Customers love convenience. There's nothing better than having your wishlist delivered to your doorstep. When you can receive your long grocery order within a day or two, the latest movie on Netflix in a few clicks, the expectations from the food orders grow even further.
Digital orders and delivery have grown 300% faster than dine-in since 2014, which shows its rising popularity. Besides, this is just the beginning. The online food delivery market is expected to grow at a CAGR of 9.5% to reach a market volume of USD 13,233 million by 2024.
QSRs such as McDonald's, Burger King, KFC, Dominos, etc., dwell on the concept of fast food cuisines that require minimum preparation and serve time. They can be relished on the go but have a fairly short shelf life, say 20-30 minutes. Any delay puts both the quality of food and brand reputation at risk. As much as 60% of consumers want their food to be delivered fast. Hence, responsiveness is the prerequisite for fast food chains to tackle deliveries and takeaways during peak hours and otherwise.
Food aggregators indeed bring agility to restaurants. They offer the logistical speed a restaurant needs to facilitate timely delivery. But this advantage comes at an opportunity cost. Let's quickly go through some of the crucial delivery aspects that restaurants let go of when outsourcing deliveries.
Limited Control over Customer Experience: Outsourcing deliveries to food aggregators prevents businesses from gaining complete control over a customer's delivery experience. They have little say on ETAs, priority deliveries, delivery turnaround time, and how to handle an order.
Reduced Profitability: High commissions charged by aggregators and discounted rates are causing significant dents in restaurants' bottom lines. Even the National Restaurant Association of India has raised serious concerns regarding the situation. According to news reports, commissions and discounts charged by aggregators have grown to 40-42 %. Hence, building direct delivery capabilities is becoming crucial for QSRs.
Limitations to Ensuring Rapid Food Dispatch: Food delivery aggregators work with hundreds of restaurants in a city. This makes it difficult for QSRs to prioritize their orders. For instance, if a restaurant is tasked to deliver a food item that quickly degrades in quality over time, say an ice cream, it hardly has the means to execute a priority dispatch.
Poor Customer Insights: Knowing what a customer thinks about a restaurant's food quality can make a winning difference. But as much as 43% of restaurant professionals believe the third-party apps that withhold data interfere with a direct relationship between a restaurant/bar/pub and its customers. So while such platforms are instrumental in bringing orders to the restaurant, there is no direct access to a customer's feedback or review. This significantly limits the scope of providing a personalized experience. Even refunds are subject to the aggregator's discretion.
A leading multinational food chain leveraged a modern logistics platform to provide an omni-channel delivery experience and drastically shrink the brand-customer gap. With regards to owing to customer experience, Kiran Komatla, CIO at Burger King, highlights the importance of having a holistic view of a customer.
"Customers now interact with a company through multiple channels, from physical stores to websites, mobile apps, and social media. Digital customer experience is the combination of all digital interactions a customer has with a brand. Right from the time when a customer looks for a brand online, interacts with the brand on social media, makes a purchase, gets food delivered, and sends out feedback, all this information must be captured seamlessly to gain a single view of the customer," said Komatla. Therefore, to gain that single view of customers and ensure greater control of the delivery experience, it's crucial to leverage modern digital tools.
"Brands need to take advantage of and be part of this technological delight by integrating customer and brand context with technologies. Every interaction with the customer, no matter how small, should be monitored and should make sure there are always connecting dots to build deeper connections with the customer," he added.
The QSR segment is expected to clock the highest growth in the foodservice ecosystem, growing at a CAGR of 23% in FY20-FY25. Online ordering is a bustling market where cognitive capabilities can unleash massive profits for any QSR player.
The key to success in any industry lies in taking control and evolving with the growing customer needs. QSRs need to be the custodians of their digital experience. New-age technologies such as AI, big data, and cloud capabilities can bring operational efficiency at scale and significantly reduce delivery costs. The question is, are QSRs willing to expedite their digital transformation goals?