Have you been effectively utilising food delivery apps in your business?
An increasing number of Kiwis are using food delivery apps to access the food they want. As a foodservice operator, how can you make the most of these services?
To ensure using food delivery apps is profitable for your business, you need to consider the associated fees and balance them with your existing costs.
For some apps, the commission charged on an order varies based on how the order is delivered. For example, UberEATS charges a 30% commission fee for providing delivery, but only charges 16% if you send out your own delivery staff.
It can be useful to simplify your menu and focus on high-margin items that mitigate the impact of commission fees. Making your kitchen more productive by investing in new equipment and staff training can also help you improve your margins with food delivery platforms.
As this report from NZIER (New Zealand Institute of Economic Research) points out, food delivery platforms like UberEats give consumers more choice while increasing the potential pool of customers for restaurants.
The report states that the “improved matching of needs between participating restaurants and customers results in efficiency gains for both parties.” The report also revealed that in 2019, UbearEats increased the annual revenue of each participating restaurant by an average of $59,599 and estimates that 26% of customers would not have otherwise chosen to have a restaurant meal.
When implemented correctly, food delivery platforms can be a massive benefit to your business.
Food delivery services thrive during lockdown
Before the outbreak of COVID-19 and the subsequent lockdowns that followed, food delivery services were already enjoying rapid growth. Once lockdown hit and Kiwis were forced to adjust to the new normal, it created the perfect environment for these services to thrive and provided a lifeline to local restaurants that would otherwise struggle to operate their own food delivery service. If you’re a foodservice operator who’s been impacted by COVID restrictions, it’s highly likely you’ve already had to rely heavily on food delivery apps to serve your customers!
Young people continue to use food delivery apps the most
Perhaps unsurprisingly, it’s younger Kiwis who are using food delivery services the most. This MDPI research article reported that 25% of young people in New Zealand and Australia (15-34) were frequent users of food delivery platforms, more than any other age bracket.
With this data in mind, you may want to consider pivoting your offers to appeal to a younger demographic if you’re leveraging food delivery apps with your foodservice business. Using appealing images and creative, catchy names for your menu items while offering a high amount of customisability could help you attract more orders from younger Kiwis.
UberEATS continues to dominate
The MDPI research also cements UberEATS as the dominant food delivery service across New Zealand and Australia, with its usage share amounting to an estimated 30% of all users. Following behind UberEats is Menulog, Zomato, delivereasy, and EASI.
Dark Kitchens are here to stay
Last year we wrote about dark kitchens, and since then, they have continued to grow in prominence. Undoubtedly propelled by the impact of COVID-19, CBRE reported that the market size of dark kitchens in the Asia-Pacific region had more than doubled between 2019 and 2020, with steady growth continuing into 2021.
The impact of the COVID-19 pandemic has undoubtedly reinforced the appeal of dark kitchens for foodservice operators, allowing them to reduce their overhead costs and focus entirely on the healthy demand for delivery orders.
What does the future hold for food delivery services in New Zealand?
It’s easy to predict that food delivery services will continue to enjoy healthy growth throughout 2021 and beyond. For better or worse, the increasingly widespread and frequent use of food delivery apps by young Kiwis suggests a generational shift away from home-cooking and traditional out-of-home dining.
In many ways, the COVID-19 pandemic has given us a peek into the future of how the foodservice industry will transform, with the growing number of dark kitchens showing that the industry is already beginning to adjust.