Direct delivery or Co-exist? How top brands perceive delivery as channel

The second surge of the pandemic has worst affected the F&B industry, which was on the verge of recovery post-November. The brands that could continue their operations slowly planned their financial and business strategies to manage past losses and the continuity for the next financial year. However, the periodical changes in the state's law on operations, the timings, the delivery & pick up only rules, led to inconsistency in overall planning.

It all began post the first wave when a tussle started between restaurant aggregator platform Zomato, Swiggy and restaurant owners over deep discounting, heavy commissions etc. NRAI that represent restaurant fraternity at large started #OrderDirect movement earlier this to boycott these delivery platforms and encourage direct delivery from restaurants. As per the industry body these platforms were emerging as digital landlords trying to control the entire ecosystem rather than being a neutral platform where buyers and sellers transact on their own terms.  They also partnered with Thrive Now and DotPe to give a robust yet friendly tech support.

Also Read: What will happen to delivery when covid is gone

As per a report by McKinsey, speed of delivery is the biggest variable in customer satisfaction, with an average 60 percent of consumers across markets citing it as a key factor. The optimal wait time is no more than 60 minutes.

Brands like Impresario, Food Matters, KA Hospitality to name a few are actively promoting and encouraging customers to order direct. These brands have also partnered with Mumbai Dabbawalas to deliver food to the customers. But there’s no denying that many top brands like Yum! Brands that owns KFC, Pizza Hut chains and McDonald’s agree that it’s all about co-existing. For them, delivery is an important part of the business and around 60-70 per cent of delivery business is dependent on these aggregator platforms. 

And, at a time when F&B brands are planning to build their own in-house delivery capabilities and use various tools to develop own ordering channels, as a prolonged wave of covid casts uncertainty business for the food services industry, many are in fact relying on these aggregator platforms to better target the right customers.

“All restaurants, sooner or later, will be moving away from aggregators. There are two reasons for that – the  commissions that they charge and the fact they use divide and rule policy - divide the restaurants by using discounts and rule them after they get trapped,” said Karan Kabu, Owner, Light House Café by pointing that direct delivery initiative will be a slow yet mandatory process that we all have to follow eventually. The general public will have to be educated through social media and otherwise that they need to stop using aggregators   and place their orders through Google, lnstagram or even direct calling.

For most of the brands who are doing direct delivery, approx 20 to 30 percent orders they do are direct and there’s no necessary for them to create their own fleet when brands like Dunzo,Wefast and Shadowfax.

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