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On-demand delivery apps have exploded in popularity, though most people only know the brand names behind the most popular ones. What do these apps allow you to do? Why are they so popular with consumers and businesses alike? Will they have staying power? And does your business need one?
What is an on-demand delivery app? And why is it so popular?
An on-demand delivery app is an app that allows you to order things to be delivered to your home at a time of your choosing, and they tend to result in items delivered far faster than the average online order. These apps may only source the item from a specific chain of stores, or it may deliver items from a variety of businesses. These apps were already becoming popular due to their convenience. Place an order through a grocery store app, and they deliver fresh food to your home within a few hours. These apps are a boon to the home-bound, whether they are disabled, lack a working car or have young children in tow.
These apps exploded in popularity during the government-mandated shutdown in response to the coronavirus pandemic. You might not be allowed to go to the store, or you might be afraid to go shopping. Tens of millions of people started ordering restaurant meals for delivery to their homes instead of eating out. They ordered groceries and beauty products delivered to their home.
How on-demand delivery apps are serving businesses across many sectors
There are two different types of on-demand delivery apps. One category aggregates product deliveries from a variety of sources. Doordash and UberEats fall into this category. You order through their app, and you can choose from a wide range of vendors. The other category is what we’ll call branded apps. A good example of this would be a restaurant delivery app that only delivers orders from your restaurant chain. It is a great way to connect with customers without having to compete against other rivals. Yet each of these types of on-demand delivery apps has their advantages.
Third Party Marketplace Apps
Apps that plug you into a third party’s marketplace allow a small business to tap into a much larger customer base. You’ll be discovered by people who’ve never heard of you and may order from you. This can increase revenue, though you’ll quickly run into problems if you can’t meet the surge in demand. The downside of these services includes the imposition of their terms of service on your business and the price you pay to use them.
Branded Delivery Apps
When you create branded delivery apps, you control the content. It will initially be only your products or services, though you could make money and provide value by offering companion offerings. Your customers accessing the app will only be buying from you, assuming they’re using the app. It can be hard to convince them to install the app. You often have to incentivize use of it. That’s why restaurants tend to give people discounts for in-app ordering in addition to allowing them to order meal delivery through the app. But it can be worthwhile to invest in the branded app. If you give them enough incentives like targeted coupons or a good loyalty program, you’ll increase the lifetime value of each customer.
When you’re delivering items through branded apps, you don’t have to increase the floor space dedicated to customers. For example, restaurants have often been making use of ghost kitchens without any restaurant seating to make meals just for delivery. Other restaurants have simply ramped up the kitchen to make meals for eating in the restaurant as well as having them taken out by customers and delivery services alike. When many restaurants were forced to close their dining sections during the pandemic, the ability to process orders via on-demand delivery apps allowed them to continue operations. In many cases, this made the difference between breaking even and going under.
Top features of on-demand delivery apps
On-demand delivery apps are more than an app. It must tie into your business IT infrastructure. For example, it needs to connect to your ordering system. The orders need to feed to those who pack the orders or make the meal and then deliver it. You’ll get points with customers if you have real-time order tracking, whether their pizza is being made or their box of hair care products is in a driver’s vehicle on its way to their house.
Real-Time Delivery Partner Tracking
You’ll want to have real-time delivery partner tracking, if you’re outsourcing delivery to third parties. This feature is standard when you’re using third-party delivery services. If you are working with a third party delivery platform, your system will need to send data from orders from the on demand delivery software apps to your logistical network before informing drivers of what to pick up and where to take it. You’ll also need to manage the logistics of delivering things, whether it is delivered by your drivers or hired drivers. Monitor driver performance, because your reputation depends on deliveries arriving on time and good customer service.
Your customers will insist on a user-friendly interface. An app that lets them see their order history and seamlessly re-order it will improve sales.
Ability To Book Or Schedule Delivery
Give customers the ability to book or schedule delivery. They might want to order dinner at 3 PM so that they can sit down to eat at 6 PM. Or they may schedule delivery of items so that arrives as soon as possible. Whether it is health products for a sick child or groceries for someone who can’t leave the house, these apps have taken off because it can be faster to order it via the app and have it arrive at your home than go out and get it yourself.
The app needs to be error-free, regardless of what device they’re using to run it. After all, you can’t afford for customers to get mad that items didn’t arrive in time because the order didn’t go through properly.
Provide Multiple Payment Gateways
You must provide multiple payment gateways. Customers won’t use an app that won’t accept their preferred payment method. Nor will they continue to use an app if their data is compromised. Any app you use or build must have good IT security from end to end.
Good delivery apps give business owners insight into the cost of serving customers. How much business is generated through the app, and how does the order profile differ from that of those visiting a brick and mortar location? How much are you paying the delivery drivers? What percentage of orders are incorrect, late or returned?
What does the future hold for the on-demand delivery industry?
On-demand delivery has become part of modern culture. Your restaurant probably won’t survive if you don’t allow for at-home delivery barring a few locations actually selling the view out their windows instead of the food.
Delivery apps that offer discretion or improved safety are taking off. For example, there has been an uptick in wine delivery via apps. After all, it may save someone who is drunk from a potential drunk driving arrest.
Is a delivery app the right choice for your business?
Would you benefit from a delivery app? The answer is: it depends. Service-oriented businesses do better with apps that let customers schedule service, though you might supplement this with the delivery of related products. For example, your pool cleaning service could supplement its income by delivering pool cleaning chemicals for customers who will clean their own pool. Just be careful with the potential liability.
Are you offering a product or a service?
If you’re offering a product, you may or may not benefit from an on-demand delivery app. If the item is easily warehoused, it could be easier to rely on a fulfillment service to ship it for you. You’ll have to pay them for the service, but you don’t have to add the logistics of online order processing and delivery to the operations at a given store. You could also have the third party logistics firm hold a much more diverse inventory than what can be kept in any given store. That gives customers a reason to visit your website.
Delivery apps tend to work best when the goods aren’t something you can easily get from a site like Amazon or can get more quickly from your store.
This is why restaurants have embraced delivery apps. However, they’re not the only ones:
Pharmacies are making use of on-demand delivery apps. Medically fragile people may not be able to leave their homes, but they still need items like prescription medications. Those who are sick or providing care for them may not feel comfortable leaving their home. Place an order with your pharmacy, and have the item delivered in a few hours. The pharmacy could make extra money by letting customers order additional over-the-counter medicines and useful items like bandages or test strips. This is a value-added service for your customers.
Delivering furniture from the store via an app is becoming commonplace, and your business could earn extra money by assembling it for them. Just make sure you can ensure the quality of service, or you’ll lose customers. But if you provide a convenient complementary service your rivals don’t, your customers have another reason to order from you.
Delivery of flowers and gifts via an app has become more popular. This is partially due to the fact that people often order these items for delivery to people on the other side of the country. The only issue is making sure you can deliver it on the customer’s schedule.
On-demand delivery may not be a good idea if your customers are widely dispersed. It is easier for a delivery person to deliver several items in densely built area than several hundred miles to make their deliveries, much less do so “on time”. This is why many services only allow for delivery if it is within a given radius.
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If you’d like to discuss your app idea or how your business could benefit from an on demand delivery app, I offer a limited number of free strategy sessions each month. Book your call now or simply call us directly at (770) 274-4482.