How to create a delivery app and leverage the competition in 2020
Imagine the best lockdown Friday: you and your household, after a hard working day each at their own computer, watch your favorite series, waiting for the best pizza in town to be delivered. Or you suddenly realize that in your recent dangerous trip to the store, you forgot to buy an antiseptic.
Now you have everything at home - an office, a cinema, and a restaurant. Therefore, while others complain about boredom in quarantine, delivery services rejoice at the unexpected rise. It doesn’t matter who you are - a startupper or a businessman, in this article you will find a lot of useful information.
Why Create a Delivery Application?
At the very beginning of work on a startup or any new project, your first step will be to understand the needs of your target audience. In the current situation when your target audience potentially can be any Internet user we suggest that you take the first equally important step - to study the map of competitors. Delivery applications very often gain popularity in a particular region, for example Seamless in New York, or Deliveroo in Europe. According to Forbes, the distribution map of the largest delivery applications today looks like this:
Let's get to some statistics. Since the beginning of 2020, the industry has acquired about 19% of new users, the total number of which is now about 1.094 million. And the graph below shows that this significance continues to grow due to self-isolation of users in times of COVID-19.
Majority of the segment is platform-to-consumer delivery apps, where the market revenue is approximately 62.798 million US dollars. According to optimistic forecasts, in 2024 the income of the entire industry of food delivery applications will be about 86.006.2 million for platform-to-consumer and 77.996.3 million for restaurant-to-consumer.
Types of Delivery Applications
You may already have noticed that the total revenue of this area varies from case to case. In many ways, as mentioned before, it depends on what type of delivery application you have chosen.
1. Platform-to-consumer delivery app
This is a great idea for a startup, even if you are not familiar with restaurant business. A delivery platform is an application that lists various cafes and restaurants along with their menu and prices. These applications, like UberEATS or Postmates, are the meeting place for the consumer and their request, and you are the one who makes these meetings possible.
These applications are more profitable. You can demand from restaurants a commission for a place on your platform, or it can be included in the order price.
Restaurants and cafes get more from this platform than they give: it is an opportunity to receive more orders without spending on their own delivery service. In addition, they can get the attention of users who weren't interested in them offline, because finding a good place on the list is easier than on the next street.
2. Restaurant-to-consumer delivery app
This IT solution is perfect for an existing business. In global statistics these applications receive less profit, but significantly increase the income of a particular restaurant.
For example, if you are a restaurateur and now choosing between joining the platform or creating your own delivery application, you should understand that your own IT product will satisfy exactly your needs as well as possible. Yes, the development of your own application will take some time and a considerable amount of money, but the output would justify the efforts. In addition, this solution is beneficial not only for the period of crisis, but will allow to increase number of customers afterwards.
Many restaurants are already taking orders for the post-quarantine period to get more loyal customers.
Important: Loyalty programs play a big role in the life of delivery applications. You can offer the user to collect bonuses from each delivery, promise free delivery or a small gift when ordering on a certain amount.
Loyalty programs may also exist for couriers, in form of choosing the employee of the month or discounts on the entire assortment.
In many cases, there are several versions of the same delivery application - for customers, for restaurants and for couriers. The courier app is usually much simpler, it is created for a courier to receive a notification when they are in the best location to deliver the order on time. The app for the restaurant (if needed) should contain all the necessary functions for management to notify drivers and move orders by priority.
How to Make a Delivery Application Better Than UberEATS
Of course, you will not be able to create a quality delivery app without a rating system, feedback, a map and an ordering form. In addition, to make the application more convenient for the user, you can include delivery tracking and a system for contactless payment.
However, what can get users attention is a truly unique solution. Who knows, maybe your delivery app is the next unicorn startup, right after the famous UberEATS?
1. Wholesale orders
People will order more if there is a discount on bulk orders. Office employees will be especially fond of this function, as it is much more convenient to order food for the entire office with one delivery than for each separately. If you are interested in regular customers - this feature is a must-have.
2. Smart select
To save the user of the delivery app from scrolling feed for too long you can add smart selection to the application. Then the user will be able to fill in the questionnaire (which includes, for example weight, allergies and favorite foods) to get a set of dishes, selected exclusively for their tastes.
This is a popular modern solution in all areas of business and technology. Gamification - the inclusion of game elements in non-game applications. For example, your delivery application may have a bonus collection game element, an entertaining mini-game, an animated mascot, or any other feature that makes you different from others.
A one more convenient feature, which is rarely used by delivery applications. And that's a pitty. Subscribing to a specific set of products that would be delivered to the buyer at a certain time is convenient during remote work or study, when everyone plans their own day.
Consider making flexible pricing for delivery. For example, happy hours, when demand for delivery is less and prices at this time are cheaper than usual. It is also worth taking care of the feedback, because the attitude towards the client determines whether they will return to you again.
Marketing strategy is also worth your attention. Take videos or screenshots of your app's UI design and attract people to use it - this will help to find new customers if you already have a business, or attract users to the delivery application if this is your first startup. Find in the application what makes it unique and build an advertising campaign about this feature.
How to Build a Successful Delivery Application: Postmates Example
The first thing that distinguishes the Postmates from other delivery applications is that they deliver not only food, but any product the user needs. Many of their orders relate to small household items, such as sponges for washing dishes or disposable forks. This is useful if returning home from a store you suddenly realize that you forgot to buy something important.
Postmates has its own history of negative reviews and criticism, for they are willing to take risks. This application delivered food from restaurants with which they hadn’t signed an agreement, and collected reviews about them. If the restaurant was popular enough among customers, Postmates would offer them to join the platform.
One of the most important elements of the delivery application is its driving force - couriers. Some restaurants and delivery platforms hire a full-time employee, while some prefer to work with freelancers.
Most delivery apps, such as Postmates, UberEATS, Seamless, are the second type. But they treat the freelancer as an employee. Postmates, for example, offers medical insurance to their couriers, which covers any body injury while they’re on clock.
Delivery application development costs
The pricing for a custom software depends on the hours that the developer will spend on the project, and the geolocation of the developer. For example, American companies are considered the most expensive, with hourly rates about 200-300 $. But there are offshore companies that will allow you to save some money, and not lose in quality.
On average, it takes about 400 hours to develop a delivery application (but each case is unique):
- 50 hours at the initial stage of technical documentation;
- 300 hours for Front-End and Back-End development;
- About 100 hours for tests.
Starting a successful startup in times of crises is not simple, but possible if you choose the right niche and working strategy. The market is changing today and we advise you to look for the pros in these changes.