A new benchmark study of food delivery apps showed a lot of leaks between downloading and ordering.
The good news is, app usage is growing. Research firm NPD Group announced that six in 10 digital restaurant orders are now done through an app. According to another research firm, Allied Market Research, the global food delivery market is on track to hit $16.6 billion by 2023, a compound annual growth rate of 27.9 percent.
And of course, money is still pouring into the space as seen in the landmark deals covered here on Food On Demand. In all, VC investment in the space hit $4.4 billion and isn’t slowing down in 2019.
CleverTap’s Industry Benchmarks for Food Delivery Apps report said delivery apps both third-party and proprietary remain a competitive and tricky market. Getting users to complete the signup process is the first hurdle.
The report showed just 25 percent of users completed the signup process, a generally quick and efficient process with the one low barrier of adding a form of payment.
Of those that did complete the signup, just 22 percent remained active after the first week. That might be a disheartening stat for some app developers, but it shows that consumers are at least willing to experiment with food delivery apps. Alas, more than half (54 percent) uninstall the app within the first month.
The big scary stat from the report is around churn—users that jumped in, tried it out but never bothered to try again. According to the report, 86 percent of new users will stop using a food delivery app within two weeks of the first launch.
“Showing enough value to get a user to sign up is only the first challenge. You also need to incentivize users to use the app and perform repeat transactions ‘in-the-moment,’” said Almitra Karnik, global head of marketing at CleverTap in a press release announcing the report.
There were some positive statistics within the data, as well. More than a third (35 percent) of users order a meal at least once within the first month of installing an app. The average time to complete that first order is three days. Also, the average number of app launches per user in a month is 10, meaning users are eager to check things out on their delivery apps, even if they don’t complete an order.
CleverTap had a few tips for generating better app interactions. There’s the typical stuff like making sure the user interface is clear and intuitive, but it also has guidelines to boost interaction with push notifications—a key component of delivery apps and restaurant apps in general. For one, use emojis! The report found that including emojis grew engagement from the average of 1 percent to 1.45 percent. A nearly 50 percent boost from a taco icon? Easy enough.
To retain new users, CleverTap found that early engagement was critical for retention. For every 100 users, 77 drop off in the first week, so delivering an incredible experience in that short timeframe is very important.
Tackling the brutal churn rate, however, remains tricky. CleverTap suggested re-engaging those customers with promotional offers nearby, new menu items and new restaurants. That might get them back in the mix as their delivery market grows to give lapsed customers with what they really want.
Head over to CleverTap to see the full report.
