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Deliveroo: Changing from platform to operator?

Deliveroo: Changing from platform to operator?

Deliveroo is beginning to make the move from platform to operator. Restaurant operators should keep a careful eye on this trend.

Deliveroo: Changing from platform to operator?

This article originally appeared as a LinkedIn article by our CEO, Nick Hucker.

We’re starting to see Deliveroo Editions provide its own brands of food to consumers as announced in May last year: for example Deliveroo Editions in Crouch End, London, lists six of its own brands offering food. When asked about the proliferation of brands, a Deliveroo spokesman told Propel Newsletter:

“We are proud our growth supports restaurants to reach new customers, boost sales and support innovation. Virtual brands are a great way of helping restaurants and chefs try new ideas and grow their businesses. To support this we have been trialling a number of virtual brands at our Editions site in Crouch End.”

Even when the original announcement was made, operators were speculating that this could be a sign of Deliveroo looking to become a restaurant brand in its own right. At Casual Dining last year, the MD of Pho, Mark Smith, said it was “common sense” for the company to launch its own delivery-only restaurant brand, taking advantage of its bank of customer data.

As reported by Big Hospitality, he said,

“If I was Deliveroo, I’d be looking at becoming an operator…so they [could] start to become a competitor of ours as well. They control the customer data. They know all the Vietnamese noodle customers who’ve ever ordered Deliveroo through us. Combine that with a dark kitchen and the data, that’s really powerful for them to start thinking about being an operator.”

If you would like to take a look at them, the Deliveroo Edition own-brand restaurants on offer at Crouch End are a variety of pizza restaurants and chicken shops: Cluckleberry Finn, Peach’s Fried Chicken, Wing It, Lower East Side, Nonna’s Square Pizzas and Knead Neopolitan.

Operators should watch out

It is clear that the company is starting to make the move from platform to operator, which will directly impact existing restaurant and takeaway businesses. Deliveroo is learning from the operators it has on its platform and is able to take that information and provide food to an already receptive market.

Data of all kinds is key nowadays in the food industry – what ingredients work well, the ideal price point, the right customer segments, etc. Building up this knowledge takes time for fledgling businesses and is one of the big barriers to success. Deliveroo is able to learn from the data of others, and provide a targeted food offering, without taking risks itself.

Operators should keep a careful eye on this trend and consider if they want to be one of the businesses Deliveroo learns from to make itself into a market-leading food operator, or whether they want to take back control from the aggregators with their own while-label platform.

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