If you are running a food delivery business or contemplating starting one, then you must know that there’s money to be made in this business. And yet, the food delivery business has its own share of challenges, which beginners find difficult to handle. Here I am going to reveal 5 real food delivery business challenges and how these can be solved before the situation gets worse!
But before I talk about the problems and solutions, let me give you an optimistic picture of the food delivery market globally. According to statistics revealed by Statista (ref. link added at the end):-
- The digital food delivery segment is likely to touch USD 136,431m in 2020.
- The Revenue from this business model may grow by 7.5%, i.e. the Compound Annual Growth Rate from 2020 to 2024. Thus by the year 2024, the online food delivery market volume will grow to approx. USD 182,327m.
- The segment that will outperform is the Platform-to-Consumer Delivery as the number of users availing of this service will be a whopping 965.8m!
Now if you find these statistics motivating enough then I must remind you that everything is not so hunky-dory. There are real food delivery business challenges that should be addressed at an initial stage. Else your food delivery startup is likely to sink without a trace!
Poor Logistics Infrastructure – One of The Real Food Delivery Business Challenges That Can Lead to Severe Losses!
From the moment the order is placed till it reaches the buyer’s address, anything can go wrong. Your food delivery app may temporarily fail, especially during rush hours, thus resulting in losing valuable orders. The delivery may get delayed and this invariably leads to an angry and unhappy customer.
The solution: If you are losing business due to the malfunctioning of the food delivery app, then don’t think twice. Invest in a high-quality food delivery tracking app. And no it need not be too expensive. You can do online research to find out a reliable and result-oriented food delivery app development company. Else, you can hire a freelancer too who has prior experience in a similar field.
It Is Difficult to Build Up A Loyal Customer Base
The online food delivery market is fiercely competitive and yet biggies like Uber Eats, Doordash, and Grubhub enjoy the major market share, thus posing a serious threat to the beginners in this segment.
Thus there’s every chance that people may download your app, place some orders and then delete it after a month or so. Why? Because they find a better option or they simply lose interest in your service.
Solution: Be more innovative to retain customers because you know for sure how stiff the competition is in this food delivery segment. Treat your loyal customers with special deals and discounts. Maybe you can offer them freebies on special days like New Year, Christmas, Diwali, etc. Make an extra effort to communicate with customers. You can connect with them on social media, tell them what special measures your delivery business has adopted to offer better service during the pandemic. Apply a few of these small business marketing tips to connect better with customers.
Messy or Delayed Delivery is One of The Unavoidable Food Delivery Risks Startups Likely To Face!
Of all the problems with home delivery, a messy or delayed delivery is perhaps unavoidable, and yet it can leave a bad impression about your business.
When the food is delivered at home, messy delivery can sometimes happen. It can be due to food spillage simply because the food is not packed properly or the container is somewhat defective. And yes, sometimes it can happen due to the sheer carelessness of the delivery boy.
Whatever the reason is, customers really don’t like it when they pay money for the entire dish and receive half of the amount inside the box, and the rest smeared all over the packet!
The Solution: You can set up some food packaging standards, for your partner restaurants and delivery boys. If you are outsourcing the delivery service to a third-party, then give them clear instructions too. Also, a good idea is to reward those restaurants and delivery boys/services who have excelled in the packaging and delivery. You can decide the best, based on customer reviews and feedback.
Bad UX Can Prove to Be Quite Damaging For Food Delivery Apps
Is your app performing properly on all devices? Are the menus, offers, and important information clearly visible? Does your food delivery app provide the latest information about the restaurants and cafes that have been listed?
The Solution: Actually this problem can be easily addressed by building a new app for your customers. If you already have an app running, then consider modifying it, for a flawless user experience. Few features that should be incorporated are :
- Easy and quick search option on the homepage
- A simple listing of restaurants for quick order placement
- Display the particular customer preferences on the homepage
- Provide Multiple payment options that are safe and easy to operate.
- Prominently display the new additions or day’s deals
Inability to Handle Huge Order Volume is One of The Real Food Delivery Business Challenges That Should Be Taken Seriously
So, if you are grumbling about not receiving enough orders, then ask yourself is your food delivery startup prepared to handle a sudden surge? And the honest reply in all probability is going to be a “No!”
Why? Because most new delivery businesses operating with limited staff and resources often don’t keep extra delivery persons on standby. And then, when the order volume starts picking up, especially during the festive season, these businesses try to manage with the existing delivery staff. Quite naturally this leads to failed or delayed delivery, which ultimately prompts the customer to move to better options.
The Solution: Try to collect as much customer data as possible and then use data analytics to determine the trends. By using big data, you can find out exactly when the order volume is picking up, which locations are ordering more, what types of foods are in demand, and so on. Accordingly, you can deploy more delivery boys to efficiently handle the sudden spike in order volume.
A food delivery business can quickly turn out to be profitable provided you meet these real food delivery business challenges efficiently and timely.