Introduction
Today most individuals spend a big part of their day on the internet. Hence customers seek comfort and expect safe and hygienic doorstep delivery of their favourite foods. Thanks to the COVID-19 pandemic, consumer behaviour has changed significantly. The pandemic swelled the demand for online food delivery by restaurants, and the trend will continue to grow among consumers for years to come.
Providing online food ordering is considered a proven restaurant marketing strategy that increases the revenue, sales, and profit margin. Hence, the restaurant owners and managers always look for solutions that allow consumers to place orders online and have food supplied quickly.
Numerous food courts have closed off their traditional dining room areas for the public, surging in the number of food delivery app development. This sudden growth has opened opportunities for start-ups to thrive in the online food industry.
The food delivery industry is now leading the online market and experiencing incredible growth.
The competition is fierce with the increasing number of start-ups. Hence, companies need to develop more practical solutions to sustain and grow.
However, one must be know how to develop such a solution and be aware of the challenges that can arrive and quick fixes to tackle them.
Let us understand a few challenges in the food delivery business and find solutions.
The 10 main challenges in the online food delivery business are as follows:
1. Pricing Model:
Many businesses choose to pursue with no or more nominal gain at the outset to grow in the market as they believe customers only prefer the food at affordable prices. While it is true that customers explore discounts or special deals when placing an order, lowering costs does not guarantee increased sales. The overall success of any business depends on customers’ expectations, and it is challenging to foresee customer buying behaviour.
Having said so, setting up a pricing model that drives business remuneration and does not fluctuate is quite challenging. The rising competition in the online food industry and the food prices has made it tricky for entrepreneurs to identify the right pricing tactics.
2. Maintaining Food quality:
Maintaining the same food quality is a challenge for every food delivery company as
the taste of the food is bound to change over time. Due to the change in taste,
customers shift to other restaurants as there are multiple options available in the
market and compromising with the taste is not admissible.
Filling the gap between the quality of food delivered at the customer’s location and served at the restaurant’s physical location is another threat that the food delivery companies must conquer. Delivering food at the doorsteps while ensuring the food is fresh during transit is a challenging task.
3. Maintain customer loyalty:
Retaining a customer for a prolonged time is a formidable task. Engaging new customers and building a solid customer relationship is no longer easy. Organizations must know their current customers well like, their customers’ requirements, likes, and dislikes to provide unique offers heeding to demographics.
According to a report by CleverTap, only 22 % of the new app users remain active after the first week and 86 per cent stop using a food delivery app within a month.
4. Food delivery:
Most companies fail to handle food delivery appropriately and end up making mistakes while delivering the food to consumers, resulting in a loss.
There are many issues when it comes to delivering food, like:
- → Selecting certain areas of a region to deliver.
- → Managing the inflow of order requests.
- → Selecting certain areas of a region to deliver.
- → Allotting the right number of vehicles to delivery points.
- → Maintaining hygiene.
5. Payment option:
Any customer today looks beyond the traditional method of cash payment. Given the current scenario, customers do not think twice before cancelling the order and move to another option if they do not find there are enough payment options. Not to forget that the customers first look for a refund policy in every app before placing an order.
Hence, it is imperative to include online payment methods and support cashless transactions. Also, people today prefer cashless transactions given the CoVID-19 transmission.
Do not forget to include different payment options like credit or debit cards, e-wallets, and net banking.
6. Communication medium:
When dealing with customers today, relying on just one mode of communication is not enough. As an online food delivering business, one must include several methods of communication such as email, live chat, social media, text messages, phone calls, etc.
This will ensure that the brand has a personal touch with the consumers and keep them coming back to you.
7. Market price fluctuation:
Not only the customer base but the food costs are also unstable. A considerable number of elements affect the prices in the food industry.
Businesses find it hard to keep up with market prices and wrangle to find the correct pricing approach
With inflation and the rising revenue deficits, food delivery services also need to focus on taking offensive or defensive pricing models to deal with their rivals. Thus, there is even more pressure on margins which affects profitability. Hence building the proper pricing structure is quite tenacious.
8. Choosing appropriate advertising platform:
Enticing new users can be complex in the early stages of any business, especially when one is unsure how to and which is the right advertising platform to be used.
Customers’ needs and their buying behaviour are constantly changing; hence it is challenging for businesses to recognise the best advertising strategy to target the right audience with a commendable service at a suitable time.
9. Threat of rivals
Generally, an established food delivery party takes up a larger market share, leaving very little room for the newer ones.
The threat of bigger competitors is one of the biggest challenges for small and forthcoming businesses to gain a large client base with a higher value.
