Food Delivery: 5 Early Lessons on the New Disruptor
By Aimee Harvey on Sep. 08, 2016NEW YORK -- Beyond the parameters of traditional restaurants and retail foodservice sectors comes a growing disruptive threat: food delivery services. From UberEATS and GrubHub to Blue Apron and DoorDash, the rise of an on-demand economy coupled with the prevalence of smartphone use has brought about a shift in the way consumers source and order food.
That’s the thought behind a new report, Food Delivery 2.0, from Rabobank Group, which explores the potential effect that food delivery services are poised to have on restaurants and retail foodservice outlets in the coming years. At the same time, analysts emphasize that this trend is still in its early stages and bears some watching.
"We dub this 'Food Delivery 2.0,' " said Nicholas Fereday, an analyst with Rabobank Group. "As technology lowers the barriers to entry, it threatens to disrupt both food retail and traditional takeout foodservice. These new services satisfy our increasing desire for convenience, mass personalization and our preference for managing more of our lives online."
But what are the key factors propelling the forward movement of food delivery services? And what should retail foodservice operators keep in mind as they work to combat this disruptor? In a company release, Fereday and fellow Rabobank analyst Paula Savanti identified five fundamental takeaways from this emerging trend ...
1. At your convenience
The entire narrative is anchored in convenience and what it means to customers today. The primary message must be all about “saving consumers' time and making their lives a little easier—removing the headache of what to eat tonight,” the release said.
2. Focus on food, not just the tech
Remember that the future is about food and logistics. As competition heats up in the ready-meal space, the release said, “the pricing and quality of products will be key in determining the winners.”
3. Get the last mile right
Having a cool app, or other technology, may grab consumers’ initial attention, but “it does not diminish the age-old dilemma of getting the product from A to B as quickly as possible. Getting the logistics right—with ever-shrinking delivery times—is vital in making or breaking a business,” the release said.
4. Expect some shake-out
Money is flowing freely into this burgeoning segment. But even with all these investments, who will survive? “Despite stratospheric valuations, many of these companies are struggling to make the economics work,” said Fereday and Savanti.
5. A hot topic, but not a total meltdown
The advancement of food delivery companies will not totally unseat today’s restaurant and retail foodservice players, “but we do see a long-term future for these new platforms to complement the existing routes to the consumer,” the release said.