According to the traditional food delivery process, customers call the nearest restaurant and wait for the restaurant courier to offer doorstep delivery. However, the development of digital technology is rapidly transforming the food delivery industry. Modern consumers order food with the utmost potential and minimal human interaction through websites and on demand food ordering app.
A restaurant that offers takeout services also opts for online food ordering application development to retain customers. The food ordering app development for restaurant enables fast takeout food delivery with or without human interaction.
According to current facts, about 39 US-based private food companies have 5 million or maybe more funding. These companies follow restaurant ordering software business model to deliver cooked food or distribute some fresh items that you can use for home cooking.
Currently, these newly launched food firms have received a lot of applause from clients and are also attracting the attention of investors to enjoy high profits. However, it is still unclear what the future holds for the entire food delivery industry.
In this blog, to evaluate the future scenario of the food delivery industry, the on-demand food ordering platforms are broadly divided into three categories:
On Demand Food ordering platform business models
Food delivery businesses come in many shapes and forms. They range from platforms that partner with restaurants and drivers to fully integrated models where everything is housed.
1. Platform to consumer model
In the Platform to Consumer model, third-party applications typically list restaurants near a customer through a website or mobile application. Consumers can then order from these partner restaurants, and the driver can deliver meals from the restaurant or platform. Leading examples include Door Dash, UberEATS, or Deliveroo.
Typically, the platform deducts 20 to 30 percent of the order value at the full potential delivery cost. The Platform to Consumer model currently represents the dominant mode of food delivery. It accounts for 63 of the $ 122 billion in sales generated each year.
2. Delivery service aggregator
Although they technically fall under the platform-to-consumer umbrella, it is worth mentioning separately. The platform acts as an intermediary between a customer and several local restaurants in the aggregator model.
In addition, they provide customer support on behalf of the restaurant if there is a problem with the delivery or order. Again, a fixed or variable fee is charged for each successful transaction through the platform. Examples include the likes of Just Eat, Delivery Hero, or Grub Hub.
Some have recently experimented with various subscription models in which customers pay a monthly fee in exchange for free delivery and other discounts.
3. Full-stack model
In the full-stock model, the food delivery business does everything in-house. This includes not only creating apps or hiring drivers but also cooking.
Food is often prepared in so-called ghost or cloud kitchens. These cloud kitchens often allow cooking in cheaper areas while only renting space for the kitchen. People cannot eat in these facilities as the primary purpose is to prepare the food to be served.
One major drawback of this model is that it requires significant investment to launch it. On the other hand, once sufficient scale is achieved, full-stack food delivery platforms earn more because they control the entire value chain. They can gain better control over the quality of their food because everything is cooked at home.
4. Restaurant to customer model
In the Restaurant to Consumer model, restaurants started serving food through their respective locations. The most famous examples are McDonald’s, Burger King, or Dominos.
These companies offered food delivery through their websites or apps joined the delivery platform for modernization. For example, McDonald’s operates its food delivery network in selected countries through its food ordering app development.
In addition, it partners with Door Dash’s choice of serving meals in areas where they do not serve themselves. Dominos became a poster child to lead the food delivery movement. Some of the company’s innovations in space include the following:
- Voice recognition system for ordering (named DOM)
- Application for tracking delivery on the route
- Experiment with drones for automated delivery
Business model comparison for better understanding
By offering full-service delivery through distribution management systems, you can gain precise control over the customer experience. You can ensure that delicious and fresh food is serve and food is deliver without any delay, as your in-house chef and delivery boy will handle the process.
Combine this level of control with ratings and reviews to promote your services further. However, the full-service delivery model has a slight backlog.
Problems associated with full-service platforms
Beginners need a significant amount of funding to start a full-service delivery business with seamless food ordering application development. You have to pay your staff members and maintain a lot of equipment. Add separate certificates and insurance for your business to comply with sanitary policies and laws.
Challenges of launching an aggregator platform
The aggregator model, which aims to grow a business with a low cost for equipment maintenance and pay, can be a budding entrepreneur. However, launching such a platform may be more difficult than you think, as fierce competition in the market.
The limited scope of market growth in launching food delivery services is another obstacle. Connecting an aggregator platform to support restaurants with their logistics workforce is an incredible way to increase your presence on your digital portal without spending large sums of cash.
Following the Market trends and scope
New delivery services provide full delivery services and a new set of caterers. By collaborating with restaurants that have not previously offered delivery services, the new delivery services increase the reach of the entire food delivery market.
- The restaurant could soon launch based on a new delivery platform as outsourcing logistics can be affordable.
- The fact is that every party involved in the new delivery services – partner restaurant, delivery service company provides maximum benefits to itself and the customer.
- This new delivery model is an opportunity for the restaurant to expand the customer base and make better use of existing kitchen facilities. Ultimately, this can lead to better revenue and more business growth.
In addition, the new platform provides a free logistics and marketing network for restaurants that were previously unable to deliver on their own. The new delivery platform brings choice, possibility, and readiness for customers. For those who no longer want to eat sushi and pizza, the choice of multiple dishes is amazing.
Determining the right platform!
Working with an established, large restaurant offers a better opportunity for delivery services to meet higher-order sizes than aggregators.
In addition to develop a food ordering app, it can provide an opportunity to enhance the overall customer experience. Due to the appeal of your platform, you can make your customers happy with the fastest and fastest delivery possible.