Hunger for food delivery apps grows in 2022 against all odds
Food delivery is continuously evolving due to the changes in our everyday lives. In 2020, food delivery apps had explosive growth, propelled by the COVID-19 pandemic, as it allowed consumers to get their food delivered safely and conveniently. However, the material impacts of the pandemic have largely waned, and valuations of most food delivery apps have declined in 2022. The decline can be attributed to consumers returning to in-person dining at restaurants and coping with the surging cost of living. Despite the obvious challenges, there's room for food delivery apps to grow and increase revenue in 2023, as consumers are still largely attracted to the convenience. According to a recent survey, the average American makes nearly 55 food delivery orders yearly, which is once a week, spending a total of almost US$1850. Additionally, in Q3 2022, DoorDash, one of the top four food delivery companies in the U.S., reported a record-breaking number of orders, even with higher prices and rising inflation. The platform recorded 439 million orders in Q3 2022 and a 30% increase in gross order value.
2023 is only a few weeks away, and as consumers prepare to make new year's resolutions, food delivery apps must also adopt new and fresh strategies to stay afloat as a global recession is likely in the upcoming year. To help app marketers understand user behavior and prepare for next year, we've analyzed installs, sessions, and session lengths of food delivery apps. We've also focused on the growth in EMEA and North America.
Installs are higher than pre-pandemic levels
Global installs of food delivery apps were at an all-time high in 2021 but slowly declined throughout 2022. However, installs in 2022 were higher than both the pandemic and pre-pandemic levels. Compared to 2020, food delivery app installs in 2022 are 5% higher, and compared to 2019, they are up 34%.
Diving into regional data, EMEA's installs of food delivery apps grew 45% from 2020 to 2021. Installs have dropped in 2022; however, they were well above the pre-pandemic level, up 26% compared to 2019. Similarly, food delivery app installs in North America increased by 29% from 2020 to 2021. Installs in 2022 fell compared to 2021, but they are 52% higher than in 2019.
Users are hungrier than ever for food delivery
While global installs of food delivery are slightly down, sessions are impressively up. In 2021, global sessions of food delivery apps increased by 58% YoY, and have added another 3% on top of this in 2022. This suggests that food delivery apps have been able to retain and engage users they acquired during the pandemic's peak. Additionally, global sessions have seen tremendous growth in 2022 compared to 2019, posting a massive increase of 212%.
North America had the most significant growth in food delivery app sessions, posting a year-over-year increase of 77% in 2021 and another 20% in 2022. In EMEA, sessions of food delivery apps grew 48% from 2020 to 2021 and 3% from 2021 to October 2022. In North America and EMEA, food delivery apps have become fixtures in consumers' everyday lives, part of the “new norm”. Food delivery is more than a convenience, it allows users to customize their orders, benefit from customer rewards and loyalty programs, and easily track costs and food consumption.
Users spend more and more time on food delivery apps
Not only are sessions continuing to climb, session lengths are also up. The average global session length for food delivery apps in 2020 was 12.7 minutes, jumping to 14.7 minutes in 2021 and reaching a huge 16.07 minutes in 2022. Users are spending more time on food delivery apps each year, perhaps due to the growing number of choices on the apps and evolving eating habits.
Session lengths for food delivery apps in EMEA have also increased year-over-year since 2020, growing from 10.36 minutes to 11.25 minutes in 2021 and then reaching 11.74 minutes in 2022. Users in North America spent the most time on food delivery apps, spending an average of 16.33 minutes in 2020, which increased to 20.08 minutes in 2021 and 21.59 minutes in 2022. More time with users’ attention means more time to engage them with upselling, cross-promotion, and enticing loyalty and reward programs.
Grocery delivery face challenges in 2022
During the COVID-19 pandemic, users got the taste for ordering in and getting their groceries delivered to their doorsteps—the ‘10 minute grocery delivery’ was bolstered into enormous popularity. According to McKinsey and Company, in December 2019, the percentage of e-commerce grocery sales in the U.S. was slightly under 4%, and now it's expected to reach approximately 25% by 2030. However, now in the face of skyrocketing inflation, consumers are cutting grocery delivery from their budgets because of high delivery fees, service charges, and tips. In June 2022, Americans spent $2.5 billion on grocery delivery—down 26% from 2020. This also suggests that user habits have shifted from delivery to 'click-and-collect' or curbside pickup. For instance, Americans spent $3.4 billion on grocery pickup. In addition, a recent report from Morning Consult states that preferences for in-store grocery shopping remain high across the globe.
The shopping baskets in grocery delivery apps are also expected to shrink as consumers split their purchases across different apps based on their needs. McKinsey research shows that one-third of consumers who shop online weekly buy groceries from three or more grocery retailers. Online grocery offerings will likely become even more differentiated in the future, serving the specific needs of additional consumer segments. Consequently, grocery retailers could see a reduction in average order value. This means grocery delivery apps will have to continue testing new offerings, such as new creatives, messaging, and features, to attract and retain more users.
How you can take your food delivery app to the next level in 2023
While users are becoming more price-conscious, key trends suggest that they are not giving up on their love for food and grocery delivery. Here are some top ways you can utilize to acquire new users, boost customer retention, and increase revenue in 2023:
Invest in a customer loyalty program
User satisfaction is vital when it comes to the success of food delivery apps. However, most food delivery apps find building a loyal customer base challenging. According to a recent survey, 62% of U.S. consumers use between one to two food delivery services monthly, and another 20% use at least four. A loyalty program can help your food delivery app build brand awareness, save money on user acquisition, and boost engagement. One of the most common loyalty programs for food delivery apps is points redemption. Customers can accumulate points based on the amount they spend on the app. For example, one point can be collected each time a user spends $25.
Food delivery apps can also employ paid loyalty programs. Users can pay a membership fee and get access to special services, discounts, or exclusive opportunities, which, in turn, allows apps to identify the most engaged customers. A successful paid loyalty program also helps get a rapid return on investment (ROI).
Mix it up with game elements
Along with customer loyalty programs, adding gamification techniques can also enhance the user experience on food delivery apps. You can incentivize new user engagement from the moment the user downloads your app, including onboarding rewards, promo codes for signing up, social media sharing, and referral bonuses.
Food delivery apps can incorporate innovative trivia, quizzes, and other methods to incentivise engagement and drive LTV. You can also leverage data points gained to customize your product and provide a more user-focused, personalized experience.
Measure performance with app analytics
Access to nuanced, detailed customer data can differentiate your food delivery app from competitors. For a food delivery app to be successful, users need to be engaged over time—they need to keep coming back to make orders. To ensure a high frequency of loyal users, it’s essential to understand how they interact with your app at every step in the user journey. You can utilize app analytics solutions like Adjust mobile app attribution to better understand your users at every step from install to conversion, including pain points, churn points, and the perfect moments to push for conversion. It provides complete user-level visibility with uninterrupted user lifecycle tracking as soon as users interact with your ads. Marketers can track in-app events such as sign-up, customer user ID, entering promo code, first purchase, subscription or upgrade to premium, and more. You can use this data to create highly targeted audiences and segments, then build acquisition and remarketing campaigns to increase engagement with the most active and valuable users and continue driving them to your app. For example, a group might place an order but never complete the purchase. In this case, you can send push notifications to remind the user to complete their purchase and even offer a promo code to make it more enticing.
Food delivery apps often work with multi-channel campaigns, meaning they have several data sources, from social media advertising to programmatic ad networks. That's why food delivery apps can leverage solutions like Adjust's Datascape to view and analyze what is working and what isn't across all apps, campaigns, channels, and platforms in one place. This provides a detailed overview of granular data, empowering you to make fast and smart marketing decisions.
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