Pitchbook noted that 2018 set a 10-year high for venture capital investment in the space with food startups. DoorDash raised $600 million last month to value it at $12.6 billion. GrubHub has a market value of $6.3 billion. Waitr’s market cap is $482.7 million. Uber’s value sits at $71.5 billion.
So where do restaurants go from here? CleverTap, a full-stack customer lifecycle and marketing platform, recently shared its Industry Benchmarks for Food Delivery Apps report with QSR. It revealed trends, challenges, and best practices for food marketers and app creators to thrive in this crowded space. The data was based on the analysis of more than 3 billion messages delivered across on-demand food delivery apps worldwide.
“The food delivery app space has very low entry and exit barriers and hence churn and retention are constant challenges. The key to improve both, is to provide a differentiated experience at every stage of the user lifecycle," Almitra Karnik, Global Head of Marketing at CleverTap, said in a statement.
Where are we today?
Clearly, the segment is growing. But here’s another eye-opener: Per a report by wealth management and equity research firm UBS, it’s estimated that global online food ordering will expand to $365 billion by 2030. That represents 20 percent growth each year from the current $35 billion reality.
Even if it slowed significantly from that projection, it would still be a huge piece of runway.
CleverTap credited the growth to cheaper delivery fees (for the consumer) and the fact that adults today are cooking less than previous generations. There’s also, without much question, a fear-of-missing-out element. Kind of like credit cards once were for operators, it’s tough for restaurants of all sizes to stay out of the pool. Even if they’ve never swam and are afraid of water. But what it suggests is restaurants should find a way to make delivery work to their best interests and develop operations to ease headwinds. And those hurdles are different for every brand. Identifying the biggest pain point, whether it’s giving up data or worrying about how food travels, or debating if the fee should be passed to the customer and so on, are questions that can be attacked upfront.
CleverTap said intensified competition has brought the discussion to another level as well. Consumers aren’t just looking for delivery—they’re expecting differentiated experiences.