Deliveroo has eyes on your snack habits

Emma Koehn
April 9, 2019
The Age
From ice-creams to juices or a packet of Pringles, delivery platform Deliveroo says its customers are comfortable getting a rider to deliver snacks well outside of meal times.
“If you look at some of the numbers last year, there was a 350 per cent growth year on year on [ordering] breakfasts. There’s a huge growth in different occasions,” country manager Levi Aron said.
A subscription deal is now looking to take advantage of these customers. Over the past week, Deliveroo has soft launched its ‘Plus’ program in Australia, offering meal deals and free delivery on all orders for $18.99 a month.
Delivery fees are typically between $3 and $6 on the platform, meaning customers ordering multiple times a week may be encouraged to order more.
It’s a move the business said would help small businesses generate more orders and it comes at a time when restaurants are increasingly ambivalent about the cuts that food delivery platforms take for facilitating a delivery.
Some businesses have publicly rallied customers to avoid ordering food through third party sites altogether in order to protect small business margins. Deliveroo said the number of small businesses contacting it had accelerated. Last year it gave restaurants the option to “BYO riders” instead of relying on its gig economy fleet.
While the company doesn’t outline order volumes, Mr Aron claimed the company just had “our biggest Sunday ever”, with 20,000 customers having taken up Plus subscriptions over the past few days during the soft launch period.
The typical Deliveroo customer has changed over the past four years, the company said. When it launched in 2014, users were logging on maybe a couple of times a month to get a special dinner.
These days it’s more like a couple of times a week at least, with everything from juices to teas and desserts being placed as standalone orders.
In Melbourne’s CBD, a user can order one Taiwanese fruit tea for $6.40, to their office. In Sydney, many cafes offer $11 breakfast eggs to your door.
Deliveroo has increasingly positioned itself as a 24/7 food option and now has two ‘dark kitchen’ food preparation sites in Melbourne.
The company is gunning to have 17,000 restaurants on its platform by the end of 2019 and has positioned this latest program as a win for increasing order volume and deliveries for drivers, who get paid $9 per delivery.
Deliveroo launched its plus service in the UK earlier this year. It is the only food delivery platform offering a subscriber model so far Australia, though competitors do offer promotional deals and vouchers to users throughout the year.
The company isn’t ruling out the possibility that other platforms will follow suit in the “competitive landscape” of food delivery.
While the subscription only covers delivery fees rather than food orders at this stage, Mr Aron said the program would likely evolve over time with “a whole lot of different initiatives and campaigns”.
Locked in to convenience
The subscription model looks to drive loyalty, said lecturer in marketing at the University of Tasmania and retail expert, Louise Grimmer.
“Once a consumer is ‘locked in’ with a regular payment, this behaviour cements their relationship with the retailer or food provider,” she said.
Food delivery platforms are considering the subscriptions model much in the same way that Amazon’s Prime subscription drives loyalty, Ms Grimmer said.
The flow-on effects of being locked in to these subscription offers could well be a willingness to place delivery orders for lower value goods, she said.
“We are already seeing more and more people subscribing for a range of household products such as grooming products, toilet paper and coffee pods and it makes sense that this will extend to food delivery.”