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Why Meal Delivery Is Growing In Popularity

by James William

The online ordering and food delivery industry has been experiencing a lot of changes. This is due to the fact that new business models are being introduced in this sector. Prepared meal delivery services are popular with millennials, individuals juggling multiple jobs and people with specific dietary needs. They are convenient and offer a wide variety of options.

New Business Models

The rapid growth of the food delivery industry has triggered an influx of competitors. This fierce competition puts pressure on many key stakeholders, including app developers, restaurant and grocer owners, drivers, and customers. To measure how well a food delivery service is performing, it is important to track key platform KPIs that span across these groups.

Some of the most popular new food delivery services operate on an aggregator model, where they contract with restaurants to provide their delivery services. This minimizes operational costs and allows restaurants to set their own prices for delivery. Other meal delivery companies have started offering a subscription model that gives consumers free deliveries and exclusive discounts in exchange for monthly payments. These companies also often utilize order stacking to increase efficiency and lower costs for both drivers and consumers.

Oversaturation

Preparation-based meal delivery services have been a big success for many reasons. They are popular with millennials, individuals juggling several jobs, and people with specific dietary needs who prefer to cook their own meals. However, these services are not without their challenges. According to Packaged Facts, they have lower margins and must compete with restaurants that are able to offer more affordable services. Moreover, these services face the challenge of oversaturation as demand has surged during the COVID-19 pandemic. This has led to some platforms competing with each other for customers and driving up customer service costs.

MK surveyed participants who used online food delivery services to understand the motivations behind their usage. Most participants cited positive previous experiences with these services, which influenced their custom and prompted them to continue using them. They also felt that the unique features of these services surpassed their drawbacks. Consequently, they viewed online food delivery services as normal parts of their purchasing habits in the digital food environment.

Online Ordering And Food Delivery

The online ordering and food delivery industry has become a vital service for many diners during the COVID-19 pandemic, with companies like HelloFresh and Gousto experiencing 122.6% Y-o-Y revenue growth in 2020. These platforms offer independent contractors that are able to deliver meals from different restaurants. This can be advantageous for restaurants who want to keep their deliveries in house and not rely on third-party services, but this may also require more investment in recruiting, training, and paying drivers.

These platforms usually charge a service fee on each order, which is added to the total cost of the meal. Several delivery services are now offering monthly subscription services, similar to Amazon Prime, to lower this price burden and increase customer retention. These offerings are particularly attractive to customers who frequently place orders on the platform. Ultimately, this could make these platforms less profitable and force some restaurants to decide whether they want to remain in the delivery business.

Convenience

Meal delivery services offer a solution to the weekly question of “what’s for dinner?” Their recipes can inspire culinary creativity and introduce people to new foods. They can also save time and money by eliminating grocery store trips. Meals may be delivered in small tupperware containers or fully prepared ready-to-eat meals. Many meal companies share nutritional information on each dish and provide options for diet-specific needs like vegetarian or vegan diets.

Food delivery services that are focused on convenience can thrive in this climate. They can offer customers a one-stop shop where they can order from restaurants in their neighborhood and use the same app to make payments and track orders. They can also offer customization features like letting consumers swap out sauces, add extra protein, or upgrade their side dishes. And they can deliver quality food quickly so that people can eat in the comfort of their own homes. Ultimately, this convenience is what drives customers to choose a specific meal delivery service.

Conclusion:

In conclusion, meal delivery’s rising popularity can be attributed to its convenience, time-saving nature, and diverse offerings that cater to various dietary preferences. As people lead busier lives, the appeal of having delicious, healthy, and ready-to-eat meals delivered directly to their doorstep continues to grow.

FAQs:

Are meal delivery services cost-effective compared to cooking at home?

Meal delivery services can be cost-effective when considering factors like time saved, reduced food waste, and the ability to avoid eating out. While the cost per meal might be higher than cooking from scratch, the overall convenience and benefits make it a worthwhile investment for many individuals.

Can meal delivery services accommodate specific dietary requirements or allergies?

Yes, many meal delivery services offer menus that cater to specific dietary needs and allergies. Whether you require vegetarian, vegan, gluten-free, or other specialized options, these services provide a range of choices to accommodate various dietary restrictions and preferences.

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