The constant change in the tech world has given rise to incredible ideas and projects that have had the power to bring drastic changes. One of such innovative ideas is food delivery apps. Food Delivery Apps brought ease and cost-effectiveness to their customers. With the change in life patterns due to an increase in workload, people are now preferring delivery over dining out. The Covid-19 pandemic was an addition to this. Food delivery apps were never out of business even during the time of the pandemic. The total revenue of Food delivery marketplaces is expected to grow at 8.8% by 2024.
As a result of the huge growth in the food industry, several entrepreneurs and start-ups are looking to enter the online food delivery market. The market is getting competitive and difficult for companies to get hold of While the food delivery industry holds enormous potential for acquiring new customers each day and incredible potential for growth, but it also has its challenges that are still to be dealt with. We are going to discuss a few challenges faced by food delivery apps.
6 Factors responsible for the fallback of your food delivery business
Unorthodox Pricing Methodology
Staying cleared with the tactics that can pay your bills is the premium step in a business. With several new and established brands in the food delivery industry, the market has become highly competitive and because of this, the market pricing model is constantly fluctuating. Businesses have trouble identifying the right pricing models for their brand because the competitors doing far better in the field.
The new start-ups that are joining the marketplace are using every tip and trick to make their place here. They prefer to work on low margins to seek the attention of customers and increase their customer base. Their competitive pricing model puts a huge load on the profit margin of the whole industry and affects the profitability of their brand as well.
A comprehensive analysis of the pricing policies adopted by established players in the market is the most effective way to solve this problem. To develop a profitable pricing strategy, online food delivery companies should be aware of the latest trends and trends in customers’ price sensitivity.
Quality Vs. Price
Increasing demand for online orders has made it particularly challenging for delivery partners to maintain high quality while delivering food from restaurants that are at a far distance from customers’ locations. And that is the reason why there is a significant difference between the quality of food that is served at the restaurant and the food delivered to the customer’s door. Apart from distance, the food package goes through a lot of bumps, movements, and vibrations on the road, these all circumstances might affect the freshness of the food.
The possible solution for this problem is that the food delivery companies ensure that proper packaging and safety guidelines are followed at the restaurant. And the restaurant should keep a check on the quality of insulating food bags or boxes that is used to keep the freshness of food intact.
Extortion or Money
When you have to manage the fundamental carriage of your business, you have to role-play in the best possible ways in which you don’t extort your worker completely so that they feel handicapped. You have to be a leader who manages the logistics in a way that the staff is a fan of you.
Though Managing Logistics of taking orders, providing walk-in orders, and getting back to all the orders placed in limited time is probably the most difficult challenge faced by food delivery services. A huge number of orders at certain times makes it hard for the delivery partner to provide on-time deliveries. These problems are generally faced by start-ups at the beginning of their work because at that instance they can’t manage difficult logistic orders without affecting other services of the restaurant.
The problems can be resolved by building a platform that is fully integrated with features that helps in managing the logistics of delivery such as order scheduler, delivery router, location tracking, etc. Other than this you can also contact the delivery partner to train delivery personnel to manage on-time deliveries and understand the needs of those delivery partners.
Retracting with your customers setting the base for your business
The competition in the food industry is constantly rising as new businesses are joining in, and it is more difficult to retain clients. An increase in the number of food delivery services has led to an overwhelming response from customers, as well as creating confusion among them. In this case, it is very difficult to make customers stick to your platform. Customer engagement is easier with better deals, incentives, and loyalty points at certain moments in time. However, even for them, it is not possible to engage customers for a long period.
The possible way to deal with this challenge is by keeping a check on ongoing market trends, providing new customers with discounts and offers, and running a referral program for existing customers. Also, the business should focus on developing an application that has advanced features such as food tracking. This application should provide easy refunds and replacements. In addition, it should offer quality service to the customer so that we can stick around.
You need the Market expert
To have a stable place in the market, the food delivery platform must collaborate with restaurants that are popular amongst the customers. It takes a lot of effort and research to partner with the right restaurant. Moreover, entrepreneurs should remember that they are partnering with a restaurant that provides quality services. This will help them create a positive image in the eyes of their customers. This will help them increase their potential customer. However, there are a vast number of restaurants and cafes in every city today. Therefore, it gets more and more difficult to filter out the most valuable of those to add to your service.
Besides this, it might be difficult to convince restaurant owners to join your food delivery service platform. It takes a lot of time and persuasion to do this. To meet this challenge, it is essential to hire an on boarding expert who will guide you through all the processes and provide a well-actionable strategy that will convince your restaurant partners to work with you.
Know your competition
Any business that has already been in the market for a longer period has a possibility of gaining more customers depending on the services they provide. This is based on the reviews they have. The same holds for food delivery too. The competition in the food delivery industry is so that there is very narrow space left for new businesses to thrive. The established names in the food industry take up most of the market order and this is related to market capitalization. It is incredibly complicated to deal with this challenge as it mostly depends on customer loyalty and preferences. According to statistics from Mindinventory, the traditional food delivery systems still own up to 90% of the total market.
It’s crucial to stay current in business and to break the chain of market capitalization. The best way to establish your brand and name in the market is through exceptional customer service that includes responsiveness, an improved platform, on-time delivery, and other features that help customers navigate your app easily.
Select the strategy that builds up a bond with users
The marketing strategy that any food delivery business implements play a very vital role in their reputation in the market. Even if you have a well-established food delivery software that has the best features it can get difficult to find new users and keep up with the old ones. Certain times, rapidly shifting customer preferences main make it hard to define a proper marketing strategy that will work the best for you.
To tackle this problem, you can create a full-fledged advertising plan that contains all your marketing strategies in advance and gives a clear idea of your business. The advertising plan must also contain the target audience that you wish to attract. In addition to this, you can collaborate with food bloggers aur influences because they have a solid presence on the internet and they come to drive audiences to food delivery services as well.
Meeting Customers’ Expectations
It is important to keep up with your customers’ expectations and their vision of you. The customers have high expectations from their resources as they are waste online visible. The same thing goes for other online services as well but the food delivery services, I have been in the place for a long time now. When you focus on delivering quality services to customers, their expectations are automatically met.
The customer’s satisfaction is not only from the end of your delivery partner it is also from the restaurants and employees there so it is important to see what restaurant you are collaborating with. Collaborate with well-reviewed restaurants, provide on-time delivery, food tracking facility on the app, easy refunds, better AI for understanding the needs of the customer, and suggesting restaurants accordingly. All these features added to any food delivery app might help you connect more with your customers and even exceed their expectations. Keeping up with the market trends and upgrading yourself is the major key to standing up to the mark and increasing the number of audiences and reaching their expectations as well.
On Demand Food Delivery App Development Company
The food delivery industry is under constant changes and evolution. It holds a lot of potential for future entrepreneurs, if only they deal with the challenges efficiently. With all the challenges mentioned above, you might have an idea of what to expect when you start a food delivery business. Strivemindz has worked with several brands and companies for developing their apps and websites. If you require to build a food delivery app, you can connect with our experts at Strivemindz. We are one of the leading agencies for on demand app development and programming. Our expert team of on demand food delivery app developers will help you find the perfect solution.