7 Food Delivery Industry Trends for 2017

7 Food Delivery Industry Trends for 2017

The culture of food delivery and ordering online is evolving at an impossibly fast rate. Once common behaviour, the weekly shop at the supermarket or the rare treat of a weekend takeaway have now transformed beyond recognition.

Takeaway cyclists are the new black cab, supermarket delivery vans adorn every corner, and ordering food at the touch of a button has never been easier.

So. What’s next?

1. More consumers will order food online and at a higher frequency

This trend might not be a surprising one, but it’s one we expect nonetheless.

2016 data from CGA Peach shows that more than half the British adult population have had a takeaway brought to their door in the last six months, equating to approximately 28.6 million people. Moreover, 1 in 5 Brits (19%) get a food delivery at least weekly and 2 in 5 Brits (39%) get one at least monthly.

These figures show the astronomical scale of the food delivery market and the opportunity at stake for companies. Ordering online has become so normalised and easy for consumers that we only expect the growth and frequency of those using food delivery to increase.

2. Technology will continue to propel the industry forward

Dominos brand image

Technology is the lifeblood of every industry, and with modern users’ digital expectations, alongside fierce competition in the food delivery industry; new and creative use of technology is the only way to succeed.

From Domino’s branded robot named “Dom” and its digital transformation through “thinking like a technology company”, "thinking like a technology company"to growing industry investment in mobile apps and seamless UX; technology is the common denominator.

2017 will undoubtedly feature more innovations through technology that help brands, old and new, push the industry further forward. As Beth Daniel of Tech City News writes, “tech will continue to be the driver of change in the food delivery space.”

3. We’ll see more variations on the common delivery model

Monster pet supplies image

As soon as a cool new trend comes onto the scene, others naturally want to get in on the action. When the ridesharing app Uber, for example, began to build in popularity a few years ago, new players soon got involved across the globe like Lyft, Gett, Ola Cabs, Hailo and more.

We’ve already seen this competition build dramatically in the food delivery space, with companies like Deliveroo, Just Eat, Hungry House, Amazon Fresh, Hello Fresh and more competing aggressively with each other.

We expect this competition to continue across 2017, though maybe at not so dramatic a pace. But there will certainly be more variations on a theme – i.e. companies and brands finding new niches within the industry.

Monster Pet Supplies has launched what it claims is the UK’s very first pet food delivery app, for example. While American Express is challenging the traditional restaurant concept with its pop-up communal space, Take In, where diners order out but sit in.

4. In-house and third party delivery services will compete fiercely

The rise of third party delivery services like Deliveroo and UberEATS has undoubtedly disrupted the food delivery space, in the same way Uber and Airbnb have shaken up the traditional business models of taxi firms and hotels.

On the one hand, many suggest that full-service restaurants (those that enable people to eat at their premises) have been heavily and negatively hit by the growth of these third party providers, prompting certain commentators to believe that “foodservice outlets are now at the mercy of third party delivery companies”."foodservice outlets are now at the mercy of third party delivery companies"

However, others argue that certain third party services are actually supporting full-service restaurants. Take UberEATS for example – this is allowing restaurants to offer online home delivery services that they otherwise may not have been able to. 2015 saw a 118% growth in home delivery sales for full-service restaurants, and we expect this percentage to grow even higher in the next few years.

We also expect more and more restaurants to fight back by developing their own in-house delivery businesses to reduce reliance on third party usage for boosting sales. If this trend grows as significantly as we predict, then third party delivery services may need to rethink how they can continue to offer value to consumers above full service restaurants’ in-house teams.

5. Delivery droids and other AI solutions will be tested and rolled out

Delivery droids image

2017 will see more food delivery brands look to AI solutions and automation strategies to streamline processes and UX.

Last year, as an example, Just Eat partnered with Starship Technologies to test slow moving pavement droids that can travel up to 4 mph for roughly 10 miles to deliver food, and use a GPS signal and cameras to navigate and avoid obstacles. When the food arrives at the destination, customers simply input a code. David Buttress, Chief Executive of Just Eat, explains that "in busy times there's a shortage of supply drivers […] these [delivery droids] will enable restaurants to meet the demand."

This is just one example of a brand finding ways to make the delivery process as smooth and painless as possible.

6. The food delivery online market share will grow exponentially

In 2016, the online UK food and grocery market share sat at £10.5bn. By 2021, this figure is predicted to grow to £17.6bn.This estimation from IGD gives us a good indication of how the food delivery market share could continue to impact the online space.

As Ve Interactive’s Head of Digital, Tom Clark, asserts,

"It’s been exciting to watch the online food delivery industry grow as quickly as it has and to see how brands have adapted their business model in increasingly creative, customer-grabbing ways. With high-profile competitors entering the UK market and strong contenders acquiring others, I fully expect the online market share to continue to rapidly grow throughout 2017."

7. The most effective delivery brands will harness data and champion UX

It’s no longer enough to just have a great product and a decent strategy. To succeed and to achieve longevity in the industry, delivery brands need to harness all the data at their disposal and make UX a priority, not a bonus.

This is exactly something we have learnt in the technology industry, developing Ve’s consumer-centric onsite engagement solution, Digital Assistant. By prioritising UX, we are able to offer helpful and unobtrusive messaging to website visitors, guiding them to what they want to find and where they want to go – in the process boosting website conversions. All by ensuring that we put the experience of the user first.

Making data-driven decisions when it comes to strategy and putting the user above all else; these are the elements that will help a good food delivery brand become a great one.

What do you think the future holds for the food delivery industry? Let us know in the comments below.

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Posted by Ellie Hubble

Ellie is a Content Manager and spends her time reading, writing and getting excited about all things UX, digital and technology.