Returning from office, Vikram, an IT consultant, due to his extended hours at workplace is not perturbed by the fact that all the nearby dining places and eateries would be closed for the day by the time he de-boards the metro. All he cares is for the remaining data of his daily internet consumption limit which would help him place an order for his dinner. This has been his algorithm to get food at doorstep even at odd hours of the day lately.
The mobile data acts as a savior to Vikram, with which he orders dinner from himself which has often reached his place while he is just strolling by the dogs in his street. Millennials nowadays, like Vikram, are blessed with these omni present mobile food delivery options. This new business trend in the food markets has completely eroded the dependency of the eateries and food stores which have been the prime source of serving self with food when it comes to eating something apart from homemade food.
With the advent of modern-day technology, e-commerce is on a boom in the country. Dining and restaurants are one among the long list of business verticals impacted by the surge in the digitization of the businesses. Food is just a touch away.
With a mobile phone on your palm, you can serve yourselves with a varied list of cuisines available in the restaurants and food courts in your locality at home. Making food delivery apps the fastest e-commerce market in the world, we are witnessing a heavy fountain of online food and delivery restaurant and companies, which may lead ahead of 2.7 billion by the end of 2019. Making it a noticeable activity, recent research came in light that during lunch hours, cafes and restaurants are relatively empty but sales are better than before. There is an indirect proportionality recorded in the footfall in the food courts against the orders placed. The app-based food delivery has completely changed the equation that prevailed in the food market. That is what we will discuss in the article for today, Impact of App-based Food Delivery apps on the traditional food business.
The success of food delivery tech start-ups like Uber Eats, Zomato and Swiggy have caused a significant change in the ideology of food chains when it comes to business. These delivery applications are basically acting as a middle layer between the food providers and consumers. The consumers can order food through the applications on the food providers registered with the respective application. The food is then delivered to the consumer at the provided address by the delivery personnel employed by the food delivery application. The application thus charges a certain amount of commission or fee for acting as the middle layer between the two entities i.e. the food provider and the consumer.
Food chains earlier operating upon the traditional business model are now re-visiting their business style focusing more on delivery operations rather than the dine-in chores. These food chains are either venturing into the delivery-based model of business or reaching out to organizations like Swiggy, Zomato, UberEats etc. which are working as a middle layer between the end customer and food suppliers. As per research, food delivery applications have seen a rise of up to 380 percent as compared to the last three years, which may grow by the end of this year.
FOLLOWING ARE THE POTENTIAL FACTORS ACTING AS PROMINENT REASONS FOR THE DELIVERY-BASED MODEL TO PROSPER:
Longer Travel Time: Working professionals have to spend a good amount of time travelling from home to work and back. Even working in normal day shifts people often reach home late, exhausted to work their way to the kitchen and prepare meals for themselves.
Dual-Income Couples: Increased cost of living and higher aspirations have enabled the ideology of working couples. This also acts as a factor in supporting the flourishing of this delivery-based model. Door-step delivery of food turns out to be a luxury for the working professionals on returning exhausted from work.
High Footfall in the Dine-in stores:
Long queues at food outlets and food courts have led to increased turn-around time. People thus have started to prefer to stay inside and get food delivered at door-step if there only purpose to go out is to have food. People enjoy the cuisines of their choice at home with utmost comfort.
Bringing you some new landscape of how these online businesses are flourishing in the traditional market. We've collected a few information, which might force you to ponder on it.
Quality comes fast:
Being brought or easy delivery was considered as one of the unhealthy and unhygienic placements. But with time and technology advancement, the growth of food delivered at your door-step tastes similar as you would enjoy at a fine-sitting restaurant. Such platforms force the small and quaint cafes to come on the boat and let the lazy hommies enjoy their meal in their bed with utmost purity.
Being brought to us the options of serving at our doorstep via these middle layers of food applications, Zomato, Swiggy, Uber Eats and few more, are just choices presented to us. Be it choosing from Chinese to Japanese to Afghani to burgers and pizzas, there are endless alternatives available via traditional food delivery apps. It's easy and affordable.
Gone are those days when working till late and returning home would serve you just a left-over piece of bread and half a cup of juice. The growth of the new food delivery platforms is totally a survival for the new generation. This whole new venture of delivery is welcoming countless restaurants and customers, the same. Be it a huge order for your lunch or just a sandwich for brunch, the food applications let you eat even if it is small untimed hunger.
Business for survival:
Say it force or a market, with time there's a huge demand for restaurants to come on the ground and compete. Not every cafe or din-in-restaurant needs to jump in this business, but indeed, sooner they'll all have to. Now they will all have to start re-thinking on building the new strategy to sustain in the market. As there are multiple food chains already sustaining in the market without offering food delivery to their customers, but bet me, they are soon joining to jump in the well of opportunities and profits it may offer to the food companies.
Being directly connected with food, we humans' hold an emotional relationship with it. Sharing food post is also a kind of activity our generation has generated. Sharing the experiences via the mode of photographs posted by them on their social media handles by ordering food from new restaurant and cafes is a new profession coming in light. With so much of love for food, there are approximately 17, 365, 53, 39 posts with the hashtag of food (#food). Being totally unaware of what a person sitting next to you is eating is absolutely normal, but if you are unaware of what your friends in another land are having for lunch, can be a matter of concern. With so many food photographs floating on social media, it directly ties our heart, mind and of course , our taste-buds.
Not everyone with growing demand, lip-smacking photos on social media would win the race, but you need to be smart, quick, up-to-date, hold on brilliant chefs, a hand full of helpers, comparative price, a good source of resources, and a great team of members will help you sail in the sea. With the rapidly fast-moving technology, people want food as soon as they order.
The impact this model of 'virtual-kitchen' has caused in the traditional business can be bifurcated to the existing businesses and the new ventures. For the existing restaurateurs, it has been a complete revamp. From striking a balance between the conventional dine-in and delivery operations to revamping the in-house teams to work simultaneously in these models, it has been quite a challenge.
The existing spaces in the outlets have to be refurbished to support concurrent operations of preparing the orders for the outlets and home-deliveries. The dine-in area in the brick and mortar outlet are trimmed so as to provide more space for the two teams working together. The chefs and staff are to be equally equipped in managing the operation tasks along with the gourmet expertise expected out of them.
Restaurateurs, although a bit reluctant to join this segment, have to participate and perform so as to be in the charts. Ironically, the outlets have to cater to both models to keep the ball rolling as the middle layer firms have been reported to charge heavy commissions for their services.
For those ushering into the food business, the road map is a bit clear as they have the experience of the existing players to learn from and implement. They have a clear option to start the dual game or stick to the delivery-based model only. Sticking to the latter saves them the huge capital that is otherwise required to come up with a fancy outlet and maintain it. These funds can be then utilized in improving the level of the other supporting operations like the in-house app to avoid the commission of the middle layer. Recruiting the staff as per the cuisines catered to can be planned accordingly.
This shift in the way of conducting food business has sown the seeds of unhealthy competition in the market. Falsifying the fundamentals of business, in order to attract consumers, restaurateurs have started to offer heavy discounts and cashbacks on their delivery orders .This juggernaut has caused a chaos in the market leading to which restaurateurs have to venture in this space just to ensure that they are in the charts.
The dual income couple trend and the nuclear family setup is on the rise even in the Indian context which has caused massive changes in the day-to-day lives of the people. The demographic breakdown and the inclination of people towards corporate jobs have initiated a domino-effect situation which is seen as an opportunity of starting new ways of businesses. Together with modernization, digital evolution is seen as a platform serving innovations in all the streams linked to daily consumer behavior like shopping, dining, and daily chores, etc.
The change in the lifestyles of the millennial has proved to be the inevitable reason for the paradigm shift in the food business. The influx of working professionals in the metros along with an increase in the number of women at work are the pillars of this rapid change in this everlasting industry. There is a huge potential of growth in this sector as ready-to-eat and cheaper food items are what this trending business model has in offer for the consumers.
Change has indeed been the constant that the human race has witnessed. We have traversed from hunting animals and living in the woods to raising live stocks and growing food. Food has still been the essentials for life and will continue do to so. Businesses have to dwell upon this perennial fact in future. Vikram, the ideal consumer of today, has got options like never before. He would be easily swayed away by other market player having new appeasing offers. Thus, like always, key market players have to be abreast with the trends, maintaining their place value, to prosper in the disruptive changes to follow.