Meals on mobile: The state of Food Delivery apps in 2019
Senior Content Manager
Nov 18, 2019
From app users to app reviewers, and from investors to entrepreneurs, everyone has an appetite for Food Delivery apps. The worldwide restaurant industry could be worth $1 trillion by 2023, according to Bernstein, a brokerage. Its mouthwatering growth is matched only by consumers’ growing interest in apps that remove the friction from getting a delicious meal delivered to their home.
With less time, and less inclination to cook, people look elsewhere to get their food quickly and cheaply. Food Delivery apps serve the needs of consumers who, on average, eat three meals per day. As a result, apps have proliferated, and Adjust data counts 85 million installs of Food Delivery across 36 countries in the last six months alone.
Hungry for more
Everybody eats. But app user retention for Food Delivery apps is relatively low. On Day 1, Food delivery apps average at 12.5% retention. By Day 30, this figure has dropped to 4%. Across ten major food delivery markets, Turkish users retain best on Day 1 (15%). Meanwhile, Korean users retain the longest, with 5% of users still opening the app on Day 30.
Low retention shouldn’t come as a surprise — after all, not many people have a reason to open their Food delivery apps every day. More choice, innovation, and eating habits that differ by region, are also key factors that could reduce the need for food delivery.
Data from agency Zion & Zion indicates that 48% of users only order once or twice in a 90 day period, with only 7% ordering 11 times or more in the same timeframe. As a consequence, app marketers in the category are much more focused on in-app purchase rates and improving them. Retargeting is a way to achieve that, reaching users at the right time to capitalize on hungry users who have shown they are willing to spend. There are many methods that can help, but re-engagement comes after the install, where the real feeding frenzy is taking place.
The primary differentiator between success and failure? Stickiness. According to global consultancy McKinsey & Company, “once customers sign up, 80% never or rarely leave for another platform.” This creates a “winner-take-all dynamic,” and with it a tough environment to convince users to switch. This is why much of the market is pushing to consolidation.
Once you’ve got the user, it’s imperative to drive re-engagement through timely activity. If the highest activity days are Friday through Sunday evening, that’s the time to do your best retargeting. Be sure you populate your campaign with offers that appeal directly to the customer to inspire an order.
Meals that appeal will have to be personalized to clinch the deal — with further convenience top of mind for app developers. Leveraging more data to deliver food efficiently, and giving the customer suggestions on what they most likely want, will drive the future of food delivery forward.