We get to talk a lot with delivery organizations that are being formed literally as we speak. Most of them are driven by the same goal: to become a local Alternative Delivery Platform (ADP) and compete with global Third-Party Delivery Platforms (3PDPs). Why do so?
While global platforms such as Uber Eats, Wolt, Deliveroo, Delivery Hero, DoorDash, Glovo, and the like provide great experiences for consumers, local business communities have mixed feelings about partnering with those giants. From all over the world we hear concerned voices of restaurant owners afraid to be turned into commodity and replaced by dark kitchens run by platforms. We hear couriers who have to fight to be treated differently. Amid these public discussions and debates that take place in the media (and sometimes in the court!), many businesses wonder how they might move the confrontation to the market. How could they join efforts and create alternative platforms that would be owned and operated by local players according to their own rules?
In our meetings, we talk about how to get started with this alternative platform. Tech companies make the business look relatively easy – click a button and in 20 minutes your food magically arrives. In reality, this type of operation is very complex.
On-demand logistics are hard enough, to begin with, even if you only do the deliveries part. Restaurant food cannot really wait, so the challenge is to assign an order to the right courier so that they will be able to make it to both the restaurant and the consumer in a timely manner. Not easy! When you pair this with a consumer-facing component (and this is what you need to do to become like Uber, Wolt, etc) it becomes at least twice as challenging. Now you suddenly have to worry not only about getting the food and goods to people but about getting the people to get the food and goods from your app. As simple as it may sound – it is a real challenge.
Challenging is not undoable, however, especially when you have no other choice but succeed. So, for those who are just getting started, we compiled our bite-sized checklist of how to begin this process.
The list is actually only three items long:
As trivial as it may sound, if we look at these items through the prism of the type of business that we need to start, things become very interesting.
You will be running a delivery marketplace. The words delivery and marketplace are particularly important. Marketplace means that you will always have to deal with two sides: supply – your merchants (restaurants and stores) that will be selling their products need to be taken care of and happy. And demand – consumers, who have to be buying from them, again, and again and again. Delivery means that there is a physical component of an otherwise digital business. Whenever physical and digital meet complexity arises. But not only we are moving into the physical world, we add more people to the process – we add couriers – who become an essential part of the value chain and who also need to be taken care of.
With all of this in mind, your initial team has to have the following expertise:
1. Digital marketing & sales to consumers - B2C experience starting with branding, digital (!) marketing of an app, understanding of how promotion and retention work.
2. Business development, sales, and partnerships – B2B expertise to be able to oversee bringing in new merchants on the platform – restaurants, supermarkets, local grocers and retaining them there too.
3. Logistics – an operational experience in managing delivery business, including riders/drivers/couriers, supervision, training, dispatching. This usually comes with a responsibility for the tech stack and software vendors' selection.
The rest of the functions include general management, finance, and other administrative operations that are not delivery marketplace specific. The three listed above, however, are the cornerstones for your business's success.
Technology for a delivery marketplace is tricky too, for the same exact reason – there is supply, there is demand, and there is a physical component of actual human being moving an actual food or product between the seller and the buyer. Technology can come as one all-integrated piece (this is an example of what we do) or as several interconnected solutions (we know businesses that use Tookan + Yolo or Zuppler + Onfleet). While the choice is yours, you should make sure that you get all the aspects needed to run your business. Here they are:
1. Multi-merchant consumer ordering app (and ideally web). A marketplace type of app is not the same as an app for a single store or a restaurant, so it is important to keep that in mind when vetting solutions. The app should support different promo types, basic account activities, and an ability to buy from a store not just a restaurant.
2. Marketplace admin portal. This is one of the most important parts of the software that should come together with the consumer app and allow you to manage all merchants, all orders, to give promotions, refunds, etc.
3. Merchant portal. A tool for your merchants to manage their menu or store items, locations, business hours, give promotions and accept orders. These should come with the modules above and should be simple to work with, otherwise they will be taking too much of your time to manage them
4. Logistics engine. A dashboard that allows you to accept orders, dispatch them, build routes for couriers and manage your employees. Depending on your choice of software vendor it can be either a separate piece integrated with your ordering interfaces or a part of the same platform (in our case it is an integral part of the Marketplace admin).
5. Courier app. An app for your delivery drivers or riders to accept orders and delivery them, which is a part of the logistics engine.
6. PSP – payment service provider, this would usually be a separate vendor and a separate agreement, depending on your region.
Community is critical for your success. Most likely you are launching in the market where at least one of the delivery tech giants already operates. This means you would have to compete with a company that can afford crazy promotions and can even work at a loss. You cannot and should not choose this path. The way to compete could be to engage with your community and make sure they are loyal to you. A loyal community might pass on discounts or sometimes wait a little longer knowing that in exchange they help local businesses. You don't need to wait until you have a brand name, an app, or a marketing person to go out, initiate the conversation, and bring the community on board with your idea!
1. Engage with local business owners – go to restaurants and stores that you want to see on your platform and tell them about your idea. Ask what they expect from you. Ask how could they help. Ask them to spread the word! Make the platform theirs too, so that it's a local movement, not just a business.
2. Engage with potential customers. Tell your story to your neighbor, chat with your local market, ask your restaurant and other merchant partners to spread the word - a simple contact form would do the trick here.
3. Engage with delivery riders and drivers. They are super important for your success. Work out fair agreements with them and treat them as partners from the get-go.