Deliveroo plan to expand to 100 new UK towns and cities. How can I win?
2020 saw a meteoric rise in delivery and the acceleration of the third party delivery use that in part saved Deliveroo from running out of cash. That and a £500million injection from Amazon. By then of 2020 Deliveroo had added 20,000 new businesses (units) to their offer and announced an expansion plan
So what does this mean and how can I win?
It’s certainly not straight forward because even great delivery businesses are going to feel the affects of so many new operators on the platform. Search a post code in central London today and as a customer you can be faced with 700 options. That’s not good news for operators relying on delivery as their main source of income. So in this thread lets look at the opportunities of entry into new locations.
When Deliveroo open new markets you have the chance to establish a reputation and build awareness that in other mature markets you’re gong to have to fight a lot harder for.
Be early, be great.
It’s simple to say but of course a lot harder to deliver. The answer is also nuanced by your style of operation and a lot of other factors that you’re going to find answers, resources and case studies for within the FODD. network. But if you have or can create a good relationship with your Deliveroo contacts then getting into a new market early can bring benefits. One of the benefits that Deliveroo (and other platforms) brings to a new market is their marketing muscle. All but the very largest of brands can match or get near the weight of marketing spend that the 3rd party platforms bring. So you want to be there, with them when they open up a new market. Speak with them and see if you can help with sampling or other activity to showcase your brand on the platform.
Be early, be great
Be great. So much to talk about and I’m sure this can mean different things to different operators and I’d welcome the debate. In all my experience I’d prefer to win on quality than price. Yes you can win on price but this is a race to the bottom with diminishing margins. Therefore to win on the quality of your overall offer is a high bar but it’s one worth achieving. And to help you the platforms put a lot of focus on presenting those great offers to their customers. Those metrics can result in sales advantages of over 30% compared with operators not at that level. So when entering a new market with the third party platform, be early, seek out marketing opportunities and put a huge focus on getting your KPI’s off to a great start.
Multiple sales channels
You’ll find this advice a lot through the platform and it’s one most businesses will want to consider. Whether delivery is your sole channel and you operate from cloud kitchens only or you operate a restaurant within a bustling city centre there are a number of ways to increase your delivery revenue. One area we believe will take-hold in 2021 and beyond, are pure-play cloud kitchen brands – those that are specifically built for commercial kitchens to operate but the recipes, ingredients and most importantly the brand, marketing & social are handled by the parent company. Adding multiple brands from an operator such as KBOX Global can add additional sales streams and day part coverage without too much complication.