While people are stuck indoors to follow social distancing norms, consumer demand has shifted. While many business sectors are suffering due to a decline in sales, a few have emerged as winners. One such sector is the food delivery business.
The Proliferation of the Online Food Delivery Marketplace
Since the days of the first pizza online deliveries launched by Pizza Hut in 1994, the online food delivery business has become a billion dollar one. There are various aggregator platforms worldwide supported by reliable infrastructure solutions and attractive commission rates for restaurants.
Now, platform-to-consumer delivery apps even take care of the entire delivery logistics. In the future, it is possible that even lower-end traditional delivery restaurants will migrate to these new platforms, due to the total cost-effectiveness of logistics. Changing lifestyles of consumers, with a growing preference to try out new cuisines among the young has played a role too.
Revenue in the online food delivery sector was projected to grow to $122,739 million in 2020 and reach $164,002 million by 2024, according to figures revealed by Statista.
But, now with a raging pandemic outside our homes, these figures could increase exponentially, as the very definition of “wining and dining” might get altered.
The Covid-19 Effect on the Food Delivery Industry
Millions of people are stuck indoors in the widespread lockdowns, which has made grocery shopping a huge task. Maintaining a six feet distance inside departmental stores is no mean feat. Plus, the fear of contagion is greater in people who are older, have co-morbid conditions or compromised immune systems.
Considering the countless ‘work-from-home’ scenarios worldwide, where people are glued to their laptop screens to support their teams and complete their office assignments on time, there is just no time to enter the kitchen to whip up a meal. Consumers are now clamouring to get food delivered to their homes.
Mobile ordering, mobile pay and third-party food delivery services are poised to accelerate with consumers shifting to off-premise dining and contactless mode of deliveries in this pandemic, according to a food analyst from NPD Group. Many supermarkets are collaborating with these companies to enable both grocery deliveries and food deliveries from one single platform. Delivery app downloads have surged tremendously, according to figures provided by Apptopia.
Advantages of Online Food Delivery
Food delivery services have provided many benefits in this crisis. From increasing safety during the pandemic to helping customers avoid impulse buys, these services are a boon. Delivery services prevent dieters from making impulse buys from huge arrays of goodies in grocery stores, and help them stick to portion control, according to a blog post by Foodini’s Catering.
There are significant psychological benefits as well. Not only have they helped people with high risk-factors stay indoors and avoid anxiety, but they are beneficial for people who have deep-rooted fears of food shortages. Knowing that food delivery is an option can hugely alleviate anxiety for these individuals, according to an article by the National Post.
The biggest benefit is to the thousands of small restaurant businesses and workers, who can still operate through the online delivery channels. The US government has asked restaurants and bars to remain closed for dine-in services throughout the Covid-19 hotspots like New York, Illinois and Ohio to prevent the virus from spreading. These are mostly small, family-owned businesses employing millions of workers. Over 5 to 6 million workers in US restaurants could lose their jobs by June 2020 and the industry will suffer a $225 billion loss during that time period, according to a report on Business Insider. Out of every four such independent restaurant businesses, three will not make it through these shutdowns, without any government assistance, which is why drive-thru, delivery and take-outs are important to keep these businesses afloat.
Thanks to technology, such measures are available to us today. Food delivery services also need to follow the strict safety guideline issued by the government for management of employee health, food packaging and on-premise sanitation to continue to serve people.