Home delivery business model sprouted so well during the COVID-19 period. Everybody being cautious, adopted social distancing and welcomed this business with open arms. An estimation says that this business will hit the 7th cloud by 2023 crossing a $137 billion outcome. Online delivery of food, groceries, medicines, etc. is something that has gained popularity in a very short run. This post gives enough information on the home delivery segment. It contains the introductions, its background, features, benefits, etc. details. People who are planning to get their grocery or food delivery mobile app development done must go through this piece of information.

What is a Home Delivery Business Module?

The term “Home Delivery” refers to providing the availability of food, grocery, and other items at the client’s residence. The activity is performed by the business chains having multiple tie-ups with popular and emerging business entities. People order their requirements from the website or applications and then the postmates deliver the staff to the client. 

Read Also: Understanding the Postmates Business Model and Revenue. How Postmates Works?

The chief purpose of implementing this technique is to save an individual’s time in standing in the queue, waiting for the order, and getting late for somewhere. It reduces the efforts and acts as a boon for those who are busy with their schedules The food delivery business model is quite popular amongst the working professionals who find it quite difficult to manage their food schedule. 

Some Important Statistics of Food/Grocery Home Delivery Business:

  • 60% of the audience order food and other stuff online, twice a week. 
  • 57% of the population wants home delivery so that they can amuse themselves without any hassle.
  • During the COVID-19 crisis, online delivery was a major concern and it will report a hike of 5% CAGR in 2023.  

This was all about the definition and statistics comprising the food or grocery delivery business. Now comes the part, which will describe the background i.e. the place and scenario from which the food home delivery business model was originated. 

When & Where the Idea of Food Delivery Originated?

Before the realization of any technique or procedure, there will always be a point of origin or its existence. So, when it comes to the grocery home delivery business model, it becomes rudimentary to read about the existence. 

food delivery app

Origin of Online Delivery Business: 

The first online ordering was conducted in 1994 of Pizza from the very popular Pizza Hut. If we talk about the very first online delivery agent, then it would be World Wide Waiter give which was founded in 1995 and was the first to provide home delivery of food. By the 2000s the popular food chains started taking online orders via mobile applications. Payment gateways were also implemented which helped clients to utilize their e-Wallet Apps for making the payments. 

Another tale associated with the business module was the first on-records meal delivery i.e Pizza was done in Italy in 1889. King Umberto and his Queen Margherita delivered Pizza to their place in Naples.

Gradually, this pattern was further transformed to fit in the day-to-day schedules and the online food delivery business model became popular around the world.    

So these are some of the tales associated with the origin of this module. Now we will discuss the types, features, etc. offered in the grocery home delivery business model. 

What Are the Types of Food/Grocery Home Delivery Business?

Before we jump on the benefits or features of the home delivery business, we should first understand the “Types”. In how many kinds the business is distributed. Typically, there are three prominent segments in the food delivery market:

The Order Only Model

order only model

Your application or website will bridge the gap between the locals and food ordering unit. The application will help the user and restaurant partner to get in touch with each other and work accordingly. The core benefit of associating with this type of online food ordering business model is to let consumers know about the restaurant and its food offering. Simultaneously, the app allows users to order food from their preferences. 

It was all about the type. Now comes the two criteria aligned with the “Order Only Model”. It contains the Order Allocation and Delivery criteria. To gain more knowledge on these aspects, read more:

The Order Allocations:

Order is being accepted from the apps or websites. Restaurants or retailers will receive the orders through Fax, Mailing, or mobile notification. Once the partner receives and confirms the order, a message or notification will be provided to the customer. 

There are a few instances where orders get directly pushed to the kitchen using the POS system. This is the first segment of the “The Order Only” module. 

Delivery:

Orders are being delivered to the customer’s doorstep. In case of any discrepancies, the delivery agent will get the number of the client. 

The Order & Delivery Model

order and delivery model

This model coordinates between restaurants, customers, and delivery services. If you look at the popular home delivery applications like DoorDash, Zomato, Grubhub, etc. you will notice them utilizing this methodology. The functioning of the criteria goes into two prominent zones like Allocation and Delivery. 

Read Also: DoorDash Pricing Model - Lessons on Making Money as the Food Giant Does

Fully Integrated Model

This is a different home delivery business model working for the “Meal Delivery Startups”. If you are planning to start a meal delivery venture, this would be the right fit for you. Here the owner himself/herself cooks and assigns the delivery of the food. But most of the users hire Chefs which makes it easy for them to run the business. 

fully integrated model

This module also works on the same scenario as Allocation and Delivery. But here the process is slightly different. The order allocation has two phases i.e. No involvement of Admin and Some involvement of Admin. The delivery process is conducted by the drivers that a company hires. All the drivers were provided with a bunch of orders that have to be delivered to the customers. 

So these are the three prominent business aspects of the meal delivery business model. Now you can check the advantages and other metrics of the home delivery business plan. 

What Benefits Do You Get with Online Food Delivery Business Plan?

Here this section conveys the benefits of having a Grocery/Food Home Delivery Business. A glance is mandated before we come across the other aspects of this business:

Loyalty Towards the Business:

Customers usually do not shift their preferences, once they get familiarized with one app. As per the research reports displayed years back by Mckinsey, 70% and above users rarely prefer other apps over their used ones. But with the mushrooming competition and business trends, people nowadays seem to keep experimenting with other applications. 

Network & Audience Reach:

Networking and a good audience reach is something that drives fruitful outcomes for both customers and suppliers. Generally, big businesses deal with a big group of networks providing good productivity. These are complex to establish and even complex to replicate. 

Deciding Priorities:

Being a food market hub, you can decide the supply priorities of restaurants and other big chains. This thing flaunts your business so well that you can charge higher margins and elegant customer ratings. 

Read Also: How Much Does It Cost to Develop Food Delivery Apps like Zomato, Grubhub, Uber Eats?

Monopoly Over Rates:

Once the businesses are on higher scales, they get the monopoly to set their margins, prices, supplies, etc. This sometimes benefits and sometimes lacks the business opportunities. But yes, we can say this food delivery business has higher success rates once you are all set to take in the dive in the sea. 

food app development consultation

No Legalities:

Postmates (delivery agents) work on a contract basis and hence there are not many legalities. As the agents are not employed permanently, the operational costs occur comparatively low. The agents are neither paid medical insurance nor paid vacation. 

How Food-Grocery Home Delivery Business Works?

Just like any other work, food- grocery delivery app has been a point of the chat since its existence. Everybody from any corner keeps on searching how this module works? So here you go with some general steps. Read out the piece of information carefully:

Research Work

Before implementing any plan, there should be a pipeline. It means, there should be a path to walk upon. In food home delivery, you are required to get aware of things like product, app type, its market and competition, client’s behaviors, etc. 

Now once you are done with the mobile app development process, you are required to reach business ventures like contacting business chains, popular vendors, delivery agents, etc. After this research, you need to align with your business module. 

Assigning Task

Now that you have sufficient manpower and strategy, you are required to implement it. Offering proper tie-up plans, adequate incentives or commission on completion of the task, etc. are some of the required actions needed in any business. The task consists of Order accepting, postmates assigning, delivering the order, etc. 

Accepting Orders

People order food and other stuff either from the website or from the application. The food home delivery works like user push order from the app. The business partner or the respective food chain accepts the order. People accepted this procedure as home delivery is more convenient despite traveling to the respective place and getting in touch with the crown (being in the pandemic condition).

Grocery delivery app development

Assigning Agents

Postmates or delivery agents are aligned to conduct the delivery of the food or meal to the respective place. These delivery agents are subjected to contract appointments. These are not permanent employees of the companies. There are no operational pressures, fix remuneration for them. But yes, the incentives and other facilities like traveling or accidental allowances are there. 

Delivery Implementation

The delivery agents are aligned to complete the Delivery Process. The customers are informed with notifications about the delivery of the meal on their doors. The notification contains the product details, agent name, arrival time, etc. 

Read Also: How Much Does It Cost to Develop Grocery Delivery Mobile App?

Simultaneously, the customer is requested to complete the feedbacking and rating on the delivery partner. 

Agent Screening 

In the light of the COVID-19 crisis, agents are being screened before moving for the delivery of the product. Simultaneously, food and other stuff are packed and distributed with great hygiene parameters. Agent’s body temperature and health status are some criteria on which delivery of the product is conducted. 

So this was the whole process on which the Home Delivery Module works. Coming sections will disclose the Evaluation Process of the business, Benefits, and other crucial criteria of the meal delivery business. 

Assessment of Your Food Home Delivery Business Model 

The most indispensable thing is to analyze your food/grocery home delivery model. The analysis takes place in several channels or we can say expanded steps. Let take a look over the Metrics or KPIs involved with Meal Delivery Business. 

Key Performance Indicators (KPI’s)

How will you get to know that your business is in pink about its health? Well, this is accessible through Key Performance Indicators (KPI’s). A process to evaluate your business standing and your worth to investors and stakeholders is done through these KPIs. The businesses establish their Platform KPIs to make evaluations of the businesses. This gives them an overview of the overall productivity and helps in unfolding success stories to the investors.

Orders & Receipts

The money you are generating comes second, Order & Receipts comes first. The number of orders received decides the growth of the business. In general, when you obtain more order, it will convert more money and that eventually adds business success. Besides, funding and investing also play a significant role when you are converting more orders.

Must Read: Challenges Faced by Food Delivery Apps like UberEats, Postmates & Swiggy

Average Deliveries 

The average number of deliveries explains either a business has approached suitable economic stability (optimum margins). With the help of an average number of orders/ per hour deliveries, a business can estimate how much it getting and in what direction i.e. Positive or needs to work more.

Standard Profit Per Delivery

Another thing that comes around is the Standard Profit obtained Per Delivery. Keeping in mind the average profit earned on a per order basis forms part of assessing the profit ratio on each work unit. It also helps in getting the most valuable partners i.e. restaurants, big cafes, and other chains that drive more per order revenue. It also showcases the non-productive areas which need to be removed or need to be re-structured. 

Driver KPIs

KPIs aligned with the Driver and Partner Restaurants are the key elements. Here the operational activities are quite complex and require optimizations at multiple levels. 
Various multiple channels drive the proper status of the business in front of the company. These are below:

  • Standard Time Per Order
  • % of Driver on Order Basis or Idle
  • Support Tickets (Raised & Resolved)
  • Customer KPIs
  • Customer Sustainability
  • Net Promoter Score (NPS), etc. 

food ordering app development

What Features You (Customer) Get Food Home Delivery Business?

In the whole scenario, either we have discussed Orders, Money, or the procedure itself, Customers are the primary and will be the core element. The entire home delivery business is based on the client’s behavior and reaction. 

So for those, who have gone through this article as a customer himself, we have shared some crucial points which act as the advantages for the customer from the meal delivery business model. Here we go:

Multi-Store Functionality

Now comes the applications which not only deal with food and groceries but offer e-Malls for shopping, Medicine, etc. stores at one place. Apps like Amazon, Flipkart, etc. are the best examples of it. 

When we talk about multi-store functionality, it becomes quite complex to manage them but with the right technology, we can deliver products that would need the least human intervention and help you manage your business easily. 

Easy Navigation

Food Home Delivery Business Model has great UI/UX design and utilizes emerging technology to provide easy navigation and functionality to the users. It often leads to quick actions like selecting the item, adding it to the cart, and final step purchase.

The tougher and complex the navigation, the more the chances of your customers leaving the application. Over the years we have been delivering solutions that keep your customers to your business and help them with interesting solutions. If you are looking forward to solutions that earn you greater profits, then you are at the right place. 

Another Poiner Feature Includes:

  • Quick Checkout: With one click check-out process it becomes easier for the user to place their orders. It is often noted that if the check-out process takes time people may abandon the cart and do not make the payments.
  • Diverse Payment Methods: With diverse payment methods, it becomes quite easier for the end-user to pay for the services. One can have an in-app payment system, cards payments, or cash on delivery.  
  • Order Tracking: With an order tracking facility one would know when things would be delivered to them and what is their order status. They can schedule delivery timings and slots as per their convenience. 
  • Everything on Single Click: One can get things with a single click. It is important that the things that you work on are designed in a way that they can be executed with the least interaction. This makes your app faster and the consumer journey convenient. 
  • Wishlist Products: Add products to your wishlist and see when you can buy them. This would make your customers stay loyal to your brand. Also, let them add what they love to the wish list that would make it easier for them to shop next time. 
  • Secure Payment Gateways: Security is another point of concern here.  Make sure your products are designed in a way that they are engaging and interactive but also they need to be secure and safe. 

Contactless Delivery

Ever since the outbreak of the pandemic, it became quite difficult for the people to get their deliveries by delivery men. With advanced technology, we can help you build solutions that offer contactless delivery. 

Suc solutions are based on Artificial Intelligence, Machine Learning, and Big Data. Our experts are well-versed with the market trends and help you build strong solutions. 

These are some of the characteristics which have been displayed from the customer’s point of view. Home delivery business has an approach to a height at which this has stand-out to be the best work segment for any established or start-up.

How Much It Costs to Have a Home Delivery Business?

The development costs incurred in the home delivery plan depend upon various aspects. To have a successful business like Grubhub, Seamless, Uber Eats, etc. An investment of $30,000 to $40,000 is required.  If you want to develop an application that is ladened with advanced features and stands out from your competition, then you may have to extend your budget to around $75,000 to $120,000. We make sure to build unique solutions that would take your business to new heights. 

cost to develop an app

It might be high and low depending upon the customizations and other needs of the clients. Similarly, there exist some on-demand solutions which give you the freedom to have a delivery business at a competitive price and in a short span. Users and companies both are implementing their plans to deliver some of the finest apps to clients with satisfactory outcomes. 

Final Words:

On the whole, the article is a complete guide on Food/Grocery home delivery business module. Both the audience and company can get detailed know-how on meal delivery business plans. There are a few instances where home delivery has served as a boon to the users as well as the company. 

As per the reports from leading websites on the Internet, around 60% of the restaurants have accepted the fact delivery service and online ordering have impacted sales. It has boosted the average sales by 20%. Some reports state that the re-ordering market will reach a height of %7.5 to $8 Billion by 2022. Hence this would be a new business drive that will reach the seventh cloud very soon. 

tech consultation

 

Arun Goyal

Managing Director @ Octal IT Solution, a prominent Mobile App Development Company offering cutting-edge iPhone App Development and Android App Development services to Startups, SMEs and Fortune-500 Companies.

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