The conventional method of delivering meals has been dramatically transformed by on-demand food delivery businesses.
Individuals have actually ordered more food than ever before during the Covid outbreak, which is a significant deal for business because, although on the one hand, the pandemic was causing people to close down their restaurants, on the other hand, on-demand food delivery was functioning as a silver lining for them.
And right now, apps for on-demand food delivery are progressively changing the way people eat.
Due to their speed and convenience, on-demand meal delivery applications are growing in popularity among millennials. This enables you to enjoy your favorite dishes in the convenience of your own home.
Given that restaurant owners don't need a significant food delivery infrastructure, this might be a win-win situation for both aggregators and eateries.
Due to this, it is now more important than ever to have a successful on-demand delivery system for your company. You can accomplish this by either hiring the best-devoted engineers or outsourcing to a team of committed software developers.
However, you should be sufficiently familiar with the on-demand delivery platform before you start corresponding with your software development team.
I'll discuss the many kinds of on-demand platforms in this blog, along with their advantages and disadvantages. But first, let's examine the state of the food delivery sector today.
What Does the Present-Day Food Industry Look Like?
Dominos and the on-demand food delivery businesses Grubhub, DoorDash, Uber Eats, and Postmates presently control the US market. These food delivery services rapidly established a solid reputation.
UberEats was valued at $20 billion in 2020, DoorDash at $13 billion, and Postmates at a stunning $1.85 billion. These businesses, along with Domino's Pizza, account for 90% of the food delivery market in the United States.
But 338 meal delivery businesses that raise more than $5 million in the US alone are attempting to duplicate this achievement.
Although users and investors are giving these businesses a lot of attention and high acclaim, it's still uncertain what the future will bring for the meal delivery industry as a whole.
The standard method of food delivery partly resembles this: clients place phone orders for local delivery of meals and wait for the restaurant courier to bring the food to their door.
The food market is, however, evolving quickly due to developments in digital technology, as we have seen in all other industries. Modern consumers now anticipate a similar experience when buying food after becoming accustomed to placing orders with maximum expediency and minimal human interaction through websites and smartphone apps.
To retain customers, restaurants that offer takeout services must stay up with the times by creating online ordering apps. With the use of technology, takeout meals may be delivered quickly and with little to no human involvement.
Types Of Food Delivery Apps
The three most common on-demand meal delivery methods or applications in use today are listed below. They can be grouped into:
- The Platform To Consumer Apps (Order Only Business Model)
This is a sound business strategy, particularly for new players. This allows the proprietors of the program to simultaneously link customers to a variety of restaurants and diners. In other words, app developers are able to offer a platform for a number of restaurants to sign up and offer customers meal delivery services.
- Apps for Delivery Service Aggregators (Order With Delivery Business)
Except that it also handles logistics, this model and the business model above are extremely similar. As a result, the application's owner accepts the user's order and delivers meals.
The best part about this concept is that since the restaurant doesn't have to operate its own fleet, it is a very viable business model. Additionally, it enables you to capitalize on the clientele already using your program. Additionally, in this arrangement, food deliveries to customers' doorsteps are often coordinated by app owners with a number of different courier services. The most well-known meal delivery services, including Grubhub, Swiggy, and UberEats, have followed this strategy.
- The Full-Stack Apps for Food Delivery
As the name implies, one service provider serves the complete food chain in this business model. This indicates that the entire process, from meal preparation to delivery to the customer's door, is handled by one entity.
Compared to the first two, this company strategy involves a considerable capital outlay. Popular restaurants that build takeaway and delivery apps typically use this business model to provide extra services to frequent clients. This increases revenue by enabling clients to place meal orders while relaxing in their own homes. The most well-known illustration would be Domino's Pizza.
Additionally, some business owners employ ghosts or cloud kitchens to cook food. After that, you decide to use the cloud kitchen business model to serve meals to your clients under your own brand. In this instance, though, there isn't a lunch option available at the eatery. All you have to do is take the customer's order on the platform and deliver the food.
Factors That Determine Your Platform's Success
Food delivery is a complex procedure that involves numerous stakeholders at once. It's critical to focus on particular KPIs or key performance indicators in order to monitor the organic growth and success of your food delivery service.
Here, let's look at some of the most common application KPIs.
- Number of food deliveries
The number of successfully completed deliveries is one of the most crucial indicators in a food delivery business. A number is typically represented as the total of deliveries made during the specified month or quarter.
When calculating the growth rate of your food delivery service, it is critical to know how many orders you are accepting. Stakeholders in the venture capital industry are hoping for large improvements in the volume of delivery. Typically, expanding companies aim to quadruple their monthly deliveries.
- Return on Shipment
Any business's main objective is to turn a profit. Knowing how much profit you make from each shipment is so crucial. You can use this information to find out which restaurants are the most profitable and to reroute deliveries to underperforming establishments.
Additionally, this statistic accounts for expenses including salaries, advertising, and transaction fees.
- Average Order Duration
The typical order time is a gauge of how quickly your business can process orders from clients. When a customer makes a food purchase through the app, an order is identified, and when an order confirmation is issued, it is recognized as completed.
The time spent on all deliveries divided by the total number of orders completed yields the Average Order Duration KPI. KPIs are crucial because they aid in eliminating sluggish couriers and eateries and further enhance application performance.
- Transitional Distance
This KPI calculates how long it takes a carrier to deliver a package. The time it takes to pick up and deliver your order to your door is included in this.
This metric evaluates the efficiency of the delivery route and the delivery agent's pace. As a result, the data collected can be used to speed up delivery and boost customer satisfaction.
- Driver On Order/Idle
This KPI calculates the proportion of drivers who are now making deliveries or waiting to make deliveries. This aids the application's evaluation of the driver network's efficacy.
The time required to receive the maximum amount of orders can also be easily calculated using this statistic. This will make it easier to decide how many drivers should be on the road at any given time.
- Customer lifetime value
The average revenue a user generates over the course of their membership is tracked by the Customer Lifetime Value (CLV). The CLV rises as the client utilizes the program for a longer period of time.
You can easily monitor the effectiveness and performance of your food delivery system with the help of all these data, and you can also find new ways to enhance the user experience.
A Conclusion
Understanding each of these business models is crucial when deciding which one to use for the launch of your own food delivery app.
It is generally ideal to start by developing an MVP with fundamental features that accurately reflect how to use your software and then gradually roll out new upgrades based on user input.
