Liquid Barcodes

Resources

Delivery Innovations Drive Customer Loyalty

Paula Thomas, Chief Content Officer, Liquid Barcodes

23/10/2018

The convenience and food industries have always understood the critical importance of both time and accessibility for customers. These factors already drive key decisions around location, staffing and food formats, but in recent years, those same customer needs have driven the global explosion of tech platforms and delivery companies offering innovative solutions and disrupting our industry globally.

According to McKinsey, the largest five companies in the food delivery sector globally — Just Eat, GrubHub, Delivery Hero, Deliveroo, and Takeaway.com — now have a combined valuation of more than €10bn, offering an array of software and services that aim and claim to help restaurants increase revenues by appealing to the growing market of “lazy millennials” – whose needs are described in the image below. They want to enjoy the best food and drink, and they definitely want it available through digital channels.

In this article, we review some of the most interesting platforms and ideas globally that offer food or convenience delivery solutions, and how they function both commercially and operationally.

Oracle

Source: Oracle – Millennials and Food and Beverage: A New Focus on Service (2016)

Innovation & Disruption

For traditional “take-away” restaurants that already had their own drivers for deliveries, software platforms that offer online ordering and marketing capabilities are extremely exciting, and they are clearly delighting customers too.  Platforms such as Just Eat in the UK and Swiggy in India operate on a commission basis with restaurants – charging between 13 and 14% of each order, with revenues growing as they scale their appeal.  Just halfway through the 2018 financial year, the Just Eat Group announced that they have “served 24 million customers with 104 million takeaways” with revenues increasing 45% YOY, led by high-profile marketing campaigns which invited customers to consider a simpler approach to dinnertime – “Don’t Cook, Just Eat”.

Delivery Scooters on Standby

Just Eat Delivery Scooters on Standby

Their high-profile success results in the emergence of challenger brands with different revenue models, such as Takeaway Solutions in Australia who charge fixed monthly fees for their software, and Slerp in the UK which charges a fixed fee plus a relatively low (7.5%) commission on orders. Pitching themselves as “disrupting the disruptors”, they claim to be a better solution for merchants they claim are “being crushed” by the delivery company’s commissions.

Restaurants that are offering a delivery service for the first time (those who haven’t had their own delivery team) are increasingly using these “disruptor” services such as Uber Eats, Foodora, and Deliveroo – who offer an effective but expensive solution, charging restaurants up to 35% commission for their services as the true cost of scaling the software and delivery solutions emerge. This is on top of delivery charges to customers, so a recent clever solution is the introduction of Deliveroo’s subscription model which offers UK customers the same compelling benefits that Amazon Prime offers its customers for product deliveries. Priced at £7.99 per month, it offers customers a real reason to remain loyal to one food delivery service in this increasingly competitive industry.

Despite their low margins to date, both Amazon and Facebook are excited by the industry, with Amazon Restaurant services already operating in key US and UK cities for members of its Prime program. While only available in the US currently, Techcrunch has confirmed with Facebook that they are not charging merchants any fees or share of profits from these orders – a move that has the potential to change the dynamics of the entire delivery industry. Instead, this is part of their overall strategy to provide “beneficial resources” to users (in conjunction with partners) to prevent people from leaving its app. While for now, it is “unclear when or whether the food ordering feature will be rolled out internationally”, the announcement immediately impacted share prices of both Facebook (an increase of 1%) and its competitors (GrubHub dropped 3%).

Facebook Food Ordering

Video Summary of Facebook Food Ordering.

It’s undoubtedly a challenging market, characterised by mergers and acquisitions in order to achieve the holy grail of scale. Even young brands like Foodora (founded in 2014), who themselves have acquired three competitors, have already been acquired twice themselves – firstly by Rocket Internet, more recently by Delivery Hero. It remains to be seen how long they can survive the reported monthly multi-million euro losses, having already entered into voluntary administration in Australia in recent weeks amidst legal challenges. Delivery Hero themselves also continue to accrue losses despite their growth in order numbers and revenues.

Food Delivery Services

Mergers and Acquisitions in Food Delivery Services

Operational Innovation

An exciting opportunity for restaurants is the emerging concept of operating from shared kitchens provided by Deliveroo. Often established within shipping container units as shown below,  the “Deliveroo Editions” concept operates mainly in residential areas where customer behavioural data identifies underserved areas with proven demand for certain cuisines. These are ideal markets for restaurants who are keen to scale their brand without the need to invest in expensive new venue fit-outs, rent and waiting staff, and for Deliveroo, it offers a USP that drives both customer and merchant loyalty – leveraging the power of data and lean operations to achieve their vision “to control how people in cities eat.”

Shipping Containers

“Deliveroo Editions” – Shipping Containers Allow Premium Restaurants Cater to New Markets

Skip The Line Solutions

The joyful promise to “never queue again” is proving compelling all over the world – although brands are being very cautious with customer communications for now. Recent soft launches include Costa Coffee’s UK rollout in over 100 London stores, and 7-Eleven announcing “Scan and Pay” – both publicised only within the safe confines of LinkedIn for now while their stores adopt new operational procedures to ensure they live up to the proposition. In light of Starbuck’s much publicised headaches when they launched their mobile payment solution, this makes sense.

A number of distinctly different models are emerging to balance the operational needs of the convenience store operator and its customers, with the following models already in place:

  1. Store owners use geo-location technology to confirm the location of the customer when ordering, and their likely arrival time to collect their drinks. This technology is being used in Australia by the “On the Run” fuel stations where customers are arriving by car and whose arrival time can be accurately estimated given local traffic conditions. This same technology approach is being used by Dunkin’ [Donuts] when they re-launched their app in recent months – so it remains to be seen if the same approach works in their city/street locations.

  2. In the UK, Costa Coffee confirm the time the customer’s drink is available for pick-up at the time of order. Drinks not collected within 15 minutes are disposed of at the customer’s expense and not replaced. This is the same model used by Starbucks USA – where orders, once placed, can be delayed or cancelled.

  3. McDonald’s model has always been fast-food and fast service, so while their app allows orders to be placed, and payment details to be saved, no food or drinks are prepared until the customer is physically present and “checks-in” to collect their order. While this is the best way to ensure the food quality, it also seems unlikely to offer the same “Skip the Line” benefits as other brands.

Ordering and Payment Apps

Ordering and Payment Apps are Increasingly Essential for Convenience Retailers

Frictionless Becoming Ubiquitous

With high volume retailers such as Starbucks and 7-Eleven leading the way and achieving noticeable reductions in check-out times, and the arrival of the social media giants in the delivery industry, it seems inevitable that solutions that offer convenient home delivery or eliminate payment delays in store are becoming an essential part of every food service and convenience retailer’s service.

About Us:

Liquid Barcodes is a leading global loyalty technology company specialized for the convenience store and foodservice industries. Our proprietary cloud-based technology platform allow retailers to create and manage their digital marketing campaigns with a proprietary process we call the “customer connection cycle’ to engage, promote and reward customers activities in real-time across digital and media channels.

How we do it:

We have developed the most advanced loyalty and digital marketing technology platform specifically for convenience store and foodservice retailers globally.

Retailers use our self-service dashboard to create and manage loyalty driven marketing campaigns that increase purchases with their existing customers, as well as effectively target and acquire new customers through partners or paid media channels.

One core component of live loyalty is gamification. We have gamified branding, loyalty and promotions. We believe this approach is essential in order to get customers’ attention and ultimately truly engage them with repeatable actions thereby winning their loyalty.

Check out some of our exciting/proven results here:

www.LiquidBarcodes.com

About Me:

Paula Thomas

Chief Content Officer, Liquid Barcodes and Independent Loyalty Consultant.

With over twenty-five years marketing experience, I specialise in loyalty marketing consulting, managing consumer loyalty propositions, strategy and operations. In addition to working with Liquid Barcodes, my clients have included Telefonica O2, Three Mobile, Electric Ireland, Allied Irish Bank and The Entertainer, as well as Avios – the global points currency for some of the world’s top airlines. I am also a judge for the Loyalty Magazine Awards. 

—————————————————————————————–


Blog post

Paying for Fuel With an App Is Convenient… Until It Isn’t

Paying for fuel using a stored payment method through your smartphone and the store’s app is an amazingly convenient concept. Drive up, link your phone and the pump, pick your payment method, and fuel up. In under 5 minutes, your fuel tank is full and you’re on your way and you never touched a payment […]

Blog post

For the Love of Convenience

This summer, my family took the proverbial summer road trip vacation. First, we drove from our home in Virginia up north to the great land of lobstah in wicked cool New England. After that, we drove from there down to the endless sandy beaches in the Outer Banks of North Carolina.     1,500 miles! […]

Blog post

Save Thousands in Credit Card Fees With ACH

Visa and Mastercard announced an increase in interchange fees earlier in the year and retailers are taking action and sending a message by migrating their customers to new solutions, including mobile app-based ACH payments, and in the process increasing profits by not only reducing credit card fees but also boosting loyalty via innovative app-based incentive […]

Blog post

Subscription Programs Are Economically Smart Investments

Monthly subscriptions to products and services are economically smart investments for retailers and customers With a recession looming and gas prices still at record-high levels, customers are tightening their grip on their wallets. But this doesn’t mean they’ll be turning their backs on convenience store purchases and there are ways you can weather the impending […]

Blog post

Converting Impulse Shoppers to Automatic Customers

Subscription programs for drinks and snacks encourage customers to change from impulse buyers to automatic customers   Customers stop at gas stations and convenience stores to buy fuel, for beverages and snacks and to use the bathroom, essentially in that order of priority. A NACS survey of gas-buying customers found that half went into the […]

Blog post

Maxol Launches First-of-Its-Kind Loyalty App

Maxol, Ireland’s largest family-owned forecourt and convenience retailer, announced it has launched a new customer loyalty app with never-before-seen features in the Irish market. After more than a century serving Irish customers, Maxol’s 240+ stores and service stations are located throughout Ireland and have enjoyed global recognition for their best-in-class operations, store design and offers. […]

Blog post

Delivering Personalized Content With Machine Learning and Image Recognition

Build personalized customer connections, improve efficiency, and make intelligent, data-driven decisions using machine learning and image recognition.   It’s 7:15 in the morning and a customer – Amy – is on her way to work. She is on the hunt for coffee and breakfast and stops at a convenience store. She opens her store app […]

Blog post

Sweet Tea and Coffee Subscription Beverage Programs Brew Recurring Revenue

As summer nears, consumers are turning their attention towards refreshing iced beverages and iced tea is a hot seller this time of year, especially when sold with a subscription beverage program. Sweet tea might be the quintessential drink of southerners in the U.S, but the rest of the country has developed a taste for the […]

Blog post

Circle K’s Use of Beacon Technology to Activate Car Wash Subscription Program

Beacon Technology and Car Wash Subscription Programs Beacon technology used in tandem with a customer-facing car wash subscription program revolutionizes the customer experience by providing a quick, convenient experience. Innovation is the key to continued growth and ensuring a frictionless customer experience should be top of mind for any retailer. Circle K’s vast global network […]

Blog post

Unlimited Car Washes!

Subscription programs for car washes are a hot trend in convenience retail.

Blog post

Car Wash Program Drives Sales for United Pacific

Car wash programs are revenue drivers for convenience stores and fueling stations around the globe. Making sure the process is convenient and cost-effective for customers increases traffic and drives in-store sales. Oftentimes, car wash units occupy a small corner of the lot and do not receive much attention. This is not the case for those […]

Blog post

Danish Railway Rewards Riders with DSB Plus

The Danish railway system, known as DSB, is going the distance to reward customers by partnering with convenience retailer 7-Eleven to deliver points towards food and coffee simply for riding the rails. Whether commuting or travelling longer distances, riders who join DSB Plus earn points whenever they travel within Denmark. DSB is an abbreviation for […]

Blog post

Subscriptions for the win!

Amazon Prime is, by nature, a subscription under the auspice of membership. Pay an annual fee, get 2-day shipping and exclusive deals. Amazon took it one level further with “Subscribe & Save” where you can get everyday – and not so everyday – items shipped to you on a regular schedule.  In the early days […]

Blog post

Customer Retention Program of Circle K Vietnam

As the first international convenience store brand to launch in Vietnam, Circle K has over a decade of expertise catering to the needs of the 96 million residents of this huge country, operating a network of over four hundred convenience stores each open 24 hours a day! So launching an outstanding customer retention program was […]

Blog post

Stinker Stores Named Best New Loyalty Program in the U.S.

        2021 Best New Loyalty Program  Stinker Stores’ new loyalty program offers multiple redemptions with a single scan and stands out with a gamification feature to keep customers engaged. This article is originally published on CStoreDecisions and written by Erin Del Conte | October 28, 2021 Stinker Stores, with 103 convenience stores across Idaho, […]

Liquid Barcodes

Put a rocket under your loyalty program

With our loyalty platform, we help design and operate world-class, tailor-made subscription and reward programs that make sure your customers always come back.

Book a Demo →

We are trusted by global brands.

Convenience retailers all over the world have engaged and rewarded consumers with our tailor-made loyalty programs.

To our case studies →

Liquid Barcodes
Liquid Barcodes
Liquid Barcodes
Liquid Barcodes

Convenience retailers all over the world have engaged and rewarded consumers with our tailor-made loyalty programs.

To our case studies →

Liquid Barcodes
Liquid Barcodes
Liquid Barcodes
Liquid Barcodes