The growing dependency on software technology has brought about the digitization of diverse industries. The food industry, in particular, has adopted modern technology extensively for streamlining business operations and satisfying the needs of today’s unpredictable customers at the same time.
Since the past few years, many restaurants have been using custom online delivery apps to improve customer satisfaction and user experience. With a Food delivery app, customers get several benefits like on-demand delivery, location and time management, and a variety of choices in food items and restaurants.
It is leading to the unprecedented growth of the online food delivery industry. In fact, the U.S. market revenue for online food delivery is expected to rise to approximately $30 billion by 2022.
The pandemic forced millions of restaurants to shut down, but online food businesses survived through it by implementing contactless delivery options and other safety measures. And now, when the consumers have become more used to the online food ordering concept, the need for on-demand food delivery apps is increasing rapidly.
Due to this reason, more and more businesses are currently focusing on developing such apps more seriously than ever.
What Is On-demand Food Delivery?
On-demand food delivery refers to the procedure of ordering food digitally through a Food Delivery mobile app.
Such apps include several features, some of which are:
Easy-to-use interface Delivery tracking Multiple restaurant/food choices Promotions and offers Multiple payment gateways Ratings and reviews
Using these apps, customers can directly order their favorite food items and receive them at their specified location. For most customers, this is more convenient than dining out, especially when it is unsafe to eat out.
Due to the continuously escalating demand, more restaurants and food industry businesses are opting for on-demand food delivery app development. Statistically, 60% of the food industry professionals stated that their incremental sales increased due to online delivery.
Moreover, restaurants that work with third-party delivery services saw a 10-20% restaurant sales volume increase, as per one report.
The food delivery market in the United States alone grows at a 20.2% rate each year and is expected to flourish similarly in the future.
Business Models For Food Delivery
For successful food delivery application development, it is essential to identify the right business model first. Using this, you can outline the costs, the value proposition, app infrastructure, and the target customer base.
Here are the main business models that can be used in food delivery applications:
ORDER AND DELIVERY MODEL
In this particular type of food delivery model, businesses have to take care of everything themselves. From handling orders to managing deliveries to partnering with restaurants, you will have to do it all yourself. Since you would head most of the services, you can charge each restaurant additional fees for the delivery.
ORDER-ONLY MODEL
Entrepreneurs who choose this model build a food marketplace themselves or hire a food delivery app developer to create a platform where restaurants can register to offer their services. In this model, the restaurants need to handle orders and deliveries themselves. You can earn around 7-15% commission from the restaurant owners if you use this business model.
CLOUD RESTAURANT MODEL
Eateries that do not have a physical restaurant space can use this particular app model. They can display their menu on the app that the customers can select from to place orders. But, such businesses cannot offer the dine-in option to their consumers.
So this model is best suited for restaurants or chefs that are just starting out their business and do not have any investment. You can test the market before launching your own food joint.
MEAL-KIT DELIVERY MODEL
While this is not a traditional food delivery business model, restaurants can develop this app for additional profits. In this, the restaurant supplies the ingredients for a dish to the clients who prepare it at home.
They offer a list of dishes and recipes, and clients choose the one they wish to recreate at home. For transporting the orders, the app owner can partner with a delivery service provider.
Understanding The Needs of Your Customers
Before beginning the food delivery app development, it is important to figure out the needs and preferences of the target audience. The ultimate purpose of any business for investing in a mobile solution is to reach out to their always-online customers and satisfy their expectations. A lot of restaurant and eatery owners do not focus on this, due to which they end up losing more customers with time.
Customers today want to stay on top of everything that is happening around them. From discovering recently opened places to ordering food while watching Netflix at their friend’s place to getting their food hot & fresh just like at any restaurant to getting real-time updates about their food delivery to getting connected with the delivery person to explain their address; the smart customer wants to know it all and be a part of it.
To develop a food delivery app that would increase your business revenue and customer base, it is important to provide a high-quality app with usable features.
Some of the questions you should focus on are:
- What are most customers looking for from a delivery service?
- Which offers are gaining popularity among the customers?
- What are the competitors providing to customers that are better than your service?
- If you have a delivery app already, how are your present customers interacting with it?
Indeed, figuring out the answers to these questions would help you understand your customer in a better way. Then, you can choose an app development plan that would suit your target goal and enhance your brand image as well.
Revenue Models/Monetization Strategy for Food Delivery Apps
While building an app, developers need to focus on the food delivery application development cost and potential profit-raising techniques. You can adopt the following revenue models in your application.
Revenue Sharing- One of the best ways to increase revenue from food delivery apps is to fix a commission rate for the restaurants. The general commission rate for such apps falls between 15% to 40%.
Delivery Fee- You can fix a specific amount for the delivery of the items, depending on the distance and location.
Everyday Deals- While partnering with restaurants, app owners can set discounts for particular dishes. Such offers are only applicable to users who purchase through the app directly.
Promotional Services- App owners who partner with other restaurants give a promotional platform to these businesses. Therefore, to get sponsored listing spots, use banners, or other advertisement plans, restaurants have to pay a specified fee.
Surge Pricing- During holidays or peak hours, you can scale the prices of the food items.
White-Labeling- For smaller restaurants, the food delivery app development cost can be overwhelming if they are just starting out. Your app can sell their dishes as special offerings and increase revenue.
Features To Look For In A Food Delivery App
SIMPLE LOGIN/SIGN UP
The first step the customers would attempt after downloading the app is creating an account. An easier login and password combination for account creation would build a good first impression of your service for the customers. Enabling the social media sign-in feature is an effective tactic as well.
ANALYTICS TOOLS
For the app owners, analyzing the deep insights and sales trends would help them during delivery app development and management. Delby, in particular, offers advanced analytics tools to the users.
PROFILE MANAGEMENT
Customers and restaurant owners need a personalized profile for locating information like order history and order status. Customers can access their profile to save preferred payment modes and favorite meals/restaurants as well.
RESTAURANT LISTING
Buyers search through the food delivery app to select a restaurant and view their menu. You should offer the filter feature here; they can use this to search easily by distance, time, and rating.
ORDER MANAGEMENT
In a food delivery app, customers want a quick and simple order-making process. You should enable the feature of adding or deleting food items from the selection lists. Adding selection categories for the delivery time, payment modes, and address is useful as well.
MULTIPLE PAYMENT MODES
You should offer varied payment options like credit/debit card, PayPal, Google Pay, Apple Pay, and e-wallets to the users in your food delivery app. Make sure to use payment encryption and protection software and provide a one-click syncing feature on the checkout page.
CONTENT MANAGEMENT
The restaurants using the food delivery app need a specific area where they can manage the content easily. Thus, develop an easy-to-navigate dashboard with different sections for ingredients, menu, pricing, images, and special offers.
ORDER MANAGEMENT
Again, for the restaurant owners, it is important to add notifications for delivery status, incoming orders, and canceled order statuses. Delby as a food delivery platform can help you handle orders quickly and efficiently.
PUSH NOTIFICATIONS
Using this feature, restaurants can send information about delivery statuses, discounts, and special offers directly to the customers. When customers are informed about their order status in real-time, they remain patient.
LOYALTY PROGRAMS
You can increase customer interest and loyalty using rewards and referral programs. Other offers like specialized discounts and membership deals would encourage clients to stay with your service. For example, you can provide rewards like free delivery for first-time users or on every fifth order.
REAL-TIME TRACKING
Customers want to stay aware of their order's status throughout making the order to the time of delivery. Add a real-time monitoring feature for tracking the order status and a delivery agent's movement to the destination.
CUSTOMER SUPPORT
Customers are likely to have doubts or complaints about their orders or other issues at some point. For this, they would want an easier connection to the support staff and quick responses. Accordingly, you should include 24x7 customer service in your app, like Delby.
Bottom line
Overall, it is crucial to focus on the customer demands for creating an app for food delivery. Using the above-explained business models, monetization techniques, and advanced features, you can build a revolutionary food app capable of generating high revenue.
Delby is one advanced platform that allows small-scale food delivery startups to chain restaurants to create customized mobile app solutions. We offer a scalable platform with features like live tracking, advanced push notifications, and seamless content management. Get in touch with our on-demand food delivery business experts and start building your online food business now.
