How To Develop Your Own Food Business Mobile Ordering Software
The most innovative small business restaurants, coffee shops and food businesses are turning to custom software development and mobile app development. Here is some food for thought (pun intended) on how you can do the same.
Trends are changing
The way in which we eat is changing dramatically. Restaurant quality meal delivery was only available to things like pizza and Chinese food not so long ago. Food delivery now exists on a global scale, expected to grow to almost $300 billion by 2026, having grown over 300% since 2017.
In 2021, almost one in four of the new projects we commissioned were in the food sector. This is no coincidence. Covid hit the hospitality industry with a bang and small businesses needed to do something different in order to keep the doors open.
Customers were not permitted to dine indoors and takeaway or collection was the only option. Lots of businesses weren't ready for this digitally and had no other option but to sign up to the ready-to-eat delivery platforms available on the market, Deliveroo, Uber Eats, Just Eat to name a few. This is regardless of the fact that some of these delivery giants can take up to ~30% of each order, in an industry with an average profit margin of 2-6%.
For some businesses, these apps just weren't viable. Some businesses can't or don't want to hike their prices in order to take the additional hit on their margins in fear of losing their loyal customers (Food delivery apps up to 44% more expensive). For some of those companies the only alternative is to invest in their own custom software development or mobile app development to manage online ordering themselves.
This has been a trend that restaurants and coffee shops are shifting to and it doesn't look to be ending anytime soon. It's just a matter of time until further regulatory constraints could be placed on the delivery platforms, including possible changes to how drivers are compensated. This may increase costs even more for the delivery platform giants, resulting in even higher fees for the restaurants, food businesses and coffee shops.
Investing and building your own food business software may just put you one step ahead of whatever is next.
Let's look at the stats
Before we get into the significant numbers, here are a few good to know stats:
- 42% increase in total spending on takeaway, over the course of two years, in the UK: from £452 in 2019 to £641 in 2021. (KMPG)
- 61% of consumers say they would visit a restaurant in the future after a positive experience ordering from them (KMPG)
- 37% of consumers order food delivery online from the platform with the lowest costs (RestaurantDive)
- By 2023, it's projected that online food ordering revenue will rise to $220 billion or 40% of overall restaurant sales (RestaurantDive)
- 48% of consumers think it's cheaper to order directly from a restaurant, and that number is growing (RestaurantDive)
- 76% of UK households said they ordered food delivery once a week (KMPG)
- From 2019-2021, ordering food by phone calling is down 43% (KMPG)
- 54% of 18-34-year-olds prefer using delivery platforms to order food, compared with just 20% of those aged 55+ (KMPG)
- 34% of people say personalised and discounted offers would get them to order from food businesses in the future (KMPG)
The Significant Numbers
If you're not aware of the fees and are considering signing up for any of the mentioned platforms, keep reading; you may be shocked. To illustrate the point that customisation may be more expensive initially but could offer you significant savings in the long run, let's focus on the three main platforms in Europe right now. Uber Eats, Deliveroo and JustEat.
- Uber Eats: ~30% per order (For their premium plan)
- Deliveroo: ~20% per order
- Just Eat: ~14% + 50p (charged to customer) per order
We could just leave this here, those fees are eye watering. The most staggering stat is that despite those fees, the delivery platforms still report losses time and time again.
- Deliveroo reported a 223m loss last year and has never made a profit since the company was founded in 2013.
- Uber reported a $2.3 billion loss for last quarter.
- Just Eat reported a €71m (£60.6m) loss in August 2021.
It is entirely possible that fees could continue to increase as the platforms try to claw their way into the black, making it more expensive for you to reach your customer base.
If you're already utilising the food delivery platforms, chances are you're aware of the fees involved. You might be inflating your prices on the delivery apps to offset the fees (something that some of the platforms are clamping down on) but your customers will feel the impact of this. Perhaps you may be justifying this as a cost to your customers for the convenience of using the apps.
Instead, however, you could be out-pricing your competition by providing the same restaurant prices and convenience with a platform you own and control. You could be listening to your customers and tailoring your app to fit their needs. You could also be listening to your staff, and tailoring your own app to fit your business needs.
Let's move away from fees and focus on demand for online food delivery.
Since Covid-related restrictions imposed at the beginning of March 2020, sales growth in Online Food Delivery has rapidly grown to new heights across the most mature markets.
Demand exists and some studies show that consumers actually prefer to use restaurant developed apps over third-party delivery platforms. If you can incentivise your customer base to use your app and offer them a good experience, the likelihood that they use your app for future orders will be high.
We live in a convenience culture world, where Silicon Valley attempt to rob us of our attention span every day with new innovative convenience hacks and apps that promise to add an extra few minutes to your day, to allow you to spend more time binge watching the latest Netflix series. It's the reality, and it's only getting worse.
Millennials currently dominate convenience culture in the food industry, with Gen Z rapidly catching pace as they begin to own bank accounts and gain financial freedom. Convenience has long been a factor in a restaurant's appeal, but customers want to get their food on the go more than ever. Customers have begun ordering takeout and delivery more frequently as COVID-19 draws to a close, with almost half (46%) of respondents from a Deloitte research study stating that their new habits will stay in a post-COVID world.
Okay, have we got your attention? For the purpose of being completely transparent and honest. Here are some pros and cons to building your own custom food delivery app for your food business.
Pros of custom
- Your software, your decisions – build it whichever way you'd like
- Custom user experience design branded to your business
- Significantly lower ongoing fees*
- Integrate directly into your existing POS and other systems
- Charge your customers fairly by offering the same prices
- One single order point, no need for tablets everywhere
- Potential increase to business value
- You're cool
*You will have payment gateway fees for processing each payment transaction on your app. Depending on the gateway, these can vary in costs anywhere from 0.25% to 3%. We prefer Stripe, but can work with any gateway if required.
Cons of custom
- Larger initial investment costs
- No exposure to delivery platform user-base
- Significant time to develop
- You're not as cool
No limit development
When it comes to defining custom requirements, it's over to you. Here are some obvious ideas and other not so obvious ideas that going custom would allow you to potentially build in your app:
- EPOS Integrations — Integrate your online orders directly into your EPOS system or kitchen management software.
- Loyalty & Rewards — Develop a custom loyalty program to fit your customer reward scheme and/or integration with your existing loyalty provider.
- Location-Based Deals — Use the native phone GPS to trigger notifications and offers to your customers based on where they are.
- Gamification — Engage with your customers via the app and build loyalty through gamification. Starbucks do this well, they have paired loyalty with gamification to incentivise their customers to be rewarded for collecting 'stars'. You could be very creative in this area, offering in-app games or engaging challenges.
- Referral Schemes — Develop a custom referral scheme for your customers and control the sales pipeline.
- Menus — Display and control your menus the way you want, not how the platform decides.
- Notifications — Notify your customers however you want and whenever you want. Send birthday notifications with discounts and incentives.
Can I have both?
Before we go on, let's be clear, I'm not saying you must choose to either use delivery platforms or build your own. You can easily do both, and intentionally market your own platform for returning customers.
But will customers use my app?
Let's be real. This is probably the most important question you have and it's a very valid one. It is no surprise the delivery platforms have thousands of users scoped to your location. They can potentially expose your brand to a large number of consumers — even in an over-saturated environment.
Your customers are going to continue to use the delivery platforms unless they have a very good reason to spend the time to download and allow your app to take up precious space on their phone.
However, it is certainly possible to get that download and the reward is worth the effort. According to recent research from Deloitte, a restaurant can get its branded app on customers phones by meeting the following needs:
- Ease of use
- Personalised, timely communications to your app users — doesn't need to offer a monetary incentive
- Personalised offers and promotions
Meet the above needs and you may be more likely to win a place on your customers phones and keep them engaged with personalised promotions and incentives. After all, it's a lot cheaper to retain a customer than it is to acquire a customer – potentially five times the cost to be exact.
Building your own
Okay, so what are my options?
It's not as difficult as you may think; you don't need to build the next Deliveroo (or you can, see Platform Development). A less complex web-based ordering application bolted on to your website is enough to get you started.
Here are some ideas for digitising your restaurant, cafe, or coffee shop in order to be prepared for the unknown.
Building a web-based online ordering app is the simplest and most cost effective way you can take food delivery and collection orders online. Web-based simply means that it's accessible via a web address and ordering is done there. The main downfall to this is that you can't tap into the native smartphone features for notifications, order updates etc... Only a mobile app can do this.
There are third party platforms that you can integrate into your site, but just like the big delivery platforms — you're at the mercy of them and their fees. Using third party platforms will also come with limitations in terms of customer experience and customisation to suit your brand, menus and ordering experience. Usually, they allow you to upload your logo and change a few colours – that's about it.
Building a custom ordering app in house means you have total control over how your software looks, sounds and performs. You can let your imagination run wild with the way it works, feels, and interacts with your customers.
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Mobile App Development
We all know consumers are lazy, since we are consumers ourselves. It's all too easy to reach for your phone, and order what you had from JustEat the day before. That is precisely why the platforms were created in the first place. Because of this, only a custom mobile app development project will come close to matching the experience consumers are used to and expect with the delivery platforms.
Developing your own food business mobile app, will allow you to do everything the delivery giants are doing – without the potential ~30% fee on every order. It also puts you in control, it's all up to you how it looks, feels and functions. The possibilities are endless when it comes to customising the features and user experience you want to offer. Customers will be able to interact with your brand directly without the distraction and competition for their attention of other restaurants. The'll be able to place their order with just a couple of taps, pay securely without re-entering payment details each time, and get real-time updates on their order status. You can even build integrations with your existing software for point-of-sale, or accountancy packages and kitchen management software.
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We worked with Newell in 2021 to design and develop a mobile app for their customers to allow them to order ahead of time and skip the queue for their lunch deli counters in their supermarkets. Integrated into the mobile app, we built a custom loyalty program that rewards their loyal customer base with stamps and tiered reward incentives.
Internally, Newell had specific requirements on how they would handle new orders and fulfilment of those orders. We worked closely to design and develop an internal application that would be placed on a tablet behind their deli to allow staff to easily manage the order flow and notify their customers via the app when their food is ready for collection.
You can read more here.
We received several enquiries for development of different kinds of food and coffee platforms in 2021 from both established businesses and aspiring entrepreneurs in the food industry with ideas to develop platforms that would serve consumers, restaurants and both.
If you're an established business in the food industry reading this, you may want to think a little deeper about your project. You might discover similar challenges that other restaurants and food businesses come up against. Building a platform to solve a problem for your own business is the first step to developing a platform that can serve others experiencing the same problems. Who knows, it could be the next Deliveroo.
If you're a start-up or an aspiring entrepreneur with an idea for a food platform, get in touch. We have in-depth expertise in software development and mobile app development for new ideas, and we excel at taking a concept from inception to completion. Our team have experience with local investment and funding options available and can help connect you.
Just this year we completed phase one of a large ordering and integration platform for a local business. Juice Jar is a juice bar and coffee shop in Belfast that just opened its second location several months ago and has agreed to three additional locations throughout the UK.
The company has big plans to scale quickly and recognised a need for a better method to handle orders placed from their own channels including all of the other delivery platforms and approached us to help them tackle the problem.
We assisted them in creating a platform that centralises and aggregates all of the delivery platform purchases into one single dashboard, eliminating the need for numerous tablets and scattered data.
In 2022, we have plans to continue to work with them to develop the ordering engine that will enable them to take charge of orders and have the delivery platforms operate secondary to their main order channels.
This is a great example of a restaurant with a problem, developing a solution that in the future may benefit other restaurants and food business owners.
We'll be writing a full case study on this project in 2022, keep your eyes peeled.
That's a wrap 🌯
Delivery and collection became a saviour for some small businesses as COVID-19 began to pose an existential risk for them. Many restaurants and coffee shops that used online ordering were able to increase their delivery revenue throughout 2021. Those that didn't, quickly felt the impact.
The market is wide open with room to build software and products and improve businesses that can bring convenience into people's lives. Only those who invest time and resources into digital transformation will be able to compete, stay afloat, and enjoy sustainable growth.
If you're interested in learning more about food platform development or have a software development or mobile app development project you want to talk about, get in touch. We're always happy to help businesses and startups talk about their ideas. Over and out, I'm off to order some food... 🥘