I don’t mean to alarm you but there are flying burgers on the horizon…
The hospitality industry has changed. So have audience demands and technologies. But how are brands being impacted amidst the rise of third party delivery platforms? Is it market sabotage? Can robots reliably take over deliveries? And will takeaways really be delivered by drones in years to come?
This week I read a fascinating column by MBS news titled ‘delivering satisfaction’, which highlighted just how much the restaurant market has evolved in recent years. With the rise of smartphones, delivery-based apps and a huge uplift in what I’ll call the ‘easy eating’ trend, traditional restaurant dining is increasingly being replaced with eating in, at minimal effort.
‘Easy eating’ trend sparks rise in delivery brands
The classic takeaway setup is still popular (because let’s face it, chilling at home in your pjs, with a glass of Cab Sauv and Netflix never gets old…), but the food we are choosing is more diverse and healthy. And the delivery market has recently exploded, with factors such as remote working, an expanding taste for global cuisines and pop up eateries all contributing to growth. This behavioural shift has been confirmed by Deliveroo, who cited a 20 per cent uplift in lunch orders, 20 per cent more deliveries on a Monday, 10 per cent more deliveries Monday to Wednesday, and a 34 per cent increase in people ordering healthy dishes (source: The Guardian, March 2017).
For small to medium foodie businesses who can’t afford the overheads of restaurant infrastructures or lavish marketing budgets, piggy-backing onto delivery platforms like Deliveroo, Uber Eats or Just Eat seem the ideal opportunity to raise brand awareness, because a) they make facilitation easier, leaving you to perfect the product, and b) they hold the key to a vast audience, just a few taps away, removing the need for marketing – or so it would seem.
Deliveroo was estimated to hit six million UK customers before the end of 2018. It boasts 45,000 daily users in the UK and was the fastest growing company in Europe between 2013 and 2016. Out of the 15,000 UK restaurants served by Deliveroo, only 5,000 deliver their own food (source: Business of apps, Feb 2019).
Subscription-based delivery brands retain better control
Increased awareness of the importance of healthy eating has also carved out a new space in the market for delivery services. Both Gousto and Hello Fresh are meal kit brands who have capitalised on our time-poor lifestyles, delivering a healthy, personalised diet to our doorsteps. Even Amazon is jumping on the bandwagon, which is hardly surprising as the meal kit industry is expected to generate $10bn (£7.2bn) globally by 2020. Scaling up is key. Gousto is aiming to “help UK families serve 400m nutritious home-cooked meals” in total by 2025, (source: Telegraph, March 2018). They use external couriers, but are able to retain more control over their brand experience than restaurants using third party promoters, as people book directly through their website or app. Equally, they operate a flexible, subscription-based model that works towards cementing brand loyalty, encouraging repeat purchases, enabling data-capture opportunities and attracting new customers though free-month referral incentives.
Meeting demand VS brand building
The same cannot be said for restaurant brands using third party platforms. The more reliant brands and restaurants become on them to attract customers (whether start-ups or established chains), the more they relinquish control of brand experience and brand building opportunities. But perhaps this is the price they have to pay in order to meet consumer demand and stay front of mind. After all, working with Deliveroo has been worth a total of £470 million ($582 million) in revenue to partner restaurants and their supply chains in the UK (source: Business of apps, Feb 2019), so is their cash better invested in partnering with the platform than on ads?
See you later, data
Another thing to keep in mind are the insight and marketing opportunities missed by restaurant brands, due to third party ownership of customer data. Whether it’s a customer’s order history, frequency of purchase, preferences, or average expenditure, the platform holds the power and can start building personalised marketing plans to bolster their own brand perception above that of their featured restaurants. Ironically, it seems they are biting the hand that feeds them.
The impact of delivery platforms on brand
There are several implications concerning brand and marketing strategy. Brand 1 (the food provider) must now increasingly consider how to factor Brand 2 (the delivery platform) into their business strategy, finding the balance between profit and loss. The Deliveroos of the world can drive huge sales and much bigger reach for sellers, thanks to heavy site traffic and brand awareness, but this comes at a cost. Equally, the more popular you are online, the higher the wait time and more pressure to achieve an excellent customer experience. You are less able to control the flow of orders and risk losing customers who simply can’t be bothered to wait, to other restaurants within the platform. Online orders often take precedence over in-house orders, meaning that the loyal customers who do visit you in house, can be left unsatisfied or disrupted by delivery drivers or bikers hanging around waiting to collect food.
When using a delivery platform, the consumer views your brand as a meal above all else. Choices are led by product, not brand in their own right, nor experience. If convenience and comparison is what people want, then fine. But just how far can your product speak for you? Particularly when you don’t have full control of delivery times, meaning that your wonderfully prepared and perfect meal could turn up stone cold… surely your products need to be supported by emotional connections and good experiences with your brand, to keep customers coming back.
Does it come down to how creative and memorable your marketing is before engagement on the platform? And how can you possibly compete for ad space with the likes of the platforms themselves?
Do customers even care about your brand when they are choosing from a platform? Or are filter categories (such as cuisine type or price) simply enough? What we do know is, positive experiences with brands mean good reviews and good reviews mean brand trust. So even if a consumer is driven by a filter category alone, they will consider how well rated the provider is. Surely investing in brand building can only strengthen your position, keeping you front of mind and recognisable.
Bad couriers are bad for business
Terrible courier experiences can completely sabotage your brand. If everything runs smoothly up until delivery, yet the item fails to show, gets delivered late or by a driver with terrible customer experience skills, it’s obvious that this reflects badly on your brand. Because a well-considered end-to-end experience is now expected as standard. Certain consumers will avoid brands completely if they are associated with bad couriers. Ensuring your couriers are vetted and rated as thoroughly as your brand’s digital purchase experience, is key to cementing trust, recommendations and repeat purchases.
The future is… flying burgers?
Utterly bonkers isn’t it, but it will be a reality before we know it. Companies such as Teleretail (a Swiss start-up) are already developing automated delivery robots, and the likes of Amazon, Google and Mercedes-Benz are looking into developing their own delivery drones. Whether you think this is genius, dangerous or downright creepy, there’s no denying that it’s going to completely reinvent the delivery experience, by removing human interaction altogether (source: Cassandra Daily, April 2019).
This raises questions for me around security, hacking and how companies will navigate these delivery bots as an extension of their brand. I guess we’ll have to wait and see, but in the meantime, I’m dreaming about flying burgers.
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