According to a CNBC report, the online food on-demand delivery market will grow at a rapid pace over the next five years, and the delivery service itself will become mandatory for all online and offline stores, as a result of which they will either have to launch their own food delivery applications or connect to the appropriate aggregator. Below we will show you how to enter this market by creating the mobile application you need.
Niche and target market
When building your grocery delivery app, you can follow suits of apps like Zomato, Postmates or AmazonFresh, focusing on the widest possible target audience and range. Or you can choose the Farmiga, Supr Daily or Whole Foods Market path, which target a specific niche.
The first option should be chosen if there are no or practically no competitors in the target region, since otherwise it will be necessary to compete with the market leaders, which is quite expensive and risky. The second option is less costly and has a better chance of success, since a niche project can stand out with a design that is focused on a specific target audience. In addition, it will be possible to launch a targeted marketing strategy that is cheaper and at the same time much more effective than traditional advertising campaigns.
The simplest example of a niche food delivery application is differentiation by merchandise, such as organic, farm, local, or meat products. Also, online grocery stores and services are now popular, which, by subscription, once a week or a month deliver a set of products to your home.
More sophisticated online delivery services try to differentiate themselves through user experience, such as fastest delivery (Weezy guarantees delivery within 15 minutes), drone use (Kroger), wholesale prices (Boxed), AI for customer recommendations (being tested).
When launching your application, you can choose one of the above niches, if it is reasonable for your target market, or you can create something of your own, which has not been previously implemented anywhere. For example, the market does not yet have a service focused on the elderly, both in terms of assortment and user experience. Or a service that would serve the needs of biohackers - people who want to extend their lives by taking a certain niche, dietary supplements and drugs.
The chosen niche can be any, the main thing is that it meets three criteria:
- Minimum competition. The more competitors you have, the more requirements for the created application and the higher marketing costs.
- Sufficient market size. For the project to be profitable, the application must have a fairly large number of regular users. Niche projects may have problems with this, for example, it would be foolish to launch a service for vegetarians in a region where there are not very many of them.
- Availability of suppliers. If you plan to create a service for the delivery of fresh produce from farms, then these farms should be located near the region where your application will run. If you bet on the fastest delivery, then you can only work within a 10-15 minute drive from food suppliers.
Food delivery model
Aggregator model (order only)
This option assumes that the food delivery application you create will be a multi-vendor platform where any store, warehouse, farmer or other food supplier can place their goods and sell them to end customers. In this case, the supplier takes over the delivery, while you will be engaged in the maintenance of the online service and its development.
This is a simple model as it does not require creating your own food delivery system like UberEats. It is used by Zomato, Craigslist, Letgo and many other applications, both in the field of online food delivery and in other shopping niches. For their services, such sites take from 5 to 30% of the order amount or charge a listing fee.
Order and delivery / logistics model
In this model, you are responsible for taking orders, sending them to suppliers, and delivering them. Such a service is more difficult to implement, but in the long term it is more profitable, since all providers can connect to your application, and not only those that have their own delivery service (usually there are very few of such).
There are two ways to implement a delivery service: using your own couriers, like at FedEx, or freelance couriers, like at Uber. Usually now they use the second option, since it is more flexible and cost-effective, however, this way you cannot guarantee the delivery speed.
Monetizing a food delivery app
For aggregator apps
. Such services profit from:
For applications with their own logistics
- Both suppliers and buyers get access to the app for free. But at the same time, you push them to connect additional services: disabling ads, more positions in the listing, access to advanced support, analytical tools.
- The platform charges 5-30% for each trade. This is the most common monetization model used by many large marketplaces, from Grubhub to Amazon or Airbnb.
- In the case of food delivery apps, it is common for a store, restaurant, farmer or other grocery provider to pay for the subscription.
- Place on the first screen, at the top in search results, brighter ads, place in recommendations, etc.
. These services usually make money from subscriptions (the restaurant pays for connection), advertising, additional features and delivery. Shipping cost depends on the app. Here are some examples:
- For orders of $ 35 or more, the charge is $ 3.99 for scheduled or 2-hour shipping and $ 5.99 for 1-hour shipping. Alternatively, they offer a $ 99 a year membership fee to waive shipping fees. Additional charges will apply for orders over 50 pounds.
- Free on orders between $ 35 and $ 50 (depending on region) if you're an Amazon Prime member. If the order value is below the local minimum threshold, then the shipping price will be $ 9.99.
- In the past, couriers delivered food for a flat fee of $ 4.99. From August 2018, shipping prices began to vary from $ 2 to $ 8, depending on the distance to the grocery supplier.
- Server charges $ 1.99 to $ 3.99 shipping for partner merchants and $ 5.99 to $ 9.99 for other sellers.
- Shipping cost depends on the value of the order and the distance to the seller. This is usually between $ 5 and $ 8.
Food delivery app functions
List of functions of the client side of the application
List of functions on the courier side of the application
- Login and registration. Depending on the platform, this is registration via Google Play or the App Store. You can also register via email, Facebook, Instagram, Twitter or WhatsApp.
- Profile management. Buyers should be able to provide basic information about themselves: first and last name, location, purchasing preferences, preferred payment methods (and details), etc.
- Listings, product cards. Design and navigation can be borrowed from market leaders, adapting them to the chosen niche and region.
- Search, filters, navigation. The options that allow customers to search for the desired products should be as simple and understandable as possible.
- Add to "Cart" and place an order. A grocery delivery app should have both of these features, as well as the ability to cancel and modify an order.
- Several payment options. Specific options for payment systems should depend on their popularity in the selected region.
- Electronic wallet. The ability to keep money on deposit inside the platform will greatly simplify and speed up the shopping and ordering process.
- Discount cards and coupons. Users should be able to view and apply the discount code while paying.
- Tracking delivery. Allows users to track the order status and location of purchased items in real time.
- Selection of the delivery time interval. Allows users to choose a convenient day and time for accepting an order.
- Purchase history. Viewing the history of your orders and purchases within the application with the ability to repeat a previously made order.
- Rating and reviews. Social features to weed out unreliable suppliers, couriers and buyers.
- Help and support. Typically, this is text-based help information, video tutorials, chatbots, or a call center.
- Push notifications. Inform users about delivery time, order status changes, new promotions and discounts, platform updates.
List of functions on the admin side of the application
- Push notifications. Will inform couriers about new delivery requests, order status changes, payments, tips, platform updates, etc.
- Selection of ready status. Couriers should be able to indicate their willingness (availability) to accept delivery requests.
- Delivery requests. Your couriers should be able to accept or decline a specific ride for any reason.
- Integration with maps. Needed to debug the location of couriers and orders, as well as help with choosing the best path to the buyer.
- Delivery time intervals. Time intervals for a specific order that customers choose should be visible to couriers to help them plan delivery schedules.
- Information about weight and order quantity. This information will help couriers understand which vehicle to use.
- Request history. Detailed information about completed travels: timestamps, order details, delivery speed, tips, customer reviews.
- Financial data. Salary report for the last day, week, month, year. Information about receivedtips.
- Ratings and reviews. Couriers should be able to rate customers, track reviews and comment on them.
- Help and service. As with customers, couriers should have background information on how to use the app, how to solve common problems and how to contact technical support.
- User management. Ability to track status, add and remove customer and courier profiles.
- Product management. Ability to add and remove products, edit data in the trading card.
- Order management. Tracking the status of orders that are made inside the application, their cancellation, "freezing" or editing.
- Marketing management. Administrators should be provided with features to plan marketing campaigns using SMS, email, social media and other marketing tools.
- Advertising management. Adding and removing ads, tools for managing promotions and discounts, referral programs, etc.
- Password reset. This function is needed to help buyers, couriers and suppliers of goods restore access to their profiles.
- Courier management. Tracking information about all couriers with the ability to edit and / or delete it.
- Content management. Adding, editing and deleting various elements of applications and website.
- Payment management. Information about every payment made inside your application.
The cost of developing a food delivery application