How can food-delivery brands retain customers after the lockdown boom?
With restaurants off-limits and access to supermarkets restricted, lockdown has created a spike in revenue for food-delivery and meal-kit brands. HelloFresh has just reported a 66 per cent rise in customers compared with last year. Farm- delivery services like Abel & Cole are struggling to keep up with demand. And many wholesale restaurant suppliers, including Nature’s Choice and HG Walter, have shifted focus to home deliveries.
However, it’s worth remembering that brands in this sector were facing headwinds before lockdown. A study by data analyst Second Measure revealed that 50 per cent of HelloFresh customers cancelled in the first month, 85 per cent by month six, and 90 per cent by month 12. Forbes predicted that by 2025, over half of all meal-kit companies would close. And, while box schemes may have proved a steadier proposition, they too will need an effective strategy if they’re to maintain momentum.
As the main reason behind this spike in growth is necessity, the question is: will these brands continue to thrive, long-term, when alternatives become available? If necessity and convenience become less important, and the novelty of parcels to our doors fades, it’s the brands with a purpose beyond the functional – whose customers ‘want’ rather than ‘need’ them – that will prevail. So, as the lockdown ‘need’ recedes, how do brands create stronger customer relationships?
1. Purpose beyond convenience
Research by communications company Edelman found that 64 per cent of consumers make belief-driven choices. Riverford has responsible sourcing at its core. Mindful Chef provides healthy, balanced meals. Allplants caters for planet- conscious vegans. Our branding for Natural Fitness Food conveys a mission to provide performance-focused food that also tastes delicious. Each of these brands has a specific purpose that chimes with its customers. These shared values build loyal and engaged communities. Compare, for example, the measured, forgiving complaints levelled at Riverford for mistakes in orders with the vitriol reserved for Deliveroo for minor delays in delivery. Brands need to find and articulate a broader purpose, because when all you are selling is function, be prepared to compete and be judged on that alone.
2. On a journey
Churn rate in the sector is high, so the brands that succeed will be those that generate long-term loyalty. One way to do this is by giving customers more than just stuff.
When Without were commissioned to create an e-commerce website for Caravan, one of London’s leading speciality coffee roasters, we knew seamless delivery and communication of a high-quality product were mandatory. But we also wanted to give customers something more than beans. So, we created a series of brew guides – short videos with a step by step timer that walk customers through different brewing methods. We knew it was important, long- term, for Caravan to be seen not just as sellers of coffee, but as specialists.
‘People are increasingly focused on long-term gain over instant satisfaction.’
Recipe boxes could offer similar, emphasising core skills and nutritional knowledge that provide customers with a deeper satisfaction than just a full belly. For adventurers, why not make it an exploration, with surprising ingredients and recipes? According to Mintel, people are increasingly focused on long-term gain over instant satisfaction. People want to grow, and the delivery brands that educate and empower will inspire loyalty. The journey can be unexpected, rewarding, stretching skills, knowledge and palate.
3. Ethical engines
The pros of delivery are convenience, new ideas, a treat. The negatives are the perceived ethics of big corporations, including zero-hours contracts and environmental impact. While meal kits claim to reduce food waste by delivering precise quantities of ingredients, this is typically traded off against a volume of (usually plastic) packaging.
Our rebrand of Sushi Daily shows that branding can unlock positive behaviour. By moving to an indigo colour – popular in Japan – rather than the uniform black of the category, packs not only feel more unique and authentic, but are now detectable by near infra-red light, making them compatible with UK recycling plants. This has encouraged the business to move 100% of packaging to recycled and recyclable plastic – becoming the first sushi brand to do so in the UK.
We all want stuff simply and easily but are increasingly aware of the impact. To resolve this modern dichotomy, consumers are investing their conscience with progressive brands. Brands who can take our need for nice things and invest it somewhere sustainable will be in a stronger position.
4. Make it easy
We come full circle. While bigger players with slick technology platforms need to invest in human purpose and desire, the smaller operators, who have customer good-will in spades, will nonetheless need to up their technology game to tick the convenience box.
“By creating a simple online shop as part of his new branded website, we helped generate six-figure gift sales in the first two months of launch.”
British Chef Marcus Wareing has three much-loved restaurants – owing to his two Michellin stars and for being both a recognised presenter of MasterChef the Professionals and mentor to the industry. During our branding work with him, we discovered that dining gift sales were largely dependent on word-of-mouth in his restaurants. By creating a simple online shop as part of his new branded website, we helped generate six-figure gift sales in the first two months of launch. When online convenience becomes the norm, brands need to be match-fit.
The lockdown has provided opportunities for many in this sector. But brands need to embrace this strange hiatus wisely; they may have our exclusive attention for a limited time. Function and convenience are today’s mandatories. Investing in and communicating a broader purpose will secure tomorrow.
Philip Koh, co-founder and strategy director, Without