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Your next sneak peek at our 2020 predictions: Profitable delivery

Your next sneak peek at our 2020 predictions: Profitable delivery

In 2020, the delivery market will step up a gear with the entry of new technology providers, committed to driving profitability.

Your next sneak peek at our 2020 predictions: Profitable delivery

To read this chapter of our industry trends report in full, download the paper here.

Delivery is hardly a new trend. According to the NPD Group, the UK foodservice delivery market will reach £6.3bn by 2021; delivery spend in 2018 rose £1.35bn compared to 2015. Meanwhile, MCA’s Foodservice Delivery Report in 2018 said food delivery contributed to 8 percent of the foodservice market and that 60 percent of UK adults order, on average, twice each month.

What will change in 2020 is the size of the technology ecosystem. We know companies like UberEATS and Deliveroo disrupted the market, but the reality is that managing everything under one roof has failed, so far, to prove profitable. Now, new technology and service companies are beginning to make their mark. As these come together to form separate, expert, pieces of an integrated delivery ecosystem, there will be real opportunities to affect that reality. Together with digital ordering they will help operators offer a step-up in convenience and find a profitable delivery solution for the time starved modern consumer.

One area of growth for delivery is hardware. The hiring and management of delivery staff is expensive, as is well documented. To counter this, companies have been experimenting with alternative delivery methods, i.e drones. Already food service business, Ele.me, has approval for drone delivery in Shanghai, and in Australia, Google has approval to fly its Wing Aviation delivery robots. Should drones or robots receive approval in the UK, the expectation is that they will eventually cut costs for businesses and delivery times.

While improved transportation methods is one key to greater profitability, it isn’t the only trigger for market growth. Dark Kitchens are on the rise – we already support some at Preoday – and they are dependent on having a delivery function. These outlets minimise outgoings, indeed, Kitchen United, believes dark kitchens have cut its labour costs by as much as 80 percent. In a world where the overheads associated with running a bricks and mortar restaurant continue to rise, it is perhaps unsurprising that restaurant investors are moving their money into alternative, delivery-only, ventures.

Online ordering and food delivery, in its entirety, represents one of the most powerful drivers of consumer behaviour today: convenience. Whether it’s in retail and e-commerce or online ordering and delivery, it’s that yearning for immediacy that is entering every arena of our lives.

At Preoday we look forward to working with our partners to play a key role in 2020’s trend of profitable delivery.

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