How Food Delivery Apps Have Changed the Game

From humble beginnings in 2001, the explosion in popularity that food delivery apps have had over the last 5 years has seen the industry grow to £5.9bn in the UK alone. This has had a huge impact on the restaurant industry. In this post we will explore how the rise of apps like Just Eat, Deliveroo and Uber Eats has not only led to a shift in the operations and strategy of many restaurants, but also the quality and range of choice offered to customers.

The Rise of the App

At the beginning of the 21st century the majority of food delivery was done in house, by the restaurants offering the food. Food orders were mostly placed by phone or in person, with payment made in cash on delivery. The choices available to the customer where limited and takeaway menus were often compiled from cheaper and lower range products as well as from leftover food with a short shelf life. As a result, takeaway menus were mostly made up of unhealthy fast foods. This all changed with the rise of the food delivery app. Food delivery apps, like Just Eat, Deliveroo and Uber Eats, allow customers to browse a wide variety of local restaurants, order food for delivery and pay with a few simple clicks on their smart phone or tablet. The ease of use and ‘one stop shop’ nature that these apps provide, coupled with our increasingly busy ‘on the go’ lifestyles, has driven a huge rise in popularity and created a booming new industry [1].

The first major food delivery app to hit the market was Just Eat in 2001, but it has been in the last five years that we have seen the industry really boom. In 2015 the UK food delivery app market had 13.6m users and was worth £2.6bn. In 2020 the number of users had risen to 24.8m, with a revenue of £5.9bn, the biggest rise being between 2019 and 2020, where revenues increased by £1.1bn [2]. Though some of this increase may be down to the COVID19 outbreak, and the subsequent closing of eat in restaurants, the industry is still projected to rise to a value of £9.4bn by 2025 [2].

The Customer Experience

In the past takeaway restaurants have been associated with unhealthy, often greasy, fast food, but delivery apps have changed that. As popularity, and range of choice, has increased, so has the demand for more varied, healthier, restaurant quality food. This growing demand, coupled with the ease of use and in-house couriers has encouraged restaurants, who in the past would not have considered takeaway as an option, to ‘get on board.’ This, in turn, has led to an increase in the choices offered to the customer [3]. App users can now browse a wide variety of far more appealing, high quality food, encouraging them to be adventurous and experience new cuisines that they may never have tried before. Studies suggest that range of choice is one of the two biggest factors in people choosing to use food delivery apps [4].

The second biggest reason for the growing popularity of food delivery apps is their ease of use [4]. Their simple, easily navigable interfaces and the flexibility they provide in terms of making payments means that it is much easier to order food on an app than using more traditional ordering methods. Many apps use a variety of payment platforms, such as PayPal, Google Pay and Cash App, as well as credit or debit cards. This means customers can easily pay for their food on their preferred platform and do not need to worry about having the right cash available or going into a restaurant in person.

COVID-19 and Food Delivery Apps

The onset of the COVID-19 pandemic in early 2020 has had a devastating effect on the restaurant industry, with many restaurants being forced to close entirely for large periods of the year. Because of this many more traditional ‘eat in’ restaurants have turned to takeaway to keep functioning and make money during the pandemic [5]. Many of these restaurants, however, where not set up for food delivery and so do not have the ordering infrastructure or in-house couriers needed to deliver a takeaway service themselves. This means that food delivery apps are a perfect fit for restaurants taking their first steps into takeaway food. The growing number of restaurants turning to delivery apps, and customers who want readymade, food, but are unable visit restaurants during a pandemic, is probably the main reason why 2020 saw the biggest ever growth in delivery app revenue in the UK. It is, however, a trend that is likely to continue even after the pandemic is over [2], with many entrepreneurs even turning to delivery only ‘virtual restaurants’ [5].

References

[1] Chokski, M. (2020) Online Food Delivery Apps: Why Are They So Much in Demand? [online]. Customer Think. Available from: https://customerthink.com/online-food-delivery-apps-why-are-they-so-much-in-demand. [Access date: 17/02/2021].

[2] Curry, D. (2021) Food Delivery App Revenue and Usage Statistics [online]. Business of Apps. Available from: https://www.businessofapps.com/data/food-delivery-app-market. [Access date: 18/02/2021].

[3] Naylor, T. (2020) What Do The 2020s Hold for Restaurant Delivery? [online]. Big Hospitality. Available from: https://www.bighospitality.co.uk/Article/2020/01/28/The-future-of-restaurant-delivery. [Access Date: 17/02/2021].

[4] Ray, A., Dhir, A., Bala, P., Kaur, P. (2019) Why do people use food delivery apps (FDA)? A uses and gratification theory perspective. Journal of Retailing and Consumer Services. (51) 221-230.

[5] Palaniappan, J. (2020) How Technology and Food Delivery Apps Will Restore the Food Industry [online]. New Food Magazine. Available from: https://www.newfoodmagazine.com/article/128575/food-technology-2. [Access date: 25/02/2021].

[fig1] PYNMTS (2021) Deliveroo [online]. Available from: https://www.pymnts.com/news/ipo/2021/deliveroo-to-announce-ipo-plans-march-8. [Access date: 7/3/2021].

[fig2] tech.eu (2020) Delivery Courier [online]. Available from: https://tech.eu/brief/just-eat-takeaway-com-raises-e700-million-finally-gets-the-merger-deal-approved. [Access date: 7/3/2021].

[fig3] Matthew, D. (2015) The Fast Food OfThe Future [online]. Available from: https://www.theguardian.com/lifeandstyle/2015/sep/13/britains-takeaway-revolution. [Access date: 7/3/2021].