Choose, pay, and enjoy could be useful words to summarize the advantages of home delivery. A sector that has a turnover of 74,000 million euros worldwide, characterized by the emergence of large players and the need to accelerate its digital transformation. This, to adapt to a marketing model different from that of the physical business and to an increasingly heterogeneous customer.

The success of food delivery lies in the simplicity and ease of the buying process. The customer only has to choose the menu, contact the restaurant or the delivery company through the app, website, telephone, or social networks, and pay the cost of the order. You will receive the food at your home at the indicated time.

But this process implies numerous challenges that restaurants and delivery platforms must face: how to meet customer requests through different channels? What is the most appropriate payment channel? How to adapt to consumer needs and remain profitable? How to manage the registration of restaurants attached to the platforms?

During the confinement, orders and home delivery have been the only options for selling restaurants and bars. A marketing strategy to mitigate losses due to the absence of customers on the premises, which has highlighted the need to adopt technologies that allow solving the challenges that this business model implies.

How has COVID-19 affected delivery?

One of the sectors most affected during the confinement has been the restaurant and hotel industry. They have suffered significant economic losses and have been forced to redefine their business model to incorporate and promote home delivery or collection at the premises as a sales channel. 

This sales strategy has also reached haute cuisine. The chef with 3 Michelin Stars, Dabid Muñoz has launched the Goxo brand to bring his signature cuisine to the homes of Madrid. While the El Chato restaurant, considered the best restaurant in Colombia in the Latin America's 50 Best Restaurants 2019 list, has chosen to send customers the ingredients and instructions necessary to make the menu at home. 

Thus, delivery has allowed the sector to mitigate the negative effects of the closure of the premises, managing to increase home services between 40% and 50%, according to Just Eat data.

"There are places that have gone from having 20 orders a week to preparing 150 ”, Jaume Boada, CEO of Mox in Spain.

But he has also revealed the differences between face-to-face business and delivery and the importance of digitization to improve the efficiency of the processes associated with this marketing model.

What are the challenges facing the food delivery sector?

The Eat2Go Study: The food delivery / take away business in Spain points out 5 challenges it must face:

• Search for profitability: logistical and structural transformations
• Transformation of the business model between hospitality and technology
• Sectorial evolution towards global and technological companies
• Market regularization
• Placing the client at the epicenter of the strategy

For Patrik Bergareche, CEO of Just Eat, “the main challenges and opportunities that the sector will face in the coming years are the commitment to sustainability, the regulatory framework and the application of new technologies to improve the customer experience and offer better advice to restaurants ”.

 Digital transformation is presented as a solution to optimize costs, analyze trends, meet customer expectations, and successfully manage their needs.

"To differentiate yourself, you have to make an investment, promoting digitization by focusing investment on personnel, installation, product, and technology": Jaume Boada, CEO of Mox in Spain.

Knowing the customer to place him at the epicenter of the strategy: what is the customer of the food delivery like?

Confinement has caused a change in consumer habits. Orders have increased in medium and small cities, in population centers with less than 300,000 inhabitants by 27%, and in cities with between 30,000 and 70,000 inhabitants by 7%. In addition, Just Eat has observed a change in visits to its website and app with an increase of 65% in the mornings and 48% in the afternoons. 

As the new normality takes hold, the need for social distancing will coexist with habitual consumption habits characterized by a lack of time. "Time has become the most precious value and cooking is no longer a daily obligation to become a hobby", says Manel Morillo, from ConGusto.But in addition to users with little time, there are lovers of fast food, gastronomic experiences, or new technologies. A wide variety of features that allows you to set 3 different profiles. 

The Eat2Go Study: The food delivery / take away business in Spain classifies them as:

• Low-cost delivery: Older customers with little purchasing power who link food delivery to fast food. They do not have high expectations about the products or services and are not willing to pay extra costs for receiving the food at home. 

• On-site: They are familiar with technology and social media. They share in social networks the experiences lived in the gastronomic events they attend. They seek differential experiences and are willing to pay an extra cost. 

• Digital Cosmopolitans: Young people and people of intermediate ages with a well-off economic situation. They associate technology with modernity and status and use it to solve their daily problems. They demand new experiences and are willing to assume a cost for enjoying an experience or obtaining an added value related to modernity, ecology, or innovation.

What are the technologies that allow you to manage and speed up home orders?

Regardless of the customer's profile, everyone expects to receive their order or to be able to pick it up locally in the shortest possible time. To do this, technological innovation allows:

Manage in an agile way the adhesion of new restaurants

Accelerate the registration process for new establishments by incorporating chatbots or virtual agents that inform you of the steps to follow to join a delivery platform and automatically manage the simplest procedures. 

In addition, this software can also manage the payment of registration fees through different channels without the need for travel or banking procedures. Thus, the average time of adhesion is reduced and the staff is freed from the most repetitive tasks.

Receipt of orders through different channels

Although the applications of the large delivery platforms are gaining followers day after day, brands must offer omnichannel service to guarantee a good user experience.

To the management of orders through the phone, web, and apps, we must add the incorporation of WhatsApp as a channel for smaller establishments that are not attached to the big players, and inquiries through social networks. 

The incorporation of solutions that make it possible to attend to customer requests from a tool through different digital channels reduces the costs derived from customer service and reduces the average response time. In addition, its integration with contact center software guarantees a unified customer experience.

Inform the delivery time of the order

Instant messaging applications, especially WhatsApp, allow you to communicate with the customer in real-time. In an agile and simple way, restaurants can inform the arrival time of the order, notify that the order is ready to be picked up at the premises, or alert of possible delays. The customer will know at all times when he is going to enjoy the food.

Incorporate remote payment channels

Although the apps incorporate card payment, many consumers prefer to pay for their purchases through other channels or choose to pay the order directly to the dealer. This last option can put both those distributed and customers at risk with COVID-19. On the other hand, contactless methods are a payment channel without physical contact. 

Thus, payments by phone, SMS, e-mail, or chat become a solution to prevent contagion, speed up delivery by preventing delivery people from having to manage payments, and, therefore, improve the efficiency of the process. 

To prevent the incorporation of new payment channels from increasing costs, omnichannel payment solutions automate collections and allow management to be unified in a single tool. 

In addition, for orders by phone, the regulations prohibit requesting the customer for the card data in order to prevent it from being stored on non-secure media. In order not to have to give up one of the essential channels for delivery, the most effective option is to resort to technological solutions that automate collection management. The call is derived from an IVR that asks the customer to say or dial the numbers of their card, guaranteeing the security and privacy of the transaction at all times. Or an SMS or email is sent to the customer to pay the cost of the order.

Customer insight

Thanks to the analysis of conversations with customers through digital channels, it is possible to extract insight from consumers to identify trends and needs.

Artificial intelligence or big data also allows the analysis of large volumes of data to manage product stocks, predict when more staff will be needed, or evaluate the acceptance of changes in restaurant menus.

X-ray of delivery: how much does it bill and how will it evolve in the coming years?

Incorporating these technologies will allow the delivery sector to continue its positive growth trend. The consulting firm Frost and Sullivan estimates a turnover of 74,000 million euros on a global scale and foresees an annual growth of close to 15% until 2025. And it is that 11% of the world population has access to food delivery applications. 

In Europe, the restaurant sector contributes 500 million euros, which represents 1.6 million meals a week in sales. This is reflected in a Deloitte report, which estimates greater growth in the United Kingdom, reaching a turnover of 23,000 million euros in 2023, followed by Germany, with 2,800 million and France with 2,500 million. 

Spain would be in the fourth position with 1,300 million euros. A growth that would continue the positive trend driven mainly by four platforms: Just Eat, Deliveroo, Glovo, and Uber Eats. In 2018, home food sales increased by 26% to reach 605 million euros, which already represented 16% of the sector's turnover in Spain. This is reflected in the report Sectors Studies: Fast Food and Delivery prepared by DBK, which estimates an annual growth of 6-7% in 2020. 

For the consultation, the great beneficiaries of this activity are independent companies since their meals at home for this type of business represent an increase per week of 99,000 menus compared to 77,000 for large chains.

For its part, in Latin America, Brazil is the country where the most income generates food at home with more than 2,741 million dollars, according to Statista. In Mexico, it contributes 1,332 million, in Argentina 635 million, in Colombia 290 million, and in Chile 172 million. 

Regarding the percentage of customers, Colombia is the Latin American country with the highest percentage of food delivery consumers (36%), surpassing the average index for the region by 7 points (29%), as Nielsen points out. For some restaurants, delivery meals account for 60% of total sales. Unlike the European market, in Colombia Uber Eats, Rappi, Domicilio.com, and iFood are the main players in the sector.

Food delivery lives a golden moment. Adopting the necessary technologies that allow it to be efficient while responding to the expectations of a customer who demands quality and new experiences will be essential to continue the positive growth trend.