The food delivery landscape has been undergoing significant change in the last few years. No longer limited to pizza or Chinese food, shoppers can now choose pre-portioned meal packages they can prepare themselves or have fully prepared meals from their favorite restaurant delivered to their door. Food delivery technology allows consumers to plan ahead or order on the go, adapting to the changing habits of today’s shoppers.
Technology’s Impact on the Food Industry
Online ordering portals such as GrubHub and DoorDash allow shoppers to view menus from different restaurants, place their order, and get food delivered to their door at no additional cost. Google has teamed up with some of these companies to allow shoppers to start an order directly from the Google Maps app. Fast-food restaurants like Shake Shack and Sheetz convenience stores allow shoppers to place their order in advance using mobile apps, enabling consumers to skip the lines. Another line-skipping technology, Amazon Go, has been rolled out for grocery stores. Domino’s has introduced ordering via text, smartwatch, and their “zero clicks required” app. Pizza lovers can also order from Domino’s through Amazon Echo.
Other pizza delivery innovations include vending machines and delivery trucks that cook your pizza on the way to your home or office to minimize delivery time and ensure that your order is fresh and hot. Earlier this year, food delivery companies in Redwood City, California, and Washington, D.C., rolled out robots to pick up orders from restaurants and deliver them to customers. Meanwhile, Domino’s is delivering pizzas via drone in New Zealand.
Why are Shoppers Shifting Their Behavior?
Convenience has become a significant value proposition for the food industry. 60% of consumers across markets cite speed of delivery as a key factor for satisfaction. They are increasingly migrating to online channels, a trend that is expected to continue to grow for the food category. Also, consumers are looking for new things, and online apps provide an opportunity for them to try new restaurants in which they may not be familiar. For time-strapped couples and solo diners who are seeking ways to cook fresh, healthy meals at home, meal kit delivery services are gaining in popularity.
Strategic Shift to Technology Models
In 2015, food delivery accounted for about $30 billion of consumer spending, and a survey in 2016 indicated that 20% of consumers rely on food delivery at least once a week. Restaurants are embracing the idea of growing their customer base by adding an app-enabled food delivery service. Apps such as UberEats, for example, allow restaurants to offer delivery without hiring additional staff.
- Blue Apron launched in 2012 and offers a meal kit subscription that includes both a couples’ plan and a family plan. They also offer a monthly wine subscription. The company uses an integrated ecosystem to help it manage its operations, from crop planning with suppliers to supply-demand coordination and consumer data. Their packaging is designed to keep ingredients fresh and is modified based on the season and the customer’s location.
- Plated is another subscription service, also started in 2012, founded with a vision to take on high-end grocery chains like Whole Foods with premium meal kits. It allows shoppers to choose recipes and have the ingredients for up to 16 meals per week delivered to their door. They recently launched an Android app to complement their online portal. The app allows shoppers to choose recipes and delivery days, and provides step-by-step preparation instructions complete with in-app timers.
- Freshly offers a subscription service that delivers ready-to-heat meals prepared in their Phoenix facility. With a focus on building a tech platform and facilities capable of handling hundreds of thousands of meals each month, they chose not to invest in their own delivery service, but instead partnered with FedEx, allowing them to scale quickly.
- Uber developed their UberEats app to enable shoppers to quickly order and track food deliveries. In addition, the app provides tailored recommendations, learns customers’ preferences, and shows 30-minute delivery options. The app allows shoppers to filter according to price, speed of delivery, and dietary restrictions.
The Future of Food Delivery
The time is quickly approaching when consumers will expect restaurants to have an app and will desire delivery service and more pickup options. Delivery services will offer automatic deliveries that shoppers can schedule ahead of time, such as for Monday evenings when the kids have soccer games or other nights of the week when they are too busy to cook. Shoppers are also interested in a better ability to customize menu items and choose ingredients. Meal delivery services should meet those demands and make such options available in their app, and restaurants will need to enhance their websites to improve the customer experience.
Facebook ordering is also expected to be implemented by restaurants as a way to grow sales, and even for in-store dining, consumers are wanting new technologies such as table-top ordering and checkout. Other innovations include digital menu boards for fast food restaurants that consumers can also access via smartphone.
In addition, the rise of so-called “ghost” kitchens is likely to increase, with restaurants focusing solely on the takeout market and depending on delivery services like DoorDash to serve more shoppers, without having a dining room at all.
The effects of technology on food delivery are not confined to restaurants. Grocery stores are increasingly deploying technology to allow shoppers to order online, either picking up their orders or having them delivered. We’re seeing more convenience stores implement tablet ordering systems, where the shopper inputs their order, then just waits to have it handed to them. These effects could even impact other industries such as gaming, with fast food restaurants installing video games projected onto the floor and controlled through gestures, keeping kids occupied while parents wait for their orders. The effects of technology on food delivery is a revolution with far-reaching significance.