When was the last time you felt hangry?
Probably a few minutes before or right now.
Unlike a decade ago, it takes only a couple of minutes to get a hold of your favorite dishes – thanks to online food ordering apps.
Whether you have considered this idea before or not, online food delivery is a highly lucrative service, and the industry is estimated to hit US$136,431 million in 2020.
Even if you own a restaurant, developing an online food ordering app can extend your reach to a broader range of customers, process more orders than your physical location can possibly serve, and of course, enhance the return on investment (ROI) within a short time.
In this complete guide, we’ll discuss everything you need to know about building an online food ordering app and will break down each aspect of development into digestible nuggets.
Without further ado, let’s look at the working principles of an online food ordering system.
Online Food Ordering System: How It Works
Keeping the technicalities apart, the working of an online food ordering system is relatively simple.
It can be considered the digital version of calling up and ordering from your favorite restaurant minus the inconveniences of communication errors.
Before going into detail about the processes behind a food ordering system, you need to be explicit about its nature, intention, and revenue model – we’ll discuss more on that later.
You can either create a system specifically for a restaurant (like the Faasos or Domino’s app) or a third-party application (like Swiggy or Zomato) that will list multiple restaurants.
To keep the explanation of the processes more memorable and understandable, let’s consider the case of Kate, a hungry customer, eager to relish her favorite dish as soon as possible.
Step #1
Kate uses a food delivery app to access the menu of your restaurant or, in the case of a third-party application, the menus of available restaurants.
If not for hunger, she could have opened the app because of a convincing push notification.
Step #2
Kate browses the menu and decides on what she’ll be having today. She selects the quantity of each item – which is reflected in the food or checkout cart.
Kate browses the menu and decides on what she’ll be having today. She selects the quantity of each item – which is reflected in the food or checkout cart.
Step #3
Kate will have to specify her contact information and address in the checkout section or select from the previously entered list.
Before tapping on the “Order Now” button, Kate will be prompted to confirm her method of payment.
Payments can be made either through online methods or by the good old fashioned cash on delivery (COD) system. Once the payment mode is confirmed, Kate can place the order.
Step #4
Once Kate places the order, the restaurant receives the request via the admin or restaurant panel of the online ordering system. (editor: have not replaced with the suggestion ‘Once Kate places the order via the admin or restaurant panel of the online ordering system, the restaurant receives the request’ since it changes the meaning) They can accept or decline the order.
Once the order is confirmed (or rejected), the same is communicated to Kate, along with the estimated time of arrival.
Step #5
The restaurant prepares the order, addresses the special requests made by Kate (if any and feasible), and packs for delivery.
Step #6
The delivery service or staff is informed of the order delivery via the driver’s app. The restaurant hands over the packed food to the delivery personnel – who delivers it to Kate.
Step #7
Kate will rate the food delivered and the delivery personnel. If there are some issues regarding the quality or quantity, she can rely on customer support for a solution.
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What Can You Learn From Popular Food Delivery Services?
Knowing your competitors is as important as knowing yourself. Let’s look at the modus operandi of some of the big names in the online food delivery industry and try learning a thing or two to top their offerings.
Uber Eats
Uber Eats controls around 29% of the global food delivery market and is the most downloaded food delivery app in the world – meaning, it’s your biggest competitor.
Real-time GPS tracking, order scheduling, restaurant recommendations, and advanced filters are some of the many features of this app.
Swiggy
Swiggy tops the list of best online food delivery platforms of Indian origin and is available on the web, iOS, and Android.
Internal payment systems, real-time GPS tracking, order scheduling, no minimum order restrictions, and easy order cancellation are some notable features of Swiggy.
DoorDash
This on-demand food delivery startup functions in more than 4,000 cities in the US and Canada. It hosts more than 30 different cuisines with more than 310,000 restaurant menus
Real-time tracking, scheduled delivery, dual rating, top menu, and suggested list are some of the striking features of DoorDash.
Creating an Online Food Ordering System
Looking at the current market trends, it is evident that an online food ordering app will reap an exceptional return on investment (ROI). And the growing needs of such applications don’t show any sign of slowing down anytime soon.
Looking at the current market trends, it is evident that an online food ordering app will reap an exceptional return on investment (ROI). And the growing needs of such applications don’t show any sign of slowing down anytime soon.
Now, developing an online food ordering system is a piece of cake for our developers.
These seven steps will lead you through the process of creating an app that can overhaul the big names in the industry, and more importantly, will help you monetize and benefit from your customers’ needs.
Clearly Define Your Objectives
You’ll have multiple reasons to develop anonline food ordering app. You may want to expand your restaurant business and serve more customers. Of course, your loyal customers will appreciate the conveniences of online ordering.
Or, you may want to start a food delivery applike Zomato and bring in multiple restaurants online on a single platform.
To profit from the app, you can charge the restaurants for each order placed, display in-app ads, or both. As previously mentioned, the key is to bring in innovation to entice customers.
Choose the Food Delivery Model
The food delivery model is a critical part of on-demand food delivery app development process. It will directly affect the revenue models you can choose, which will decide how you can profit from the app.
Additionally, you need to select a model that will complement your core objectives. Generally, there are three food delivery models you can choose from. Let’s take a detailed look at each.
Delivery Model #1: The Order Only Model
The order only model was introduced and is used by the first generation food delivery services such as GrubHub, JustEat, Delivery.com, and Eat24.
In this model, the companies behind the applications are responsible only for ordering and managing the orders. This means the restaurants will be accountable for delivering the food orders.
The order only model can be considered as a digital replacement of the phone-ordering system and is ideal for restaurants striving to expand their customer base. Restaurants can either deliver through an employee or rely on a delivery service provider.
If you’re planning to develop an application revolving around this model, you can charge the restaurants anywhere between 7% to 15% of the order value for each order placed.
You can act as a facilitator between the restaurants and customers and never worry about cooking or delivering.
Delivery Model #2: The Order and Delivery Model
The majority of food delivery apps and food startups you see follow the order and delivery model. Uber Eats, Deliveroo, and DoorDash are all examples of apps following this model.
The principle behind these applications is simple – you’ll be responsible for ordering and delivering the food.
If you’re planning to build an on-demand food ordering that follows this model, your monetization strategy can include a commission, ranging from 25% to 30%, from the restaurants for each order placed.
To meet the logistics expenses, you can charge a flat-rate delivery fee or charge depending on the distance connecting the customer and the restaurant. As you’ll be listing multiple restaurants, spanning across numerous cuisines, you’ll never be short of orders.
Delivery Model #3: The Fully Integrated Model
In the fully integrated model, you’ll be responsible for ordering, cooking, and delivering. If you have a restaurant and the needed resources to expand, then this model is ideal.
Restaurant chains like Domino’s Pizza and Faasos follow this model. This food delivery model will also work for cloud kitchens, a new type of restaurant model that doesn’t provide in-house dining services and is only open to deliver food.
If you’re planning to build a food ordering system following the fully integrated model, do note that doing so would mean you’ll have to operate the kitchen, manage the orders, and organize the logistics.
This can significantly reduce the cost of operations as you no longer need to depend on third-party service providers.
Choose the Revenue Model
Once you are certain of the delivery model, you can choose the revenue model, which is essentially the monetization strategy of your application.
Here are some of the widely-used methods by which you can profit from delivery apps.
Delivery Charges
The delivery charges can be flat-rate or based on the distance between the customer and the restaurant. Uber Eats is also known to charge a service fee, which changes based on the order size and is generally 10% of the subtotal.
Revenue Sharing
Depending on the delivery model your app follows, you can charge a predefined commission rate for each order placed. You can also charge based on the size of the order.
In-App Ads and Promotions
Consumers find it okay to watch advertisements in return for using an app for free. As in-app ads are an extensively used app monetization model, you can incorporate it in your online ordering app to enhance its ROI.
Deals and Discounts
Deals and discounts drive the on-demand food ordering apps these days. The more deals you offer, the more customers you will retain. However, contrary to popular belief, giving out discounts doesn’t always harm your financial goals.
Instead, you can work with the restaurant to formulate daily deals at lower prices. As the number of orders increases, your revenue in commissions and delivery fees will also increase.
Get to Know Your Target Audience
Your target audience refers to the people who will be using your website or application to order food. Almost every food delivery app developer will request you to clearly define your target audience first before getting into design or development.
Your application’s UI/UX design must be significantly dependent on your target audience.
Similarly, defining your target audience is crucial for formulating your app marketing strategy. You can use demographic criteria such as age, gender, nationality, income status, and many others to draw a clearer picture of who your prospective customers are.
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Decide the Critical Features
The features you plan to incorporate will be significantly dependent on the delivery model you choose and has a profound impact on the food delivery app development cost.
- If you’re planning to develop an application following the order-only model, then you’ll have to manage three parts – the admin app, the restaurant app, and the customer app.
- If you’re planning to follow the order and delivery model, you’ll have to manage an additional part – the driver app.
- If you’re considering the fully integrated model, depending on your convenience, the admin and restaurant app can be merged into a single application.
Since deciding the core features is heavily critical, we have discussed it in detail in the next section.
However, you don’t have to develop a fully-fledged app to test your product hypothesis. Instead, consider a minimum viable product (MVP), which is essentially an application that contains the basic, yet essential features.
The cost of investment for developing an MVP app is nominal as compared to a full-fledged app. Interestingly enough, Uber, the parent company of Uber Eats, was an MVP in its initial days.
