Today we are starting a new series at appssemble where we are going to talk about various types of applications, how do their business work, who are their target customers, and last but not least, what does it take to build a great app.
The first domain we’ve tackled is food delivery apps, as they are really popular especially now and every few months there seems to be a new app that tries to solve this problem.
Problem
Food ordering apps solve a big problem in today’s world, it helps the users get the food they want without wasting time going out to a restaurant, cooking it themselves or leaving the comfort of their home or office. The ability to have a digital menu from various restaurants near you and be able to choose a dish from this large variety makes food ordering apps very popular, especially with the people who work office jobs.
Demographics
According to this paper (Why do people use food delivery apps (FDA)? A uses and gratification theory perspective) published in November 2019, men tend to use those kinds of apps more often than women (63% men and 37% women), in addition to this, over 85% of the users are aged between 19–30 years old, come from Middle-class families, pursue or completed a graduated or master’s degree and use the app a few times a month (with the vast majority using the app multiple times/week).
Business model
Food delivery apps make money from multiple sources, the most common ones are the following, ordered by the percentage:
- percentage of the order — paid by the restaurant when an order is placed from the app, the vast majority of the income comes from this revenue stream
- delivery fees — some companies have their fleet of delivery or they are collaborating with some company which handles the delivery, most of the times, the users pay more than the actual delivery it would cost, so that results in another stream of revenue
- in-app ads — some apps display ads from the restaurants that have various promotions and want to advertise on the app
- selling the data regarding user behavior to other companies — knowing what type of user order more, from what restaurants, which dishes, and in what location, it valuable information for advertising companies
- service fees — a large number of apps practice a service fee that is used to make the product better (marketing, development, customer support)
Marketing
To make this kind of app popular, you would either have to be in a geographical zone where there aren’t such apps, and you find an increase in the target demographics (young, educated people that come from the middle class), usual cities with big universities. Or spend a lot of money on advertising.
Most of those apps spend a huge budget on advertising (millions of dollars) to acquire new users, sometimes the big companies such as DoorDash or FoodPanda also buy other small companies in the same business to take away their market share.
Food delivery apps are more common on mobile than on the web, thus their marketing campaigns are specifically tailored for this kind of medium, displaying ads for their app in other popular apps, or in the searches made from those devices. Just for the sake of numbers, we have looked at how much do some of the most popular food delivery apps advertise on the Facebook network, DoorDash has around 2900 running ads, FoodPanda around 1700 while UberEats around 700 and Deliveroo 500 at the time of writing.
Entering this segment of apps requires as we saw a large capital spend on advertising to convince users to use your app, or to have a superior product that people love to use.
Product
The functionalities of a food delivery app are pretty straight forward, to allow the user to order their favorite food and have it delivered to them. We won’t enter the details about how to restaurants handle the orders and how the apps they use look like, we are going to focus only on the mobile apps in search of finding out, what makes a food delivery app great.
Sign up
Like all the apps, the ones who let you try them out before asking for your details, delivery address, etc, are more user friendly and create a better experience, among the popular ones, Deliveroo is the only one which does that. Other apps have a pretty straightforward and easy to use sign up process (Uber Eats, Grab Eats) while others seem they are purposely trying to make it harder for the user to use their app. I’m talking about DoorDash where sign-in with Apple does not work properly, and they don’t allow signing up with other phone number country codes than the 3 ones where they operate, for me, as a foreign user this is a big disappointment and I’ll choose their competitors.
Main screen
The main screen of the most popular food delivery apps are composed of multiple items:
- search feature — allows users to search for their favorite foods
- filtering — allows filtering of the offers based on food type, price, time to deliver, or even by dietary options and restaurants hygiene ratings
- food type selector — allows filtering only the restaurants which serve a certain type of food (breakfast, Asian, America, Italian, fast-food, deserts) or various deals and offers.
- various type of categories — such as “popular near you”, “new on the platform”, “today’s deals”, etc.
- promotional offers
- recommendation based on your previous orders
- list of restaurants
As we can see there is a lot of information to be fitted on a screen, and sometimes the UI of those apps seems crowded, especially when they also have ads from various restaurants in your feed (eq. FoodPanda).
It’s common knowledge that more options make you sadder and makes your decision harder to take, some apps, have lists that span over the 6–7 screens only with filtering options — this results in a bad UX as it makes the whole process of ordering food more laborious and takes to much time.
We believe that apps in this category should allow the user to order food as easily as possible and helping them decide on what to order based on previous experiences and what happens around you (if you travel to a new city or country for instance, or if there is a new gem in town).
Because an MVP brings restrictions when it comes to releasing entire sets of functionalities, it challenges you to think of the real problem the product is solving for its customers and the core value proposition of it.
All the apps allow you to enter an address either via searching, automatically inferring it from your current location, or picking a point on the map. Some apps however don’t allow you to search for locations in other countries (for instance if you are in Berlin, you can’t look at restaurants from Paris, and order there) or even worse if you try to see the offers in another country, they ask you to log out and create a new account (I’m looking at you FoodPanda).
Ordering process
Finding what to eat is a task handled by the main screen of the app, where you can filter and search for the right food, afterwards, you are redirected to a restaurant for configuring your product. The restaurant is responsible for showing you a picture of the product as well as some details, unfortunately, all of the analyzed apps lacked all or multiple of the following details:
MVPs are renowned for helping business owners and startup founders test and validating their product idea. Bringing an ideology of only building core functionalities and being cautious with the money invested, and MVP will help founders achieve market fit while decreasing future investments in the product.
- pictures of the same dish
- nutritional values
- ingredients
- size of the dish
- allergen information
In most of the apps after you’ve selected your favorite dish, they let you configure it according to the restaurant’s offerings and they also recommend products that go by well with the one you’re about to purchase (desserts, drinks, etc). In addition to this, they also give you a time estimate for the delivery, a breakdown of the costs, and the ability to pay with either credit cards, cash, or technologies like Apple Pay and Google Pay.
Orders
After an order has been placed, all the apps try to inform you regarding the status of an order, however, those estimates and statuses are pretty far away from reality with most of them according to the reviews in the app. Implementing an accurate tracking system is not an easy task, especially if you combine it with a time estimate and the fact that the food might be delivered by third parties not necessarily the employees of the company which owns the app.
Order status while inconvenient is not the major problem with this functionality, the most frustrating one comes from the fact that in most of the apps you can NOT cancel an order from the app, you need to call either the restaurant or the customer support from the app to do that. Not only you can not cancel your order easily, but you can’t event append to it, so if you forgot to order something, you either place a new order (new delivery and service charges) or you call the restaurant or customer support and see if they can help you.
This kind of behavior seems outdated in 2020, we understand that there are some technical difficulties, but they should not be a problem for well-established companies such as FoodPanda or Deliveroo.
What does it take to build a great food delivery app?
Target
Our main focus should be on young persons (aged 19–30) which live in cities that either has big universities or their economy works well and have attended higher education (bachelor, masters, or Ph.D. degrees). Having a clear vision of who is using the app, can make us make better decisions while developing it.
Must-have Features
The app should allow at a bare minimum to order your favorite dish from a restaurant nearby and to do that in an easy, straight-forward way. Other must-have features include:
- easy sign-up, and it should be delayed to the moment when the app has to know all that info (name, address, payment methods, etc.)
- credit card / cash / Apple Pay / Google Pay payments
- the ability to search a restaurant or a dish
- filtering of restaurants (based on price, food type)
- option to add instructions for the restaurant staff
- order status and ETA’s
- order history
- have a fast, friendly, and helpful customer service
Needless to say that those features would need to be implemented in a way that the user will experience a consistent, lag-free, and eye-candy manner. A good example of such an app would be Takeaway.com.
Should-have features
Besides everything enumerated in the must-have category, if we want to build a good food delivery app and enhance the experience of the users, it should also include the following features:
- food recommendation and offers
- the ability to explore restaurants in other geographic areas
- filtering based on delivery time, price, offers, cuisine, and dietary option
- an enhanced order status including tracking of the food and the ability to contact the courier
- push notifications regarding the status of the orders
- the ability to cancel the order from within the app
- show allergen and nutritional values of the dishes
Nice-to-have features
- split the bill — allowing multiple users the order food in one single order delivered to one location would be something that the users would love, I know I would
- appending to an order after you placed it — obviously, you shouldn’t allow the users to modify the order after the restaurant has sent it, however allowing this to happen in a certain time frame, before the food is shipped would be a great enhancement to the status quo.
- dietary plan & calories calculator — entering your desired calorie intake together with a dietary plan so that the app could show you food recommendation that would help you achieve your daily goals
Unfortunately, I couldn’t find a good example of such an app, but this is also good news since it shows there is still room for improvement in this domain.
We’ve seen a trend where more and more restaurants or chains of restaurants move away from food delivery apps that aggregate multiple other restaurants and they build their platforms, this is mainly because of the fees of the platform and the association of their brand with others. User’s however, like diversity and don’t want to have multiple different food apps installed, finding the right balance between diversity, costs, brand awareness, and quality is always a hard task.
Conclusions
Being in the food delivery business is just like in any other business, you would either have to be well-founded or a market that allows it to easily grow. The good news is there is still room for improvement and new ideas, for instance, Apple introduced App Clips, which are opening a new set of possibilities for those kinds of apps.
Being in the food delivery business is just like in any other business, you would either have to be well-founded or a market that allows it to easily grow. The good news is there is still room for improvement and new ideas, for instance, Apple introduced App Clips, which are opening a new set of possibilities for those kinds of apps.