I’ve spent a bit of time in the Food Marketplace niche the result being it’s an area which holds my interest. Recently things have got even more exciting with lots of change – things are heating up! Long gone are the glory days of seemingly never-ending rounds of investor funding to fuel growth. Crazy spending on market-share capturing campaigns are likely a thing of the past. Except for UberEats, a relative newcomer to the space who seems to have deep pockets at least for now. Multiple Players are advertising for a new Heads’ of Marketing as they seek to find a magic marketing formula. I am seeing the same in the catering niche.
Growth is great, but growth that can’t eventually be turned into profits is a trajectory to insolvency. Food Marketplaces are now looking to find a way to profitability or to exit the space. Delivery Hero has been divesting itself of its non-profitable websites. Foodora left Australia’s shores in August 2018, and in Germany this month Delivery Hero’s German assets were bought out by their rival Takeaway.com. Delivery Hero is yet to exit the German Catering Marketplace niche – but with that niche being just as competitive, with fewer profits up for grabs… their exit there might not be far off either.
With all this action I decided to make a new series of Videos analysing the marketing strategies of one of the mid-sized players in this niche – Deliveroo. I’ve made 3 videos taking a quick look at their:-
- Adwords Campaigns
- Backlinks and Keywords
- User experience, Onpage SEO factors and their sitemap/link juice funneling strategy.
In the future, I may also look at their.
- Offline Marketing
- Mobile Strategy
- Social Strategy
- The ordering experience from Deliveroo. NB. Ultimately, this will likely prove more important than any other factor.
I hope the videos prove entertaining and insightful.
What to take from these videos?
Getting the marketing mix rights is important, but not less important than ensuring each campaign is executed efficiently. Where your offering is little different to the competition’s…. better make sure your spend every dollar efficiently. Bringing your business to the attention of potential customers is only half the story. You need to keep them coming back. Marketing can only go so far towards ensuring this.
If at the end of the day your offering proves to be not as good as the oppositions? Well… you can build it… they will come… but they may not come back. Simply throwing more marketing $$$ at a customer base that has already decided they are better off doing buying elsewhere? You can’t expect to win people back just by shouting louder and more often that you are great. Without lots of customers… how will you keep your restaurants onboard? Lose restaurants.. and your customers get even more unhappy and the spiral begins.
For a Food Delivery Marketplace to succeed, the marketing, product and customer success teams need to be closely aligned.
I think we will see further consolidation with the Food Delivery Marketplace niche in the next year. Marketing strategy will play a part in this but not the whole part. The marketplace with the best overall offering is going to see the most amount of restaurants and people using and sticking with their platform.
The Marketplace which has:-
- The best ordering experience, web, and app.
- The largest inventory of restaurants, and the best, fastest system for adding menu items.
- The best-priced offering.
- The most reliable delivery service.
- A strategy to rewoo fickle customers, who have likely at some point had a bad experience.
- The most efficient performance marketing combined with the highest rankings and thus the lowest online marketing costs.
is going to come out on top.
Wow. Talk about predicting the future.
- Deliveroo, short on cash, unable to compete, has now got funding from Amazon.
- In my video I made it clear they were not competitive in Germany, having a substandard website, a struggling performance and organic digital marketing strategy and a small inventory….. and now… they’ve bailed. Goodbye Germany.
I thought with the money from Amazon they might try and right their German ship… but instead they have chosen to run back to a safe harbour.
I still think they will lose this battle of consolidation. Their offering is simply not as good as the competitions and instead of fixing their offering…. they are fuddling around with trying to strengthen their brand.
Food delivery is a commodity. Make it cheap, on time, easy, with lots of options and ensure the experience is good more often than not. Stunts, PR and pink helicopters? Are not even a small bandaid when your offering is just not as good in this niche.
No-seat kitchens are going to be what Netflix was to cinemas just by the by. More on that, another time.