Australian Food Delivery Market - Next Steps to Remain Competitive

The food industry can evolve so fast, it’s sometimes hard to keep track. With the modern consumers increasing need for convenience, the next big innovation has been food delivery – which has grown very swiftly, becoming a $2.6 billion market in Australia alone.

But already, the traditional food delivery service such as that offered by Menulog or Uber Eats is becoming obsolete. There’s a lot of competition, both from other third party delivery providers and the countless restaurants that have set up their own apps and delivery services. There’s even a program that lets you compare the price of delivery between such apps to help consumers get the best deal.

It’s becoming an increasingly common and popular business strategy among businesses of all sizes, in all different industries.

 

Because of this difficulty, some of these third party providers are attempting to morph into subscription services. For instance, Deliveroo recently set up a system where instead of simply providing one-off food deliveries for customers, they instead get their users to pay a monthly fee in return for unlimited deliveries – a similar sort of set-up to Netflix, for example. This provides them with more secure customer base and steadier source of revenue.

Deliveroo and others are also investing in what’s become known as ‘dark kitchens’, which are fully equipped commercial kitchens that don’t sell to walk-ins at all, but are purely there to fulfil orders placed on a particular delivery app. Deliveroo’s dark kitchen in Collingwood services about 20 different food brands in the one building. Such a strategy makes subscription a much more viable option, as there is less reliance on the original restaurant brands and more control over the entire process of order creation to delivery.

But it’s not only third-party delivery companies that are moving to a subscription-based model. It’s becoming an increasingly common and popular business strategy among businesses of all sizes, in all different industries. With such a glut of options assaulting consumers in food industry in general, creating a subscription service to ensure continued customer loyalty is a very smart strategy.

For instance, Butcher Box is a subscription butcher service growing rapidly in America. For a monthly subscription fee, it allows you to choose from over 20 different premium cuts of meat, sent frozen to your doorstep. There are also dozens of pet food, meal ingredients, ready-made meals and a thousand other types of subscription boxes.

Subscription boxes are the perfect solution to this indecisiveness and regret …

So why is this model gaining so much popularity? The answer is that customers have been made fickle by an overabundance of options, and so locking them in to monthly contract is proving far more effective. Forbes suggests the more choices consumers have, the harder it is for them to decide, and in turn, the less likely they are to buy. Moreover, consumers are more prone to feel buyer’s remorse after choosing among a plethora of options.

In such a world of overwhelming choice, consumers can get stuck when it comes to selecting the items they want. Subscription boxes are the perfect solution to this indecisiveness and regret as they choose products according to a customer’s personal preferences, simplifying the process, and letting personalization become the center of the retailer-customer relationship in a way that encourages extreme loyalty.

All a consumer must do is choose their preferences online, and an item arrives at their doorstep, picked, packaged and delivered, without requiring any extra effort. Furthermore, the element of surprise created when opening a subscription box is something many consumers enjoy.

So this combination of ultimate convenience, personalisation and purchase simplification make subscription boxes the perfect option for many of today’s consumers. In fact, First Insight’s recent survey, showed that 25% of respondents are currently receiving a subscription box, and another 32% plan to subscribe in the next six months. Subscription seems set to become one of the main modes of purchasing used by customers in the coming years.