Jimnotaris schreef op 11 april 2023 00:43:
www.adweek.com/brand-marketing/fast-f...Fast Food's Next Battleground: In-House Delivery
Data-hungry brands get creative about onboarding customers to their own apps
As players in the $222 billion food delivery market can attest, when customers with grumbling stomachs want food, they want it now. Breakfast from McDonald’s, coffee from Starbucks or a midnight meatball marinara sub? Name it, and it will be at your door in as little as 20 minutes.
Pre-pandemic, frictionless apps such as DoorDash, Uber Eats, Deliveroo and GrubHub were already on the rise, bolstered by a trend toward convenience from millennials and Gen Zers. And post-lockdown, business is still booming: According to research firm Grand View, the market will hit $505.5 billion by 2030, growing at an annual rate of 10.3% each year.
To satiate customers’ appetites, fast food chains have typically partnered with third-party apps to get hot food to doorsteps. However, now a fresh battleground is emerging as major chains take control over delivery themselves, pushing customers to order via their brands’ apps and platforms instead.
Some of this is cost-cutting, with chains looking to bypass the fees third-party platforms charge to access their delivery fleet. But there’s something bigger at play, too: Data-hungry advertisers, including McDonald’s and KFC, have spotted an opportunity to glean more insights and improve customer loyalty by delivering orders themselves.
Delivering the goods
In the U.K., KFC Delivery has just inked a lucrative deal with broadcaster Sky Sports to sponsor its top-flight live coverage around soccer, cricket and Formula 1.
The deal was “a huge step” for KFC’s delivery service that aligned with its long-term plan to make delivery “relevant to as many home occasions as possible,” said Sam Grindey, business director at media agency Mindshare, which is handling the planning for the contextual partnership.
KFC has been going all-in on its delivery proposition in the market for some time. In 2022, a TV and social World Cup campaign from Mother London pushed fans to order on the app via tongue-in-cheek executions celebrating the messy joy of eating at home.
McDonald’s, meanwhile, also promoted its McDelivery service heavily during the December Qatar tournament, which resulted in “double-digit” increases in delivery sales across its top 10 markets, according to CEO Chris Kempczinski. The app hosts its loyalty program, MyMcDonald’s Rewards, and now counts 50 million active users across its top six markets.
Other fast-food chains including Burger King, KFC and Costa Coffee have already baked loyalty into their official apps, incentivizing customers with points-based spending rewards and personalized discounts.
A new advertising battleground is emerging as they seek to encourage people to sign up. Domino’s, Burger King and others are entering the ring with promotions intended to drive direct delivery and pickup sales.
All about the data
Perhaps the biggest advantage of onboarding customers to their own apps: Brands can get a better understanding of their customers’ habits. “Data is one of the biggest reasons why fast-food brands want to promote their own apps over third-party delivery platforms,” said Matt Moorut, director analyst at Gartner.
With inflation increasing the cost of necessities, customers are cutting back and focusing on value. Fast-food brands have a huge opportunity to deliver this perceived value within their own walls, while observing transactional, behavioral and—in some instances—location data.
Meanwhile, said Moorut, brands are starting to realize they’re losing out by pointing diners to third-party apps, where customers are just a click away from competitors.
Instead, they want a direct line to fans, where they can mine first-party data. This will not only allow them to improve the customer experience in-app but also give them the potential to build look-alike audiences within the walled gardens of Facebook and Instagram.
Only time will tell what this means for the Ubers and GrubHubs of the world. However, most of the “in-house” delivery programs are being serviced and scaled by third-party infrastructure. Customers might order via McDelivery, but their Big Mac will still be delivered by a DoorDash or Uber Eats rider across 10,000 U.S. locations. The same goes for KFC, Panera and Taco Bell.
Moorut said restaurants setting up competing delivery programs obviously won’t help third-party apps’ growth ambitions, but it isn’t “terminal” for the third-party market.
“Third-party apps need to double down on what they do well, and improve the efficiency of anything they can,” he advised. “The business model works on razor-thin margins, which necessitates a clear focus on optimization to reduce costs to find profitability.”