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Food on demand: How app marketplaces are ushering in a new era of convenience for customer

By : Jon Lawrence

September 21, 2017 08:00 AM

Being able to have food delivered to you is certainly not a new phenomenon; the service has been available in many countries around the world for decades. However, as with countless other industries, food on demand has been disrupted by the internet and the days of digging a takeaway menu out of a drawer and making a phonecall are long gone.

 

Ubiquitous Wi-Fi and fast, reliable mobile data connections mean that the smartphone has replaced the stash of well-thumbed menus as the first thing people reach for when they would rather order in than cook for themselves. Services like Grubhub in the US and Deliveroo in the UK (and elsewhere) have blossomed in recent years, and new competitors are coming to the market on what feels like a monthly basis.

 

Giving Customers What They Want
There are plenty of reasons why the market for food on demand has grown so dramatically, but at the centre of this growth is convenience - consumers love being able to open an app on their phone, choose a meal, and have it delivered to their door with just a few taps.

 

Of course, a wide choice of restaurants and types of cuisine also helps attract customers, as does the ability to take payment using cash, credit card or a platform such as PayPal. This is crucial in what is becoming an increasingly cashless society, as accepting card or PayPal payments has removed one of the common barriers to a customer completing an order - not having enough physical cash on them to pay for the order when it arrives.

 

A fine Balancing Act for Restaurants
Partnering with food on demand platforms opens up 
a whole host of new opportunities for restaurants. They get exposure to a whole new customer base they may not have previously been able to reach, and with this comes an increase in orders and revenue. Restaurants that join Grubhub see their takeout orders increase by more than 20 per cent on average, while one in five restaurants gets more than 100 additional orders per month as a result of embracing the platform.

 

This jump is great news for a restaurant's bottom line, but with it comes a new set of challenges that businesses, particularly smaller ones, must be wary of. Where once order flow was controlled purely by front of house staff and the queue inside the restaurant was a good visual indicator of the number of orders likely to be flowing through the kitchen, now restaurants have to contend not only with physical customers, but also with on-demand orders coming in remotely. This adds an extra dimension to managing the kitchen and raises the risk of orders being lost or special instructions being ignored, both of which add to customers' waiting times, lowering satisfaction. An increase in orders for delivery also brings with it an increased need to coordinate delivery drivers, as again, the longer the wait, the less satisfied the customer will be - and the less likely it is that they will place a repeat order.

 

This, coupled with the pressures front of house staff can feel when they are juggling a busy bar with managing the flow of online orders, means some restaurants may need to make some operational adjustments if they are to exploit the potential of food on demand.

 

Minimising the number of partners and solutions they work with inside the 'last mile' of getting the food to the customer can reduce the risk of bottlenecks and similarly, having one single solution where staff can view all orders will dramatically cut the chances of an order being missed or prepared incorrectly.

 

Still Plenty More Room for Growth
Food on demand is here to stay, and is likely to snowball as technology evolves. Figures from Morgan Stanley show that while the travel industry benefitted from 41 percent online penetration in 2016, this figure stood at just five percent for the restaurant delivery industry, suggesting there is plenty of room for expansion in the market.

 

For restaurants of all sizes, from small independents to national chains, the need to embrace food on demand is critical. See it less as just another channel for customers to use and more as a key foundation on which the business model should be built, and restaurants will be well placed to be at the forefront of food on demand for years to come.

Jon Lawrence

Sr. Dir., NCR Hospitality Solution Mngt and Product Marketing

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Jon has been designing and delivering technology solutions for two decades. At NCR, he helps define, develop, and market solutions to restaurant operators across the globe. In this blog series, Jon shares his insights on consumer mobile apps for restaurants.