What is a food delivery app?
Food delivery apps are a type of restaurant delivery/ takeout software that connects consumers with local restaurants, grocery stores, convenience stores, etc., by providing a convenient way to order food that's delivered to their doorstep. Restaurant delivery/takeout software offers users more control over the delivery process. Consumers can dictate when and where they would like a product to be delivered as well as track the delivery process end to end.
Benefits of using a food delivery app
Food delivery apps have several benefits that can lead to increased revenue when partnering with third-party delivery services. The following are the most common reasons why restaurants use this software:
- Reach more customers: One of the major immediate benefits of food delivery apps is their ability to increase the visibility of a business by reaching more customers. When a restaurant or retailer joins a food delivery app, new customers can discover nearby restaurants, browse different menu items, and decide to place an order.
- Convenience: Food delivery apps allow customers to order food from their favorite restaurants at any time and anywhere using their mobile devices or tablets. Using food delivery apps makes it easier for customers to simply order online instead of having to go through the hassle of calling a restaurant and ordering through the phone. Additionally, grocery delivery is a new feature that grocery stores are now able to offer by partnering with delivery apps offering new levels of convenience for shoppers.
- Boost visibility: When it comes to competition, the percentage of restaurants and establishments that offer food delivery services is quite small. Making restaurants more accessible to people through delivery apps put these restaurants ahead of the game compared to competitors that don’t use them.
- Outsourcing delivery: As a business, not having to worry about the delivery process is one less thing to manage. Working with a food delivery service allows restaurants to focus more on coordinating between the kitchen and front-of-house and prioritize dine-in customers. Additionally, restaurants don’t have to incur any costs associated with delivery, such as vehicles or transportation, gas, car maintenance, etc.
- Multiple payment methods: Food ordering apps often integrate with multiple different payment methods allowing more opportunities for customers to spend and providing a seamless checkout experience.
Impacts of using a food delivery app
There are many positives that can come from using food delivery apps. However, there are some negative impacts that restaurants should be aware of when deciding to use a food delivery app service.
- Negative effect on food service: With the growing demand for food delivery and in-home dining, more restaurants are forced to restructure how they do business to adjust to consumer behavior.
- High commission rates and fees: While food delivery apps offer new streams of revenue for restaurants, there are high commission rates that these apps charge. A lot of times, restaurants end up just breaking even or are forced to increase their menu prices to cover the cost.
- Lack of data sharing: Food delivery apps have access to data from all the restaurants they work with, compiling their databases with consumer behavior such as eating habits, what and when they order, as well as restaurants’ business performance. These apps collect valuable data from their partners that restaurants aren’t always able to access.
- Delivery complaints from customers: There are a lot of steps that go into delivering food from a restaurant to the consumer’s address, creating multiple areas for error. Whether it’s delayed deliveries, improper drop offs, or poor communication with the drivers, the restaurant will be impacted most by the shortcomings of the delivery driver or service. This causes customers to leave negative reviews, and because of the interface, restaurant partners are not able to respond to unhappy customers.
Basic elements of a food delivery app
The format for an application in restaurant delivery/takeout software can vary, but a complete food delivery app will include the following elements:
- Push notification features: This feature allows businesses to send messages directly to a customer’s computer or mobile device. It helps businesses remain connected with customers, staying top of mind, and notifying consumers of any discounts to drive more activity to the app.
- Loyalty and rewards programs: Loyalty and rewards programs are a large part of retaining and growing users on food delivery apps. These products often have reward programs and monthly subscription plans where customers receive perks and coupons rewarding loyal customers. Most food delivery apps also offer first-order promotions, free delivery, discounts, and referral programs to incentivize new and returning customers. Restaurants can also host their own promotional opportunities on the app for loyal customers.
- Reviews and ratings: Reviews and ratings are an important feature of food delivery apps, as it helps restaurants understand their customers better and gain insights. Oftentimes, this feedback is what either drives or deters new customers from ordering from a business.
- Order management: Order management is an essential feature to keep a restaurant running smoothly. Restaurants are able to see a queue of orders that have been placed and are able to update order statuses accordingly. This feature also includes real-time updates on canceled orders, orders out for delivery, and completed orders.
- Content management functionality: Content management allows restaurants to easily manage and modify their banners, menus, pricing, discount offerings, etc., hosted on their page.
- Point of sale (POS) integration: Most delivery apps offer POS integration which allows restaurants to streamline all the customer ordering data in one place. This is essential as partnering with delivery apps creates an additional stream of sales that would need to be accounted for and aggregated with the rest of the restaurant’s ordering data to manage sales data in one place.
Food delivery app best practices
In order to make food delivery apps work, follow these best practices:
- Research before joining: There are a handful of different food delivery services in the market, and each operates differently on the front and back ends. It is important to research the different apps out there to determine the best food delivery app that suits a business's needs, as some apps are better in certain regions or areas. Additionally, calculating the cost of doing business, such as commission fees, service fees, delivery fees, etc., and comparing the customer experience is essential as these elements vary for each food delivery app.
- Regularly check ratings and reviews: It is important for restaurants to routinely monitor their ratings and reviews to get real-time customer feedback regarding the food experience or delivery process. This provides restaurant partners with valuable insights that they can use to make any internal changes or improvements.
Food delivery app vs. restaurant POS tools
Food delivery apps have revolutionized the ordering and delivery process for restaurants and customers. Most restaurants have their own management systems that typically include restaurant POS systems to manage and process orders. Although food delivery systems haven’t replaced the standard POS system, it has offered restaurants with additional resources to manage the ordering and delivery process as well as integrate with their current POS system.
Alanna Iwuh
Alanna is a Market Research Analyst at G2 specializing in marketing software. She is passionate about market research and data-driven insights and is fascinated by psychology and human behavior. She also serves as a co-lead of the Ebony & Allies ERG at G2. In her free time, Alanna is somewhere traveling the world, shopping at farmer’s markets, or admiring art.
