The technology behind the growth of the food delivery industry
The phenomenal global growth in the meal and grocery delivery market has been driven by the perfect storm of the Covid pandemic, the rise of the gig economy, and the advancement of the technology that makes food and grocery delivery faster, more efficient, and safer for both customers and drivers.
In this blog we cover the phenomenon of ghost restaurants, explain the importance of last mile food delivery, and share how delivery drivers can ensure that they don’t hand over a food order to the wrong hungry person.
Meal and grocery delivery revenue growth
Research published by Statista shows the impressive growth of the market since 2017, with 22% annual growth projected in 2024 alone.
Good food delivered fast
A few short years ago the only food that you could get delivered to your home was a pizza, which was great if you liked pizza and weren’t watching your calories, but if you wanted something healthier or a bit more sophisticated you would need to travel to a physical restaurant which would involve getting dressed and dealing with actual people. Sometimes we crave the food but are just not in the mood.
So, what has changed to make that possible?
Last mile food delivery
In the transportation industry last mile delivery refers to the very last step in the supply chain process where an item is delivered to a person’s home or a retail store. From a customer’s perspective this is the most crucial stage as it is when they get the product in their hands and can check that it is what they ordered and that it is in the expected condition.
Last mile food delivery is even more important due to the nature of the product. A delivery window of 2pm to 8pm might be acceptable for getting a sofa delivered, but it certainly wouldn’t be for a hot meal.
Food businesses that deliver have to ensure that they can optimize their supply chain in order to hit very narrow delivery timeslots. This is only possible with the aid of technology.
Virtual restaurants and kitchens
A virtual restaurant is not a restaurant in the conventional sense as you can’t visit it and sit down for a meal. Also known as ghost kitchens or cloud kitchens, it is a food provider that serves customers exclusively by delivery and pick-up with people either ordering by phone or increasingly, by app or via the business’s website.
What started off as a way for conventional restaurants to stay in business during Covid lockdowns has grown into a unique industry that benefits from lower staffing requirements and reduced operating costs with built-for-purpose kitchens located in low rent areas with good access to transport links.
Crucial to the success of virtual kitchens has been the development of specialist software tools and apps that make the ordering, preparation, and delivery of food simple and transparent. These work by linking the customer, kitchen, and delivery process into a seamless workflow that can easily adapt to unexpected factors.
- What if the restaurant runs out of a particular dish? It can be immediately removed from the virtual menu.
- What happens if the delivery driver gets caught in traffic? This information is relayed in real time to the customer and kitchen.
- What happens if the customer is not at home but is having a picnic in the park? The geo-coordinates of the delivery location can be passed to the driver.
- And if the customer doesn’t have cash for the driver’s tip? They can add one via the app.
Contactless food and grocery delivery
Food deliveries are known as contactless when there is no physical interaction between the customer and the delivery driver. What started out as a necessity during Covid has proved to be a popular and cost-effective way of getting food delivered and certified without having to sign anything to confirm receipt. This provides the health benefits of removing physical contact and reduces the hassle of arranging an exact delivery time as groceries can be left in a safe place specified by the customer, or in a locked storage receptacle that the customer can retrieve at their leisure.
Depending on the circumstances, there are a number of ways of solving the problem of confirming that the delivery has actually taken place, and that the correct person has taken delivery.
- If the customer is at home, they can scan a barcode on the food packaging with their phone in the presence of the driver and this can serve as a digital signature.
- If the customer has specified a ‘safe place’ to leave the delivery the driver can take a photo, which is automatically visible in the customer’s app with a push notification sent to let them know.
- To prevent the wrong person from claiming the delivery, the app can include face recognition capability that the driver can use to make sure that they are handing the food to the correct person.
- The geo-location data of driver’s phone or vehicle can be used to trigger an SMS or app message to the customer that they have visited the specified address.
Food delivery tracking
Time seems to slow down when you are hungry and waiting for a food delivery to arrive. Rather than phoning up the business and possibly distracting them from finalizing your order, the best apps provide real time delivery tracking so that you can see the status change as the order is accepted, prepared, and dispatched. You should then be able to see a map showing the location of the driver, so you know when it is safe to get out the plates and cutlery.
As you would expect if you have booked an Uber before, Uber Eats has a similar real time map visual. You can access it in the app by tapping the receipt icon on the bottom menu bar, selecting the current order, and then tapping “Track” to view the status and location. With Google Food Ordering customers can access order tracking via My Purchases in their Google account.
Ordering food by chatbot
If you have tried browsing a conventional restaurant menu on your phone that has simply been scanned and uploaded as a .pdf you will know that it doesn’t make for an easy or quick experience. Online menus that have been optimized for mobile are a step in the right direction, but what is really useful is a chatbot that can provide a more flexible and ‘human’ ordering experience.
“I’m in the mood for chicken and I’m very hungry, what can you suggest?”
The chatbot can then display meals that fit the criteria of chicken + large portion and can even show photos and suggest alternatives.
“If you are really hungry and in the mood for poultry, why don’t you try our festive turkey special?”
With a chatbot you can provide all sorts of extra information that would just clutter up a conventional menu – nutritional information, where ingredients have been sourced, and even reviews from other diners are just a few ideas.
The customer could even provide a delivery address and provide payment details without even leaving the chat app. Updates on the order and delivery status can also be sent automatically in the chat.
Food delivery by drone
If you thought that this was a fantastical idea that would never work in practice, you would be wrong. The Chinese delivery giant Meituan has been using drones to deliver food orders for almost two years.
To avoid the regulatory minefield that has bogged down Amazon’s plans for package delivery by drone, Meituan doesn’t have the drones deliver directly to customers address, but to pick up kiosks dotted around the city. These set routes make the task of navigating urban areas much easier.
In the US, startups like Flytrex are gradually rolling out food delivery by drone with the catchy slogan “Look, up in the sky, it’s your dinner!”. The area they cover is currently very limited but expect to see the service available in more areas as technology and local legislation catches up.
Ensuring the safety of customers and drivers
We have dealt with this subject in detail in our recent blog on ensuring safety in the food delivery and ride hailing industries.
We cover a number of the technology tools that ride share and food delivery companies can use to ensure the safety of both customer and drivers. These include:
- Number masking: Number masking enables two-way voice calls, without exposing each person’s phone number. This ensures secure and convenient calling between customers and drivers for necessary updates like ‘I’m caught in traffic’ or ‘Please knock as the doorbell is broken’.
- Multi-factor authentication: When recruiting new drivers and signing up new app users it is crucial that the company is able to confirm that the person is who they say they are. The most efficient way of authenticating large numbers of app users is with an automated process that sends a one-time pin code (OTP) on a verified channel like SMS or WhatsApp as part of a 2FA verification process.
- Automated identity checks: An effective first step in driver vetting process is to do an automated identity check using the person’s driver’s license and a selfie that they submit. Facial recognition AI is used to automatically detect that the photo matches the license.
How to build a web chatbot – best practice and step-by-step instructions
Everything you need to know to build a chatbot for your website, including design best practice and step-by-step instructions using Answers no-code chatbot builder.
Key benefits of using WhatsApp Business Platform with Infobip
Ready to build end-to-end experiences on your customers’ favorite chat app? Here’s everything you need to get started.
How your company can leverage datafication for growth
Explore how datafication can help optimize processes, personalize experiences, and improve decision-making across industries.