to interact and comment anything regarding your order for their future reference and feedback.
The marketing tools that are used in these apps are also a great way for the industry to take advantage of it. If the outcome is good for them, the restaurants in it benefit from the sales they are available to make through the app. It´s also important to associate with more than one, so ultimately you receive feedback and earnings from all of them and also you´re available for customers who prefer one or the other.
Time is also a huge factor when it comes to pros. When you order through the phone or directly at a restaurant you sometimes feel pressured to be quick as the other person is waiting for you to order. People who order from delivery apps are free to take as much time as they need and look through every item on the list. They´re free to compare prices and check deals from a wide range of restaurants. There´s also a comment section in every food item you add, so you can be specific and clear about what you want exactly, without the fear of someone forgetting, since it´s written. Human error can always happen, as the people who read it and make the food can easily slip through your specific demand, but most of the times they offer compensation as it´s something that they can check and corroborate that it was specified. Another important factor is that you can order even 24hrs in advance, making this great for an office environment, as they can order ahead for an important meeting or simply their next day lunch.
Some cons that could affect both the customer and the restaurant is when the experience is not the best it could be. Sometimes, regarding how the state that the orders comes in, customers take it out on both the restaurant and the delivery app they chose, when one or the other doesn´t have all the fault. This is why it´s a priority to please every type of person consuming what you´re offering, which leads to the increase of alternatives as “dark kitchens” to make the delivery service as best as it could be if you were dining in the restaurant.
In some cases, people are not pleased with absolutely everything they have to offer, so they abandon the order. This is mostly due to an app malfunction, not being able to customize orders, or not having everything as clear as they want. It´s important for the apps to be up to date with people´s demands as they keep changing and every day there´s a new issue that someone finds that can be fixed for a better customer experience. (‘OrderTalk_2017_Report_PH2.pdf’, no date)
Regarding time, this can also act out as a con. People these days are always in a rush and it´s hard to please everyone in the time slot they have available. The CEOs of these big companies are aware that as a customer this is one of the main priorities, this is why in every app it´s specified around how long a specific restaurant takes to make your order and deliver it. If they fail, a bad review can make someone turn away. This is a con for the restaurants as well, since if they want to be the first choice for customers, they have to be up to people´s demands or they´re not even considered as an option. So, what´s next for food delivery apps and the food industry?
We are living in a digital era, so it´s likely that it just keeps growing and evolving. As days go by, new improvements and discoveries are being made to make your lives “easier”. The business keeps innovating and keeping up with new trends or making them first. We know that people are always going to find new ways to be satisfied. It is expected that before ordering, people will be able to see an estimate of what the food will look like, the portion size and ingredients. Caloric intake is important, as people are becoming healthier and choosing healthier options.
Apps offer a customer friendly experience, which is why we are very drawn to them. They’re supposed to make things faster and better for us and save us time since we don’t have to rely on web browsers or calls anymore. This is why food delivery apps are rapidly becoming part of our normal life. Consumers are able to take their time, double check, track, and even compare prices of their orders to other restaurants.