Plan Now to Meet Increasing Demand for Delivery
2020 was an unusual year, and its impact will influence customer behaviors well into 2021 and beyond.
From our vantage point as a last-mile delivery company, we saw overall delivery volumes grow by 200%, though these differed by industry and sector. For example, flowers and gifts decreased in March but then escalated as the pandemic went on past the summer, perhaps when customers realized they wanted to send a thoughtful gift rather than appear in person. Desserts and novelties were most popular in the middle of the year. Unsurprisingly, grocery delivery increased early and continued to grow throughout the year, but not as much as restaurant delivery growth, which has remained at higher levels than ever seen before 2020.
With 2021 just days away, now's the time to think ahead for your business. Here’s what to expect in the coming year:
It’s now clear that COVID-19 will continue to impact the economy next year, and that includes consumer habits.
The digital economy was already growing, but the pandemic further accelerated it across the market. For restaurants, digital is driving off-premise orders. Since the pandemic, online ordering has increased more than 25%!
In 2021, delivery demand will continue to increase as more and more businesses develop their own delivery capabilities, and delivery will no longer be a differentiator that helps businesses stand out, but instead an expectation.
Customers don’t go to restaurants merely for food; they pay for presentation, atmosphere, and experience. As delivery accelerates, expect leaders in every industry to find ways to satisfy their customers with a high-quality delivery experience.
Just as leading chefs are thinking about how to deliver a premium meal, the successful retailers in every area will find innovative ways to deliver a unique experience. Hospitality companies are experts in this. Smart ones will translate this into customer touchpoints associated with delivery.
What Delivery Model is Right for Your Restaurant?
RTN releases its Native Delivery TCO Calculator to the industry, a smart spreadsheet packed with precise formulas for evaluating Native Delivery vs. Delivery as a Service (Daas) vs. Third-Party Delivery. In this special on-demand video discussion, see how it works, and get your own copy of the Native Delivery TCO Calculator, so you can crunch your own numbers to better understand which model(s) may work best for your restaurants.
- Main Street will Revitalize
Historically, delivery was the domain of big players. Times have changed, with customers now realizing that e-commerce juggernauts like Amazon don’t do everything well. As more small and medium-sized businesses take on their own delivery solutions, expect a customer shift toward smaller shops.
Consumers already appreciate the uniqueness, personal connection, and specialization of a boutique over a global chain. As they’re increasingly able to purchase delivery from these options, expect to see a rise in customized products, personalized offerings, and artisanal brands. These offerings aren’t merely limited to monogrammed handbags or hand-tailored dresses; even large home goods or appliances like printers are seeing this shift. Next year, expect specialty retailers to make their mark.
In 2020, e-commerce delivery volumes boomed. Customers wanted to stay safe during the pandemic while still eating, drinking, and mimicking their favorite social activities. Food businesses are a perfect example of how these habits are here to stay.
In 2021, customers will order more delivery than ever before. Now that customers are comfortable with delivery, expect them to increase their frequency across industries. Once someone’s already ordering food twice a week, it’s only a small psychological shift to start ordering three times. And once customers are familiar with ordering delivery in general, expect them to start ordering in new areas too.
In food delivery, this will lead to businesses optimized for delivery, like combo kitchens or non-traditional preparation spaces like ghost kitchens and dark kitchens. In other areas, too, retailers will adjust, leaning toward low-rent options such as micro fulfillment centers that emphasize deliverability over storefront.
Subscriptions instill loyalty in customers, increasing the likelihood they purchase again. These models both increase efficiency and create reliable revenue. Since a small percentage of customers typically drive a large percentage of sales, the successful businesses in 2021 will create new business models that increasingly revolve around delivery subscriptions.
Successful hospitality companies will realize that delivery isn’t merely a choice between on-demand, subscription, or scheduled; instead, your optimal offering depends on your customer and product. If you find the combination that works for you, you’ll create happy--and profitable--customer habits.
To make the most of your 2021, make sure you:
- Create a unique, high-quality delivery experience. Successful companies will be the ones that delight their customers and double down on their unique brand. Hospitality companies can translate their experience to earn loyal customers in this manner.
- Turn delivery into a customer habit. Delivery subscriptions and loyalty rewards can make a customer’s repeat business easier, more satisfying, and more reliable.
The end of 2021 will probably look a lot different from the beginning! Most customers look forward to treating themselves after 2020’s events, and the hospitality industry will experience growth and interest as society reopens safely.
About the Author
Khaled Naim is the CEO & Co-Founder of Onfleet. Naim grew up in London and Dubai, where he met fellow co-founder Mikel Cármenes Cavia in high school. He went on to study Computer Engineering at the University of Michigan. He founded Onfleet while pursuing his MBA at Stanford in 2012 with his two co-founders, Cavia and David Vetrano. He lives in San Francisco with his wife and enjoys frolicking in Blackrock Desert once a year, watching anything narrated by David Attenborough, and traveling to the furthest corners of the world - especially if there’s a beach.