In recent years, home food delivery is surging thanks to ease of online ordering via apps, a clear example of how digital technology is reshaping an established market. Some of the most popular foods ordered include various forms of fried chicken, hamburgers, pizza and Asian cuisine. One of the biggest of the app providers is GrubHub Inc., and food delivery apps like GrubHub and Doordash are both valued over $7 billion and the industry overall is expected to generate more than $75 billion per year by 2022. Bubbling behind are Uber Eats and Postmates.
Leading app providers booming
This means a good deal for app providers and their shareholders. But are customers getting the best service and are restaurants getting the best deal? In order to better understand how food delivery is experienced on the front lines U.S. Foods recently conducted a survey of both customers and deliverers. The report covers top complaints, tolerance for delivery times and cost, and trends in tipping.
Top customer complaints
The top complaint was found to be food intended to be hot coming cold. The report also found that as apps become more common and consumers get used to ordering via apps, their tolerance of delivery time delays (or their expectation as to how long a delivery should take) is dropping.
With tipping, the survey finds that 66 percent of food delivery app customers calculate their tip on how much the delivery and service cost them, as well as with the efficiency of the delivery. Unfortunately for delivery drivers this often means a relatively low tip or no tip, as customers often add in the delivery costs in with the food price.
Speaking with USA Today about the tipping finding, industry commentator Diane Gottsman said: “It’s already expensive, but that’s not the fault of your delivery driver, who is getting in their car, working for wages of their own and delivering you the food.”
Crowded market for new apps
In terms of app providers, although there are a host of startups many are findings it hard to break through. CleverTap’s Industry Benchmarks for Food Delivery Apps report finds that 25 percent of users complete the signup process after the first app launch. However, just 22 percent of these new users remain active after the first week. The report also finds that 54 percent of new users will completely uninstall the app within the first month. This means that the big players, like GrubHub are remaining dominant. Consequently, new app developers will need to be find new ways for driving engagement and winning customer loyalty.
