Deliveroo’s 2017 was not without controversy. Like most app-based delivery services, there has been a fair amount of criticism around their business model. But Deliveroo’s recent innovative decision – to go from simply the delivery service for food to food producer as well – has seen it step away from market competitors and break the mobile app mould for fulfil consumer demands.
The Roobox is a delivery-only kitchen, where chefs work to produce some of the most popular foods that Deliveroo delivers. The idea behind the Roobox is to provide consumers with plentiful food choices in areas of high-demand but low supply. Some major food chains, such as Franco Manca pizza and Busaba Eathai are already involved.
Filling in the Blanks
Deliveroo’s Roobox is certainly a bold ecommerce move, shifting the company’s business model from transport only to production and transport. But there is an undeniable logic behind the change.
Delivery services like Deliveroo and Uber Eats have leveraged the incredible availability of digital technology to offer greater choice for their customers. This has led, in some cases, to restaurants being busy with takeaway orders while the brick-and-mortar, physical restaurant, does not hit even half capacity.
The Roobox addresses this quandary that restaurants are facing, with a cheap and affordable alternative. Deliveroo explained their rationale: “Traditionally, expanding a restaurant business comes at a significant risk and substantial cost. Owners would need to make substantial commitments to a new site and its development. RooBox frees restaurant owners of this, enabling them to test locations through a delivery-only offering while simultaneously growing their customer base, revenue and brand in a new area.”
Choices, choices, choices
An underlying lesson from Webloyalty’s Unfaithful Consumer Report was that digital technology has offered even more choices to the consumer, increasing competition between retailers and service providers, and reducing the loyalty of the already unfaithful consumer.
Businesses must be innovative to counter this trend, and the Roobox is an effective solution. Not only does the model provide consumers the chance to order food in low-choice areas, it also cuts overhead costs for the restaurant by providing kitchens, and strengthens Deliveroo’s market share across the country.
Consolidation
The Roobox very cleverly secures Deliveroo’s foundation in previously untappable geographic areas. In offering the Roobox, Deliveroo is effectively providing its own business by handling the acceptance and transport or orders and dealing with fulfilment. Roobox furthers the scope of choice for consumers through offering multiple-branded foods in a single order, previously uncharted territory.
If 2017 has taught us anything, it is that ecommerce needs to be innovative to expand and survive. Deliveroo’s approach guarantees their expansion and marks them out as the delivery app to beat.
Digital Retail Innovations Report
Take a look at the other 49 top innovations from the UK & Ireland in The Retail Insider Digital Retail Innovations report, it highlights some of the most interesting technological developments which are taking place in the retail sector.
