If we were to talk today about how we enjoy non-home food, food delivery apps is a bound term in that discussion. Food delivery has transcended from being an auxiliary service to becoming an essential service upon which a lot of restaurants count their business-volume and revenues. One in every five smartphones has at least one food delivery app installed - speaks a lot about the popularity and growing market for on-demand food delivery!
As soon as we talked about the ‘one food delivery app,’ there are a few names that would have hit everyone’s thoughts. UberEats, Grab, Deliveroo and GrubHub are some of them. There are a few country-specific players like Zomato, Go-Food/Go-Jek, and Swiggy that have carved their own niche in specific markets.
Revenue - The revenue from food delivery apps has already crossed the $107 billion mark in 2019.
Revenue Growth - At a CAGR of 9,9% between 2019 and 2023, the revenue is expected to cross $156 billion in 2023.
Market Leader’s Volume - The aggregator or the platform-to-consumer model leads the market, contributing to more than 50% of the 2019 revenue.
What seems like a few simple swipes for a user is a grand culmination of lot of technical and business-aspects for the app-creator. Creating a food delivery app is a delightfully daunting exercise that involves putting together a lot of components.
For a food delivery app to function, it must have its network of restaurants. The restaurants need to sign up for your services, with the belief that your food delivery ecosystem will contribute to their revenues.
2. The Delivery Executives
The small-yet-significant bridging between the restaurant and the user’s location has to happen through food delivery executives. These people are independent service providers, called ‘delivery partners’, who will pick-up the food from the restaurant and deliver it to users through their own transport.
Needless to say, the users order the food from the restaurants, and pay for - the food, and sometimes, for the delivery service. . The users form the profit-center of the food delivery app ecosystem.
All the processes and the entities listed above can perform the desired tasks only if the required technologies fall in place. The technologies include GPS and mapping, assignment of delivery executives using algorithmic methods, payment gateway integration and a centralized review and rating system for the restaurants and executives.
There are different channels from which a food delivery app earns its revenue. It is only the diversity of these revenue channels that makes food delivery an enticing business opportunity. The revenue-inflow is assured in some way or the other.
The platform takes a cut from the restaurant’s profit, based on the number of orders. This can be treated as a commission given by the restaurant, as it was the platform that facilitated that particular order. The commission-per-order might be minimal, but it surely adds up to big numbers when volumes are considered.
In most cases, the delivery is free of charge. However, depending on the demand, the customers are charged a delivery fee. The fee might be flat or variable based on distance. The ‘demand’ does not only depend on the volume of the orders but even weather conditions - the delivery charge might be high during monsoon.
When a customer cancels the order, a cancellation fee is levied. The fee helps deter the instances of cancellation and booking of stray orders. It cannot be denied that a considerable amount of computing power has gone into booking the order!
Restaurants require exposure in the right platforms, and there’s no better platform than a food delivery app. Restaurants can pay the food delivery app for sponsored promotions like banners and priority-listings for searches. This is a symbiotic system where both the platform and the restaurant can find monetary benefits.
On-demand apps have established that the users are willing to pay for value added services like priority delivery and premium memberships. The food delivery app can have services like ‘no delivery charges’ and ‘priority delivery’ or ‘assured delivery time or cashback’ which can be made available to customers at an extra cost.
Some customers might not want just a one-off delivery but regular deliveries from restaurants. Such customers can be charged an upfront fee for food delivery for a certain stretch of time, like a week or a month or a quarter. This benefits the customers as they do not have to go through the hassle of ordering every time. It also helps the platforms, as the cost is paid upfront.
For the food delivery app to work, certain features need to be put in place. Every step involved is vital to the execution of the order in the most efficient way.
The account of the user needs to have all the essential details, and that should serve as a unique identifier for the user. The account should be able to accommodate multiple addresses, and also should keep a track of the history of the orders of the user.
These attributes will help create customized promotions, and also in quickly assigning delivery partners through smart and intelligent analytics.
The account creation has to be made simple and easy for the user. The app can also consider giving the users an option to create an account using legacy credentials like Google and Facebook.
Listing Of Restaurants
The delivery of food can only happen when the restaurants sign up with your platform. Signing up with a restaurant is not just about enlisting, but about digitizing the menu, input proper prices for each item, and even assign the availability of each item. The restaurant should be provided an exclusive app that tracks all the orders placed with the restaurant, and also sets the availability of items.
The restaurant-lists and menus need to be managed on a robust database, preferably on the cloud. This would ensure minimal downtime and quick contingencies.
The user, upon opening the app, is shown a list of restaurants in the delivery-range. The user opens the menu, orders what they want, and can check out. In some cases, they can choose to pay on delivery or by using digital payment systems. The order request is sent to the restaurants and the delivery executives available in the area. The restaurant and the delivery executive accept the request for your food order.
The assignment of the delivery executive is managed by complex algorithms. They take into consideration, various factors like the
The acceptance of an order is completely contingent upon the payment being fulfilled. The users are presented with a lot of choices to make the payment. The options include credit cards, debit cards, internet banking, wallets, and UPIs. In addition to that, especially in Asian and African markets, cash is also offered as a payment option.
The payment can be facilitated by using the services of payment providers like BrainTree and PayPal. Since these payment facilitators have already done the task of tying up with banks, you do not have to spend your time setting up the payment channels.
One of the greatest advantages presented by on-demand apps is the way through which you can track your order. The combination of the GPS and mapping tools brings you real-time tracking of the movement of the delivery executive.
The mapping and navigation services offered by Google and Apple seamlessly integrate in the apps for Android and iOS, in that order. These services give an updated answer to constant customer-questions like ‘Where is my order?’ And ‘When will my order arrive?’
Irrespective of the customer using the map interface on the app, they need to be updated on the progress. There are direct ways in which the customer can be updated, the most common of them being SMS and Push Notifications.
SMS updates can be effective by tools like Twilio. The platforms provide apps an option to push notifications to the user. These notifications can also keep the customers updated about offers and promotions.
Rating & Reviews
The rating and review mechanism keeps the entire ecosystem of food delivery democratic. This helps the platform decide which restaurants serve better food. The rating also applies for the delivery partner - it is based on the experience they offer in terms of promptness and politeness.
It may seem that there’s not much to do to make the process of food-ordering better. However, a few simple additions are bound to increase the appeal of your app.
Search & Filtering
Let’s admit it! When we open a food ordering app, we’re mostly sure of at least the cuisine we’d want to enjoy! If there’s a filtering option, it makes the experience of ordering efficient. The sorting and filtering can also be extended to aspects like veg/non-veg, delivery time, ratings… and even the availability of a specific dish.
Offers & Coupons
Customers are quite likely to be hooked to your brand if you were to offer discount coupons, and food-delivery is not an exception. The offers can be directed towards incentivizing loyal customers, retaining long-lost customers and delighting new customers.
As seen earlier, putting together a food-delivery application involves bringing together various components and seamlessly integrating them. The integration should facilitate a smooth ordering process.
You can choose to partner with a company or hire a team of dedicated developers. Alternatively, you can also choose to customize a white-label food delivery app. This saves you a lot of time and money..
If the idea of a food-delivery app business is simmering in your head, all you need to do to turn on the heat is to get in touch with our team of engineers! We will take care to not only cook it in terms of development and components, but also garnish it in terms of UI and branding.