What is local delivery?
Local delivery is a service that connects businesses with local delivery companies to get their products in the hands of their customers quickly and efficiently. A focus on neighboring delivery zones offers benefits like same-day delivery, lower commission fees and other perks.
Whether it be to order food online, for grocery delivery or personal care services, the hyperlocal marketplace meets the needs of a limited geographical area and helps small or big offline businesses grow their operations online. After all, covid has demonstrated that opening an online revenue stream helps businesses boost their growth and better adapt to unexpected changes.
Why is the hyperlocal delivery model so important amidst COVID-19?
The delivery ecosystem of many communities has had to adapt to reflect the shifting needs of customers. In response to covid-19, online delivery became a lifeline for businesses of all sizes because people were confined inside their homes and unable to go to stores. The on-demand delivery model rose as a solution with thousands of consumers turning to e-commerce platforms to buy essential goods.
The pandemic induced major changes in consumer behavior by making online shopping the only option for consumers to meet their daily needs. To stay relevant in today’s competitive landscape, it’s no longer enough for companies to allow customers to buy their goods online, they also have to make sure they deliver the goods in a shorter period of time… and the hyperlocal delivery model does exactly that.
How a Hyperlocal Delivery Model Works
A hyperlocal marketplace works by delivering the goods and services of offline stores to customers within a focused geographic area. It’s a great way to make sure products are delivered in a timely manner. If a restaurant doesn’t offer food delivery, a hyperlocal business can take care of this service.
In the hyperlocal marketplace, sellers are only allowed to sell in targeted zones. They earn money by selling their products or services while store owners or stakeholders earn commissions. If you don’t have your own delivery fleet or don’t want to work with third-party apps, hyperlocal businesses are a great alternative. Users are able to place their orders in various channels such as a mobile app or a website.
Thankfully nowadays, if you’re not tech savvy, many solutions are available to you. For example, UEAT helps restaurants get online in no time by personalizing them a branded online ordering platform and designing a custom white-label app. This way you can offer your customers the experience they deserve, increase your profit margins and focus on the key aspects of your business.
Which companies are dominating the food delivery industry?
According to Bloomberg Second Measure, as of mid-September 2021, online delivery apps are second to none when it comes to the food delivery ecosystem in the US. The estimated total share of sales of August 2021 places Doordash as the most widely used third-party delivery service, with 57% of total market share to its name.
UberEats, holding more than a fifth of the market, stands at second place. Grubhub is currently in third position, holding 16% of total sales. Together these three companies represent more than 80% of the online delivery market in terms of share of sales. As of now, Uber is looking forward to upscaling into the grocery market as well, in an effort to expand their operations.
Trends in the United States show that differences in market share of third party delivery services vary by region. Data from August 2017 shows that the preferred delivery app services changed between delivery zones, even within individual states themselves. In Texas, for example, Grubhub was the top delivery service in El Paso with a whopping 91.90% share of sales but got defeated by UberEats and Doordash in Austin and Houston.
Are delivery co-ops the solution to high-commission third party delivery apps?
Third party delivery services have quickly become the market standard. Taking advantage of this, it is not uncommon for the commission rates of these services to account for up to 30% of an order. Local delivery service alternatives guarantee commission fees that give smaller businesses a better chance to compete.
Predatory commission practices are criticized by many food establishments. As reported by The New Yorker, restaurant owners claim they feel they are working for the apps instead of the benefit of their own businesses. Things back in 2019 got even shadier when, allegedly, Grubhub was caught sneaking hidden costs to restaurants, costing them hundreds of dollars per month in losses (source).
The hyperlocal delivery model gives way to friendlier business practices that consider the needs of restaurant owners. Thankfully, with UEAT’s online ordering system, you have access to a delivery ecosystem that adapts to your own terms, no matter how you choose to deliver your food to customers. Restaurant owners that use our platform have reported substantial increases in sales and ticket sizes across all locations after switching to UEAT’s white label ordering app.
What types of delivery apps are there?
Restaurant-to-consumer apps
Nowadays branding is key for business growth so restaurants and food chains often create their own website and custom online ordering app in order to improve the customer experience and collect valuable data. These apps offer restaurant owners more flexibility when it comes to delivery as they can adapt their strategy to fit their needs. They can either have their own delivery fleet, work with hyperlocal businesses, collaborate with third-party apps or put in place a delivery strategy that mixes one or more of the mentioned delivery options.
Having your own custom online delivery app is a great way to stand out to local customers. Did you know that 80% of restaurant customers prefer to use their smartphones to order food online? It would be a shame to miss this opportunity. With UEAT’s custom mobile app development service, restaurant owners benefit from the following advantages:
- Integrated in-app loyalty program
- Our team can set up your restaurant’s mobile app, online ordering platform and a branded web page that links to all of your system
- An artificial intelligence module that makes upselling easy
- Access to critical data to optimize your OPEX
- Contactless ordering solutions
- Access to smart marketing tools
- Restaurant delivery systems on your terms
- And much more!
Third-party apps
Through the use of a single delivery app, customers can place delivery orders from various featured restaurants. Customers who use these platforms enjoy being able to compare prices and having access to restaurant reviews. Big players in the online delivery industry like Doordash can ask for up to 30% commissions on sales.
Metropolitan areas around the globe have embraced this business model, with ghost kitchens springing up as the covid-19 pandemic forced restaurants to suspend their services. These businesses operate as a kitchen only, without a floor plan.
Pros and cons of food delivery apps
Overview
While restaurants want to extend their reach, they shouldn’t underestimate the power of local delivery providers that offer convenience, good service, and oftentimes better rates. Whatsmore,
with your own branded website and mobile app, you can easily collect information and analyze consumer behavior in order to personalize the customer experience. In today’s world, data is a key to ensure the sustainable growth of your business. Plus, customers who enjoy making their online orders through your app have a higher probability of becoming repeat customers.
If you are considering offering online ordering to your customers, you should know that most third-party delivery apps keep all the data to themselves so restaurant owners don’t have access to important insights.
