Does anyone need to cook from scratch anymore? Last week in New York, some friends invited me to their apartment for dinner – that’s quite rare since most people living in Manhattan seem to eat out. The hosts proudly told us that the food would soon be delivered by Maple – a new food concept combining the best chefs in NYC, high quality ingredients and rotating daily menus, delivered to you by their own drivers. They own the whole process, from the ordering online or on mobile all the way through to delivery.
During dinner, someone raised an important question: if, when ordering takeaway, her chicken arrived undercooked from one of her favourite restaurants, who would be responsible? Was it the original merchant, the restaurant providing the meal, or the delivery app she had ordered it through? The issue is not just one of customer satisfaction, but of brand association – with which company the product will be connected. In the broader context of convenience culture, this begs the question: who owns the customer experience in the new age of last mile services?
Delivered meals account for 7% share of American food spending, with 26% of customers ordering delivery or takeaways at least once a week. In the UK, takeaway numbers reached a staggering $10.5 billion in 2015. Food for delivery is evolving at a rapid rate and the days of associating delivery mostly with pizza and unhealthy takeaway is fading as it is now becoming possible to have the same quality of food as in any restaurant.
Have we reached the stage of digital restaurants?
An expectation of convenience is dominating spending habits. As a result, a glut of ‘last mile’ businesses, often tech start-ups offering door-to-door delivery services, have been gaining traction in the on-demand space, finding favour with the liberal funds of intoxicated investors. The last mile represents the coveted final stage of the customer journey. Whilst a business like Just Eat or Deliveroo sets out with a singular solution to modern living – restaurant quality meals on demand – expediency-hungry consumers can also access apps ranging from Laundrapp, which offers door-to-door laundy services, to Quiqup, which promise to delivery literally anything within the hour.
These delivery and click-and-collect ventures are really logistics businesses. It is estimated that in the last year the burgeoning sector attracted around US$17.8bn in venture capital, and whilst the fervour seems to be dying down a little, William Shu, Deliveroo’s 36 year old founder, makes a pertinent entrepreneurial observation: ‘Every time you make somebody’s life easier and it is really an elegant experience, that person is going to be converted’.
Merchants who make their products and services available via last mile apps instantly gain access to a much wider audience of customers. Deliveroo, for example, says that its busiest day is Sundays – traditionally the quietest day for restaurants. However, a fascinating account in Bloomberg on the role of the maître d’ recently reminded me just how important service is to the industry – particularly at the premium end. So how can restaurants and other merchants balance the benefits of the last mile industry with protecting their own brand and maintaining a direct link with their customers?
‘Every time you make somebody’s life easier and it is really an elegant experience, that person is going to be converted’ – William Shu, Deliveroo founder and CEO
An alternative, of course, is to create a business model offering equivalent convenience, but owned end-to-end, like Maple. That is exactly what new London-based Italian food delivery company Godo, which delivers to homes and offices alike, has set out to do. Godo challenges its competitors by suffusing its whole value chain with distinct, stylish, brand ownership – Michelin-starred Chef Tommaso Arrigoni’s tubetti rigati is delivered not on a cheap, spluttering moped, but by an ‘ambassador’ in a bespoke Dainese uniform on a Vespa! Inevitably, though, the commitment to end-to-end ownership puts a limit on the speed at which it can scale. Deliveroo has been able to grow aggressively, now operating in more than 60 cities across Europe and Asia and offering a practically unlimited pool of potential customers to its partners. At the moment, Godo is confined to the City and Canary Wharf, though it plans to cover London by the end of the year before expanding internationally in cities like Paris, Milan and New York.
I caught up with Godo co-founder Amin, formerly of Citibank, who says that Godo is a digital restaurant which people will come to primarily because of the quality of the food, and secondly because of the convenience of the trusted delivery and service. His vision is to democratise the Michelin-starred industry – a starter is £4, mains are £8 and desserts are £3. Amin says: ‘We are combining food, beauty and technology and our aim is to be the first Michelin-starred digital restaurant in the world’. He says the trick is to make food that travels well and works for delivery (food is delivered in glass containers, which can be returned to them for reuse).
‘Our aim is to be the first Michelin-starred digital restaurant in the world’ – Amin Bouafsoun, Godo co-founder
For the consumer, the new age of last mile convenience is a boom. Merchants should embrace it as a way to reach new audiences as well as reaching existing customers more often. But they should also adopt a smart approach to the potential risks in brand awareness and reputation over the long term.
Now is the time to get it right: innovators continue to inch ahead, now looking to the ‘last metre’ as the next frontier of the customer journey. The days of plastic bags loaded with styrofoam boxes swinging from the bicycle handles of a deliveryman are waning, with the concept of delivery evolving to reflect the range of standards seen in restaurants.
Companies in all consumer-facing sectors should be prepared to take on the last mile competitive advantage with its accompanying challenge: stiffer-than-ever competition for brand recognition amongst consumers. For me, I can’t wait for Godo to reach NW1 – as its what we at The MBS Group want for lunch every day of the week!