Digitizing Food Delivery Operations To Increase Customer Loyalty and Profitability

The rapid evolution of mobile devices, better connectivity, changing customer needs, and the need to deliver on instant gratification expectations are driving QSRs (Quick Service Restaurants) to outsource last-mile delivery operations that service customers.

By Soham Chokshi

The casual dining experience has undergone a paradigm shift, thanks to skyrocketing demand for online food deliveries. The rapid evolution of mobile devices, better connectivity, changing customer needs, and the need to deliver on instant gratification expectations are driving QSRs (Quick Service Restaurants) to outsource last-mile delivery operations that service customers. Result? An exponential increase in the number of food delivery aggregators across the globe.

These new-age platforms are enabling customers to place and review their orders via digital means. Furthermore, the pandemic-induced restrictions have also created favorable conditions for online food delivery apps to flourish. This unprecedented event has inadvertently multiplied the business for food delivery apps. This, in turn, is contributing towards a growing gap between restaurants and their customers. Hence, emerges the need for restaurants to own their customer’s food delivery experience before it’s too late.

Let us discuss some crucial aspects foregone by QSR when they collaborate with food aggregators to outsource food deliveries.

Reduced Control Over Customer Experience
When QSRs tie up with food aggregators, they are cut off from playing any role in the customer’s delivery experience. They have negligible control on ETAs, priority deliveries, turnaround time, handling customized orders, etc.

Profit Dip
Food aggregators often charge high commission rates from restaurants while offering substantial discounts to customers. This has caused restaurant bottom lines to plummet. It’s an alarming situation that has also caught the attention of the National Restaurant Association of India. With commission charges and discounts amounting to 40-42%, ensuring direct delivery systems has become crucial for QSRs.

Hurdles In Rapid Food Dispatches
Food delivery aggregators often partner with countless restaurants in a city. This makes it increasingly challenging for restaurants to prioritize orders. For example, if a restaurant has to deliver an easily perishable item such as ice cream, it may struggle to facilitate such a priority dispatch on time.

Poor Customer Insights
For restaurants, it pays to know how a customer truly regards their food. This can prove to be the essential difference between an average and a great eatery. But, over 43% of restaurants claim that third-party apps withhold first-hand customer feedback. So, while food aggregators multiply orders for restaurants, the latter loses critical customer insights that can significantly boost customer loyalty. With even refunds subject to the food aggregator’s discretion, the scope of extending a personalized experience to the customer also drops.

Battling Intensifying Competition

The key to success amid such intense competition lies in gaining control over the logistics process. Savvy QSR brands utilize digital technologies to streamline and simplify last-mile delivery operations with the customer seated at the top of the mound. Let’s glance through some of the ways they are driving greater control over their delivery operations.

Route planning and optimization: This ensures that the delivery person takes the most efficient route to service customers.

Maximize delivery per vehicle: Savvy restaurants leverage modern logistics tools to optimize vehicle capacity and drive multi-drop deliveries on a single route.

Check on the driver for route deviation: Food delivery management platforms ensure delivery executives do not take unnecessary route diversions and unplanned stoppages, helping save valuable time and ensuring ETA adherence.

Ensure on-time delivery: This is highly crucial to QSR chains as this prevents food wastage. Intelligent food delivery management solutions constantly optimize routes in real-time to shrink delivery turnaround time.

Smart order allocation: Using capabilities like auto-allocation of delivery tasks and KPI-based onboarding of delivery executives, QSRs can further reduce service times and boost delivery productivity.

Order clubbing: By clubbing multiple orders based on various parameters like delivery time, proximity from customer, order type, and more, advanced last-mile delivery tools enhance delivery profitability.

Real-time order tracking: To boost customer engagement, advanced food delivery platforms automatically send out notifications via SMS/WhatsApp to customers and keeps them 100% aligned with delivery progress.

Online payment integration: Savvy restaurants use modern delivery tools to ensure seamless and secure online payment integrations. This allows customers to make changes to payment methods on the fly.

By improving their services and delivery mechanisms, brands stand to maximize customer satisfaction. After all, a well-satisfied customer will definitely return to enjoy the experience, again and again.

It has been seen that increasing customer retention merely by 5% has increased profitability by 25%. Therefore, delivery agility, customer-centricity, and last-mile simplicity will be key growth drivers for restaurant businesses worldwide.

Soham Chokshi is the Founder and CEO of Shispy