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Nov 18, 2016

From Dubai: An American Perspective on Delivery Tech

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I was just at a conference in Dubai.  It was intended to be a global conference and, if you looked at the attendees, it pretty much was; especially from an American point of view.  The content was largely presented from an American perspective.  This was fine with me because I haven't been to an American conference in years and it was interesting to hear what the Americans are concerned about.

The Americans, like the Chinese, Canadians, Australians and various Europeans, are concerned about delivery apps and third party aggregation services.

Before I go further, I need to remind everyone that delivery is less than 10% of the traffic in any of the 13 markets we track with our CREST® foodservice market research. But, while these services are taking a part of something that is less than 10% of the market, they have grown from nothing with alarming speed. And, they have created services, like aggregation, that were unimagined just a few years ago. It feels like they could change everything.

The delivery aggregation services were likened to the hotel web sites that we business travelers love so much. Apparently, the hotels don't love them in the same way.  They, like the restaurants, lose contact with their customers. They lose the ability to make themselves stand out and they, to some degree, lose pricing control. Now, we just started asking about these services in a couple of countries; but, we are well aware of the alarm with which some companies view them.

We have, on the other hand, been asking about Internet ordering and generic mobile app usage for a year or more all around the world.  If I look at what CREST tells us about these services, it's easy to see why the Chinese and North Americans are so excited about this. In China, just shy of half of all delivery orders are through the Internet or an app.  In Canada and the US, the number is a little smaller than that. This is up from zero just a couple of years ago.

But these tools are not just delivery. They're used for pickup. And at the conference they said that the day will soon be upon us when we use an app on our personal device to order while sitting at a table in a restaurant. Perhaps that day is already here. My Millennial focus group thinks use of on-premises apps is pointless. OK, so maybe they think it'd be worth it for discounts or coupons. One, whose food is always late, thinks that perhaps it would be good for tracking her order. Another thinks that, combined with Go Pro cameras and a VR headset, it could be a path to an entirely new level of transparency.  My wife, a solid Boomer who is always up on things, has used an app-like device at Applebee's to speed up the service...but not a phone app. Maybe the on-premises app is something for Generation Alpha.  Watch this space.

NPD Group Chart | Food Delivery Tech

Source: The NPD Group/CREST®



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