Deliveroo:The “Grow With The Customer” Business Innovation

In doing business of buying and selling goods, transportation is always a key to success. Aside from product quality and after sales services, accurate and punctual along with safe delivery (intactness of goods)are all happy-customer impetuses that induce repeated purchases. Still, a matching customer-centric business partner that brings mutual support and win-win results for all parties involved– the so-called ‘grow with the customer’ approach – are scant. Should operators opt for business partners with conditional procedures, be they in the area of man power, resources or cash flow, such that business growth beyond the existing scope is hampered, that would be a worrisome matter for all stakeholders. A competent business partner needs not only to be able to adequately handle the existing operations but also have the capacity to sustain a future increase in work load to ensure sustainable business growth. These are factors any business operator has to take into consideration as well as trade off in carefully selecting each logistics service provider. Deliveroo, for instance, is a brilliant operator whose business model perfectly responds to its partners’ or allies’ growth and is worth keeping a watchful eye on due to the steady upward trend of future demand.

An online-based British delivery service provider, Deliveroo does not handle general goods as one might think.The company delivers food only, scrumptious meals from over 750 exquisite diners and bistros in England, the Netherlands, France, Germany, Belgium, Ireland, Spain, Italy, Dubai, Australia, Singapore and Hong Kong. The founder, William Shu, and CTO Greg Orlowski launched the business in February 2013. Today, Deliveroo operates with more than 300 employees together with a fleet of over 5,000 couriers providing service using either bikes or scooters. Yes, you read it right – 5,000 to date and going strong!!

What tells Deliveroo apart from rivals in the same line of business such as Just Eat or Hungry House is, firstly, a clearly defined business objective. Deliveroo’s delivery service is focused on meals from premium restaurants whereby its business partners are renowned restaurants like the Nando’s, BusabaEathai, Gourmet Burger Kitchen, etc. Indeed, they must not accept take home or to-go orders. (Targeted Customer).

Secondly, Deliveroo utilizes a delivery fleet that professionally reflects or conveys hands-on self-experience to ensure consistent quality service whereby turnaround time is set at 32 minutes per order on average.  This is because William Shu had personally conducted a site survey on all related delivery routes before the business launch (by himself delivering hot pizzas), thereby studying, analyzing and designing the feasible business model with hands-on, in-depth insight. Last but not least, Deliveroo plays a key role in enabling its business partners/allies to locate and expand the market to new customer groups that favor in-house dining over eating out (in-house customer experience), which proves to have substantially increased its partners’ yearly sales.

Deliveroo derives its revenue from two sources. The first is delivery fee at a fixed rate, i.e.2.5 GBP per delivery imposed on end-customers while the second comes from commission fee that results from its partners’ business growth. This, of course, means that Deliveroo’s business survival has to depend on the number of items on the menu, the number of customers using its service as well as the number of partners/allies. Thus, the company restricts its service provision to hyper-zones, or urban areas in surroundings conducive to its business (so that it can control such factors as delivery time and weather conditions). As with any new business in the process of development, Deliveroo is regarded as a business innovation that is faced with and needs to overcome numerous challenges, be they in the area of transportation infrastructure building, capital investment in a fleet of vehicles and human resources, a survey on transportation networks or data analysis.

In addition, Deliveroo’s objective to grow with the customer (i.e. restaurants) serves as a major driving force behind continued growth. The same logic stands true for SCG Logistics which has just launched a new service:the “Next Day Nationwide” that delivers goods to your doorstep the next day. The service has been designed to handle business growth among customers in large industries as well as SME customers as it enables them to increase sales volume through small lot size orders with minimized lead time (which means faster delivery) as well as reduce cost incurred in inventory management (which means instant countrywide delivery), an effective response to customer’s business requirements. Having in-depth insight into customer needs is thus the key factor if the business is to achieve sustainable growth and prosperity.


Compiled by BLOG.SCGLogistics
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