Food delivery apps
Tom Dougherty, CEO – Stealing Share
8 July 2019
Food delivery apps make branding even more important
Unless you live in a rural area, I’m imaging you’re learning the convenience of food delivery apps like DoorDash, Grubhub and Uber Eats. It may say something unpleasant about our society today that the use of those apps is growing.
But hell, I’ve used them as well. And I’m not the only one. A recent study reports a 21% increase in the use of food delivery apps from the year before. And the trend is expected to continue until nearly a quarter of all smartphone users order from one of those apps in just a few years.
(I use DoorDash, the market leader, occasionally. Because its system is easier and, at least in Greensboro NC, it holds more options.)
But the rise of those food delivery apps got me thinking. Where are they stealing market share from? That is, if ordering through apps is on the rise, there has to be an opposite reduction somewhere else.
Eating at the restaurants? Sure. Making dinner at home? Probably. But a little digging came up with the answer, and it’s an obvious one.
The apps are stealing market share from pizza delivery.
“All brands can learn something from this. When a trend in your category increases, that means a different trend is decreasing. Meanwhile, that just leaves you with the most important path to increasing sales, food delivery apps or not. Making your brand meaningful.”
Food delivery apps give consumers more options
For years, the large pizza chains have depended on delivery for their growth. And pizza was one of the few fast food categories that actually delivered. Few consumers, if any, go into a Pizza Hut or a Domino’s. In fact, fewer of those dine-in locations even exist.
Pizza sales as a whole are flattening out, and food delivery apps represent just one of the reasons why. A few brands are seeing sales droop, resulting in Pizza Hut’s ridiculous rebrand of using its old logo with an old theme that means nothing.
You see the changes within fast food giant Yum Brands, an investor in Grubhub. Delivery sales for its Taco Bell and KFC brands are increasing because of the food delivery apps. Which is, when you think about it, a no-brainer because they didn’t even have delivery before. Of course, these apps would increase sales.
But it’s coming at the expense of Yum’s Pizza Hut, which is seeing delivery sales drop. In response, because Yum Brands is part owner of GrubHub, the app is working to highlight Pizza Hut more openly.
All brands can learn something from this. When a trend in your category increases, that means a different trend is decreasing. Meanwhile, that just leaves you with the most important path to increasing sales, food delivery apps or not.
Making your brand meaningful.
If Pizza Hut’s brand were more important to consumers, it wouldn’t matter the delivery system of choice. In fact, the apps make it more important because consumers have greater choice. For brands like Pizza Hut, the food delivery apps just gives consumers another reason to ignore it if you have meaningless brand.
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