People all over the world are quite laidback when they think about their meals today. The dramatic rise in the on-demand food delivery app platforms has made it so simple for anyone to order whatever they crave, whenever they crave while watching their favorite season on Netflix.
Home delivery services have always been an area of investment for the Pizza delivery chains like Pizza Hut and Domino’s. If we examine the current situation in the US, the food delivery market is dominated by Domino’s and other on-demand food delivery apps such as Postmates, Uber Eats, Grubhub, and DoorDash.
If you catch a glimpse of the numbers researched by Statista, as of 2020, Postmates is valued at 1.85 billion USD, DoorDash at 13 billion USD, and Uber Eats at a whopping 20 billion USD. It is observed that these companies and Domino’s cover 90 % of the US food delivery market. Other than these successful ventures, there are around 338 other food delivery businesses that have received a 5+ million USD funding that is trying to crack the same mantra of success.
This blog offers insights into these two types of on-demand food delivery app markets that are classified as Aggregators and New Delivery apps. Let’s dive deep into the topic to gain a better understanding of what they are.
Current On-Demand Food Delivery Service Scenario:
What we’re enjoying today is the traditional food delivery model: customers order food using their phone and the restaurant courier delivers their order. From the prior times, Pizza has been a pioneer of this conventional model.
But certainly with the advent of technology the food market has magically transformed itself. Customers have grown prone to order almost anything using mobile and web applications. This gave rise to applying the same convenience to ordering food online. No human interaction plus maximum convenience.
After on-demand app development
flourished and became a household name the restaurants offering their home delivery services had to equip themselves with an app so that they can retain customers. There was a radical change of a healthy 55% of the customers who prefer ordering food with no human interaction.
How is digitization acting as a boon for Food Delivery Businesses?
The pizza chains such as Pizza Hut and Domino’s have been offering home delivery services for years. And through this new wave of technology, they’ve even designed ordering systems using our smartwatches, smart TVs, and even our cars.
This invited a business model where one can order whatever they want to and not only Pizzas. This brought a storm among the users. Now they had the freedom to order their favorite food whenever they wanted to just in a few claps.
Having learned a bit about the way on-demand food delivery apps have taken over our conventional habits let’s understand the type of food delivery apps that exist today.
Types of On-Demand Food Delivery Apps:
Pizza as we learned above has been a pioneer in the on-demand food delivery sector. But now the on-demand food delivery app startups have amped up the game by offering myriad food options over a single platform.
There are two basic types of food delivery models. Let’s see what they are.
1. Restaurant-to-Customer Delivery: This is what pizza chains offer.
2. Platform-to-Customer Delivery: This is what other on-demand food delivery apps like Postmates or Zomato offer.
As per McKinsey, the platform-to-customer delivery services offer order-focused deliveries (also knows as Aggregators) and logistics-focused food delivery (also known as New Delivery). Let’s know that these two models are in detail.
The initial food aggregators were just a medium that helped the customer reach its desired restaurant. They offered different cuisines over a single platform being it a website or smartphone application.
Now, users could compare different restaurants, check out their ratings, and user reviews, and then place orders. An aggregator would receive the order and would notify the concerned restaurant. The restaurant had to make arrangements to get the order delivered.
Grubhub (US), Hero (Germany), and Just Eat (UK) all started as food delivery aggregators.
Today they’ve achieved international recognition and offer their services in various corners of the world.
This model was convenient but the users eventually demanded a more personalized and faster online food delivery experience. This made the aggregator’s design platforms that offered a complete food ordering experience without being redirected to the restaurant’s website. And so today all the on-demand food delivery platforms have their payment gateways, delivery fleets, and much more.
On-Demand Services and New-Delivery Platforms:
The Aggregators allow their users to compare prices, reviews, menus, and the option to order from various restaurants from a single web or mobile app. But in addition to this, the “New Delivery” platforms also offer logistic services to partner restaurants.
The new delivery services made it possible for restaurants to deliver their food to their niche’s doorsteps without having to worry about their payments, insurance policies, maintenance costs, and much more. This gave them a lot of time to concentrate on the cuisine they were offering and improve their customer service.
This revolution gave many small restaurants recognition and helped them reach a wide customer base that just wasn’t possible before.
Like the ‘Platform-to-Customer Delivery’ platforms, these platforms don’t work with the third-party platforms but instead have their delivery fleets and in-house cooks. They have a dedicated process for everything ranging from cooking their cuisines to delivering them to their customers.
Monetization Techniques used by New Delivery Platforms:
The on-demand food delivery platforms use a simple strategy to monetize themselves. They tend to charge the customers as well as the restaurant partners with a fixed margin. You might be questioning yourself that is this margin enough for platforms to pay the drivers, maintain their vehicles, and also make a profit at the same time? What you’d be shocked to know is that despite these costs these platforms have managed to earn up to 57% as EBITDA. Plus, as new restaurants join the platform, they will earn more.
Technource & On-Demand App Development:
Technource has worked on several on-demand projects and created mobile apps such as ‘Just Errands’ and web, Android, and iOS apps such as ‘Hatch’. The first allows customers to avail the services or products they demand while the latter facilitates package delivery at the quickest.
We’ve integrated GPS tracking, secure payment gateways, an intuitive UI/UX, user profiles, and much more to make the on-demand process simple for the user. Our 8+ years of experience in providing viable professional IT services
has made us competent enough to take on any challenge that comes our way.
We have a dedicated team of designers, programmers, QAs, and other essential personnel that make our seamless development process. We like to invite total transparency in our development process and so we follow the Agile-Scrum methodology to create apps. Scrum offers us a flexible yet disciplined overview of how we will reach our goal while adhering to authentic development practices.
We also recommend our clients opt for MVP development
. A Minimal Viable Product (MVP) helps a client learn a lot about how their product appeals to the crowd without spending all of their budgets. An MVP allows the client to learn if their product is feasible or not, gather user data, measure the efficiency of the app in real-time, and many other things that contribute to making sound futuristic decisions about the application.
If you’re a dreamer who dreams of creating an exceptional business out of your idea, then you’ve come to the right place. We love to be a part of the challenges that expand our learning horizon and invite you to have a chat with us at the earliest.