January 10, 2019
In this insight I explore how tech is disrupting the food delivery industry, restaurant typologies, how we eat, live, and so on. Underpinning all of this, is modern life’s greatest woe: our collective lack of time, and our undeniable need to... eat.
“The most precious resource we all have is time.” – Steve Jobs
The times they are A'changing
WORTH’s a Mac-office, so it seems fitting to begin with a quotation from the late co-founder of Apple Inc., particularly because no one appreciates time as much as someone staring down their own mortality.
Living a healthy, balanced life means (for most of us) spending quality time with our loved ones, eating well, exercise, and (if you’ve got it in you) a creative endeavour. In most major cities worldwide, this balanced lifestyle requires some kind of occupation, to which we surrender a sizeable portion of our waking hours in return for an income. If you’ve got a good one, and not too many financial obligations, some of this income is disposable and allows for discretionary spending to further enhance your quality of life. Nevertheless, we live in scarcity, and the more time or resources we apply to any one particular area, the less time or resources we have for others. It follows that we invest time and money in what we value, and that means constant juggling and prioritisation.
We can’t outsource exercise, nor can we successfully outsource quality time spent with our loved ones, and cutting out the creative endeavour, or the play time, can have a detrimental impact on mental health, which upsets the whole balance.
What’s left? Eating well. And to eat well, you need time.
According to a study conducted by the US National Library of Medicine, “spending less than 1 hour/day on food preparation was associated with significantly more money spent on food away from home and more frequent use of fast food restaurants compared to those who spent more time on food preparation” (Agarwal, Drewnowski, Monsivais, 2014).
At WORTH, we're pretty fond of ordering food online. Here's a snapshot of one of our infamous Fun Food Friday feasts.
With an increasing emphasis on health and wellness, and time pressures of modern life, coupled with advancements in technology, the market for online food ordering is rapidly expanding. Overall delivery sales in the US have increased by “51% from August 2017 to March 2018” (Recode, 2018).
In reality, delivery is not a new concept: it used to be that you ordered food directly from a restaurant, and said restaurant dispatched a delivery driver to your home with your meal--a one-dimensional arrangement.
However, aggregator applications (read more about aggregation theory here have changed the game by building on this historical model while “offering access to multiple restaurants through a single online portal. By logging in to the site or the app, consumers can quickly compare menus, prices, and reviews from peers. The aggregators collect a fixed margin of the order, which is paid by the restaurant, and the restaurant handles the actual delivery. There is no additional cost to the consumer” (Hirschberg, Rajko, Schumacher, Wrulich, 2016).
In an increasingly time-starved convenience-oriented culture, it’s no surprise that tech disruptors like Uber, first shaking things up in the mobility world in 2009 with peer-to-peer ride sharing, have ventured into the food delivery market. Although there are other players in the game, Uber Eats has rapidly outpaced its competitors to become “the fastest-growing meal delivery service in the U.S.” (Recode, 2018).
In her presentation at European Women in Tech this past November in Amsterdam, Charity Safford (Uber Eats’ General Manager of Central & Eastern Europe) shared that Uber Eats has only been in operation three years but has established itself in over forty countries, four hundred cities, and distributes the fair of over 150K restaurants to consumers worldwide (Safford, 2018).
What sorcery is this?
What’s Uber Eats doing to acquire this market share so effectively?
Maximising three-faceted market engagement and ensuring that their technology is impactful and incentivizing for their stakeholders.
Uber Eats makes ordering from multiple suppliers easy (useful for families with picky eaters, or large groups dining together), providing data and intelligence for restaurateurs (which in turn helps them increase their operational efficiency and profit in a failure-prone industry), and providing data and intelligence for delivery personnel to enhance both their earning potential, and mobility. This is useful for a younger generation of workers increasingly preferring flexible work that facilitates a safe, profitable, even portable (sometimes internationally) job.
- CUSTOMER INTERFACE Uber Eats, like other aggregate applications, offers access to multiple restaurants through a single online portal (Safford, 2018).
- RESTAURATEUR INTERFACE Uber Eats provides data and intelligence for restaurateurs to better understand their customers' preferences, unlocking their business potential (Safford, 2018).
- DELIVERY PERSONNEL INTERFACE Uber Eats facilitates mobility for the delivery personnel and allows them to work intelligently, helping to identify areas of greatest earning potential (Safford, 2018).
Something wicked this way comes
This technology can change the game for time-pressed parents, for restaurant entrepreneurs and for delivery personnel; however, there a few other far reaching opportunities:
1. Predicting demand, and food waste reduction.
In as much as restaurant owners are able to better predict their demand, and therefore generate greater profit, coinciding with this is intelligence provided by app data that facilitates more efficient food preparation and supply, which (hopefully) means less waste. This is serious business, when we consider that “for every meal eaten in a UK restaurant, nearly half a kilo of food is wasted - through preparation, spoilage, and what gets left behind on diners’ plates. Food waste costs UK restaurants around £682m per year, according to WRAP (Waste and Resources Action Programme)” (Bronte, 2017).
Hopefully, complementary innovative initiatives in the delivery ecosystem--such as reusable take-out container suppliers or incentives--will emerge in support.
2. Enhancing the restaurant business model.
Uber Eats has also invented its own native ad unit that allows restaurants run specials and pay for placement with Uber for consumers who order without a specific restaurant in mind (Techcrunch, 2018). It looks like this: restaurants give competitive discounts, more people use the app to take advantage of the discounts, restaurants receive a better ranking in the app, and sell more food.
Win-wins abound, but perhaps there is also an opportunity for the app to build in the social entrepreneurship features of other business models (like Toms’ Shoes buy one, give one… perhaps buy a meal, give a meal?).
3. Generating new spatial typologies.
Smart delivery apps have also begun to facilitate changes in physical restaurant design, and business models.
To respond to the increasing demand for online ordering, and to cater to it (because it’s been proven to profitable), physical restaurant design is responding in kind, in some cases separating the delivery / pick up functions from dining, as with Poke Perfect in Amsterdam. Its restaurant layout “also focuses on food delivery, and it’s made easy for the Deliveroo cyclists to pick up their orders” (TWO-O, 2018).
What’s more, we’ve seen the rise of the virtual, or 'ghost kitchen' -- a facility that exists for the sole purpose of generating delivery food for consumers, eliminating the sit-down experience entirely, and operating exclusively as a kitchen. This new spatial typology maximises space in costly city centres and reduces the traditional overhead involved in restaurant proprietorship (waitstaff, space, etc). Due to the rise in popularity in online food ordering in Canada, this “rapidly emerging business model” (Globe and Mail, 2018) has resulted in 50 ‘ghost kitchens’ in operation across the country in the last year (and counting).
The spin off from this is fascinating: from new spatial restaurant types, to 24-hour revolving restaurant operations sharing spaces, the field is green.
(Penner et al, 2012)
Is the magic gone?
All this might imply that culinary romance is giving way to convenience, but really, take out has always been take out. Ordering food via Uber Eats does not replace the unique gastronomic experience of a sit down meal in your favourite restaurant with your loved one(s); that remains the same. This is something different. Depending on where you live, you (and all members of your dining party) now have a smorgasbord of healthy options at your fingertips, a little more time on your hands, and restaurateurs, a mine-field of opportunity.
Want to change the way you do business online and need an innovation partner to help you do that? Drop us a line!