The emergence of Covid-19 has broadened the spectrum of on-demand food delivery apps. Once considered a luxury, food home delivery has now entered mainstream. Almost everybody with access to the internet and a smartphone have ordered food online by using a food delivery app.
Food delivery apps like DoorDash have stepped up their operations due to the rising demand for online food ordering. While new entrants have appeared in the market, DoorDash remains one of the pioneers in the space of online food delivery apps. In this blog, we have covered the following:
Table of Contents
- What is DoorDash?
- Workflow of DoorDash
- How does DoorDash make money?
- Basic requirements to develop an on-demand food-delivery app like DoorDash
- Must-have features of an on-demand food delivery app
- Challenges to entering the mobilized food-delivery market
- Conclusion
What is DoorDash?
DoorDash is an on-demand food delivery app that allows consumers to order food online from partnered restaurants. Being a logistics company, it caters to the demand-supply of three audiences:
- Restaurant Merchants
- Customers
- Delivery Staff (Dashers)
Restaurant merchants sign-up on the platform to enhance their business revenue by selling their food online. When customers place their orders using the platform, the food is hand-delivered by the delivery staff, who are also known as dashers.
Workflow of DoorDash
- A restaurant offers food for online ordering
- Customers order their favorite food online and make payment
- For delivery, the platform connects with a dasher to provide the service
By facilitating door-to-door delivery, dashers earn via order pickup and delivery. Hence, DoorDash opens a gateway for local businesses to make a profit and empowers people by providing employment opportunities to them.
How Does DoorDash Make Money?
The business model of DoorDash explains that service is provided to both – restaurants and the people who want orders to be delivered. By offering its services to match the supply-demand, DoorDash earns via the following revenue streams:
Commission on each order
DoorDash charges a commission fee from restaurants on every order. The fee is usually 20% and is on the higher end as compared to its competitors – Delivery Hero (10%-11%), and GrubHub (13.5%).
The fact that DoorDash can charge a comparatively higher commission, indicates its market standing and influence over restaurants. The focus on delivering quality is what sets DoorDash ahead of its competitors.
Delivery Fees
On average, a commission of $5 to $8 is charged on every order that is placed on the platform. But it can vary depending on the distance to be traveled and the time of the day. Surge in pricing can be seen during peak hours of ordering.
Peak Pricing
Peak pricing is a surge in pricing, where customers pay an extra amount during a period of high demand. This means that delivery fees charged are higher during busier times of the day.
Marketing and Advertising
Since DoorDash is popular among restaurants, it charges extra for marketing and advertising on the platform. Restaurants pay an additional amount if they want to appear at the top of the search results, on the app.
Having learned about how DoorDash generates revenue, let’s have a look at the requirements of building an app like DoorDash.
What are the Basic Requirements to Develop an On-demand Food-delivery App Like DoorDash?
Developer Skills
Hiring developers who have prior experience in the field of custom mobile app development is pivotal. Their years of professional experience will lead to the building of a robust food delivery application. Having an application that is free from bugs and functional faults will eventually boost business revenue.
Server Requirements
For any delivery app, the server is a major component. It is used to save and process data as per generated requests. Having the requests served improves the efficiency and productivity of the application. For any food delivery app, it is important to identify and streamline the hosting that can be used with a minimum server requirement.
Listed below are the minimum server requirements:
- RAM – 512 MB
- Hard Drive Space – 5 GB
- Software such as PHP 5.4
- Database – MySQL 5.2 or higher
- Bandwidth can be determined as per traffic
Note: For other software requirements, it also comes down to the kind of food delivery application that is to be made, i.e. multi-restaurant or single-restaurant. DoorDash caters to multiple restaurants, so the server and database requirements are high for it.
Designers
A good UX/UI is the driving component to provide a seamless user experience.
interaction with different interface elements that the UI designers have created, determines the user experience.
UI designers are primarily tasked with the appearance of the user interface. UX designers on the other hand deal with how the user interface operates, i.e. the structure and the functionality of the interface. Having a good UX/UI of a food delivery app is important.
So, while creating your app, know that the interface should be both minimalistic and detailed. As the end-user experience will be determined by how the entire interface functions with each other, in an organized way. Having a team of skilled UI/UX designers on board will be pivotal.
App Testers
The ultimate goal of an on-demand food delivery app is user engagement. But, if the app is faulty and has bugs then the success of the application will be hindered. Testing the food delivery app allows testers to engage with the application as a user and assess the overall user experience.
App testers perform an in-depth analysis of app functionality. The applications must be tested considering the real-user conditions. The food delivery app testing can be done in two phases:
- Frontend/User Interface Testing: To check the components and the functionality of interface components.
- Backend Testing: To verify database behavior, app security, and the load on the application.
Further, a food delivery app can be tested in two ways:
- Manual Testing: In this, developers manually check specific features of the application during the development phase of the food delivery application.
- Automated Testing: Once the entire application is developed, testers evaluate the usability of the app from the end-users perspective. Automated test scenarios are conducted to evaluate the functionality and the performance of the application.
Marketing Tools
A food delivery app should be appealing to its users. If they feel connected emotionally, then their word of mouth will do wonders. The customer base will broaden enormously leading to an increase in sales.
However, there are a few marketing tools that aid in increased conversion. By using these tools, consumer behavior can be easily tracked for better marketing strategies.
Listed below, is a comprehensive list (category-wise) of different digital marketing tools. These are:
- Social Media Marketing Tools
- Email Marketing Tools
- SEO (Search Engine Optimization) tools
- Conversion Optimization Tools
- Push Notification Tools
Social Media Marketing Tools:
Social media is important to nurture and build business relationships along with creating brand awareness. Managing various social media platforms effectively is a skill to harness. Dedicated social media tools, allow publishing meaningful content. With their help posts can be scheduled for publishing, and data regarding customer engagement can be tracked.
Example: Hootsuite, Buffer
Email Marketing Tools
Emails are the most scalable marketing channels available in today’s time. From sending invites for a new event to coming up with splendid offers, email marketing offers staple solutions for marketing your food delivery app. From list building to improve deliverability, tools can break down consumer data for an enhanced approach towards meeting your business goals.
Example: Mailchimp, Mandrill
SEO Tools
Internet acceleration has made the digital landscape increasingly competitive, especially for on-demand food delivery applications. Increasing the search presence with the support of SEO tools can help you in uncovering a plethora of unexplored opportunities.
Users usually download an application from mobile app stores like Google Play Store or Apple App Store. But at times, applications can be discovered outside of these platforms too.
Using the right keywords helps your food delivery mobile application to rank higher in the search results. That being said, getting your mobile application discovered in search results is important for new customers, but it also helps in retargeting the existing ones.
Example: Mailchimp, Mandrill
Conversion Optimization Tools
Making your app alluring to the user is important. But by making certain changes like changing the color of a CTA, can make a huge difference in optimizing the bounce rate.
Among other digital marketing tools, having a conversion optimization tool can rope in undeciphered opportunities that can increase your revenue. Visitor clicks and customer behavior can be analyzed, using these tools.
Example: Optimizely, VWO
Push Notification Tools
Apart from the above-mentioned tools, push notifications, help users to keep up with the latest updates, offers, and events. A friendly and personalized touch can be added by using push notifications to draw users’ attention to your food delivery app.
Example: Airship, Parse
Apart from these marketing tools, partner with responsible delivery staff and restaurants that are clean, have faster food preparation time, good reviews, among others, to scale the success of your food delivery app.
Must-have Features for On-demand Food Delivery App
The success of any app depends on the features and functionalities it provides to the users. Listed below are the features that should be incorporated in a food delivery app.
Customer Version of On-Demand Food Delivery App
- Registration/Login
- Card Registration
- Automatic Payments
- Order Details
- Pick a source for the order (Shop or Restaurant)
- Delivery Location (Destination)
- Order History
- Ratings and reviews
Courier Version of the On-Demand Food Delivery App
- Booking the order
- Delivery Status
- Booking History
- Registration
Restaurant Version of the On-Demand Food Delivery App
- Admin Panel
- Order Placement
- Notifications
- Payment Menu
- Ratings
Challenges to Entering the Mobilized Food-Delivery Market
For any business, challenges are bound to come along. Still, if your food delivery app has been carefully built with the right set of features and functionalities, success will be achievable. Listed below are a few challenges, one might come across while entering the delivery market of food.
1. Sustainability and Scalability
For a food delivery app, it is important to adapt to changes in the environment. For instance, third-party APIs should work accurately post-integration so that the application is scalable.
The success of a food delivery application also depends on the framework of the application that primarily consists of the servers, database, UI/UX elements, and more.
It is also important to configure the process of the food delivery application and the target audience. If your app is unable to provide a user-friendly interface, then the users might switch to any of your application’s direct competitors.
2. Global Competition
The online food market is growing exponentially. As consumers are transitioning to online channels for food delivery, many entrepreneurs are capitalizing on the wave by launching their food delivery apps. But with new startups entering the online food delivery market, the competition has increased rapidly.
However, companies with big investments have the resources to capture the majority of the market, leading to the failure of startups. People also tend to trust established brands rather than give a chance to a fairly new entrant.
This is why it is important to conduct in-depth market research, and provide features and functionalities that differentiate your on-demand food delivery app from the rest. For example, making your food delivery app social media-friendly will accentuate it to the customers. They can choose and order trending food items in the restaurant world by using social media tools.
3. Partnerships with Restaurants and Couriers
It is better to knit a network of small restaurants beforehand, instead of waiting for a big brand. This will help with better negotiation and promote knowledge-based engagement. If the restaurants onboard don’t have a good reputation and are not able to provide standard food quality, then the users will hesitate in ordering from the platform.
Partnering with reliable delivery staff is also crucial, as it reduces order delivery errors and allows clients to focus on their core competencies. Enhanced food delivery also complements the organizational output as it facilitates cost saving. On the other hand, with a compromised delivery service, users can lose trust in your brand.
4. MVP Challenges
MVP stands for Minimum Viable Product. By creating an MVP, a basic version of your on-demand delivery app is built. The app developed will satisfy the needs of early users as it will be simple and functional. In the next step, feedback is gathered for improvements to the app.
MVP efficiently reduces the time and money needed. Instead of stuffing the app with unnecessary features that might take months to develop, the main goal of the app is served by incorporating minimum features.
However, there are a few challenges of MVP. These are:
- Failing to identify the needs of the target audience
- Hiring amateurs for development
- Choosing an improper project management methodology
- Choosing the wrong tech stack
Failing to identify the needs of the target audience
At the initial stage, when you have an idea of developing an on-demand delivery app, researching your target audience will help you better understand their needs. If your app fails to meet the requirements then the food delivery app will not be a success. Comprehensive research and improvisation as per user requirements are important to make your food delivery app successful.
Hiring amateurs for development
When it comes to developing an app for online food delivery, entrusting the task to amateurs can have dire consequences. It’s not only the money, effort, and time that you might lose, it’s also the trust of the users that will be at stake. If developers are not proficient and an app of low quality is built, then it might also affect your brand’s reputation. This is why it is advisable to partner with a reliable custom mobile app development company, which has skilled professionals for the development of your application.
Choosing an improper project management methodology
There are two popular methodologies of project management in the software development arena. One is ‘waterfall’ and the second is ‘agile’. The main difference lies in how frequently the product is going to be delivered to the users.
Waterfall works in a linear fashion, where going back to the previous phase is not allowed. There is a sequence of strictly defined development phases. One can only proceed to the next phase when the previous phase has been completed.
Like, you will not be able to change the design of a CTA button or test for bugs, till the entire functionality of the app is implemented. But on a brighter note, if a thorough description of the functionality is provided, then the understanding of the result is clear. This results in high development time, and what’s more, the need and the market for your app might have changed.
Agile development, on the other hand, is flexible. The development process is broken into short spans known as ‘iterations’. This leads to the delivery of the working app (or a functionality) after each iteration. Changes in requirements are handled smoothly. It also reduces the risk of app failure due to frequent communication between the developers and the entrepreneur.
However, agile development has its downside as well. Frequent iterations can increase the development time and can overshoot the app development cost. It also gets difficult to understand how the product will look in the end, due to the flexibility provided.
Choosing the wrong tech stack
Before commencing the food delivery app development, it is pivotal to choose the right technology stack. The tech stack insinuates the food delivery app’s overall weaknesses and strengths. Often, apps lagging are a result of the wrong choice of tech stack.
If you are not inclined towards technology, then the safest way is to partner with a leading mobile app development company. Their skilled professionals will assist in configuring the right tech stack for your app’s development.
Customer Retention
With changing demographics in the food industry, consumer needs are ever-evolving. Responding to the changing needs of the consumers is a big challenge. If the needs are unmet, then customer retention will be affected.
Like, if your food delivery application does not offer loyalty-based programs, or does not support multiple payment options, then the customers might switch to another app, that is modern and is equipped with the latest technology.
Conclusion
As customers are showing up in droves, platforms are scrambling to fulfill user demands. Capitalizing on a market that is ripe by getting an on-demand food delivery app developed, will boost business sales. As an entrepreneur, if you are looking to build an app like DoorDash, connect with a custom mobile app development company for the needed assistance.
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