StackFood

7 Common Food Delivery Business Challenges & How To Solve Them

Being a seasoned chef for a few years, my friend Alex made his dream come true by starting his food delivery business. That’s when he first realized food delivery business challenges aren’t a piece of cake. But he survived this competitive market!

Want to know what common challenges he faced running a food delivery business and how he solved them? Well, keep reading as this blog shares all the secret sauce from challenges to solutions to sweeten your food delivery business journey.

Why Do Online Food Delivery Businesses Face Challenges?

A lot of factors make it hard for online food delivery businesses to grow in the market. Although online food delivery in India is projected to move upward, leaving South Korea and other dominating countries behind, the challenges still hang right above the businesses. 

The global online food delivery market is expected to reach US $1.65 trillion by 2027. That means more businesses will be launched, and challenges will get multiplied with the competition in the market. 

But if you know the “WHY” behind the challenges, you will be able to tackle them quickly and maturely. Let’s dive into the details of the why’s now- 

  • Lack of expertise in technology adoption: Choosing and implementing the right technology solution creates a huge difference between successful and unsuccessful businesses. So, if you are investing in a technology without a thorough understanding of business-specific needs and requirements, you may end up facing challenges after launching your business. 
  • Choosing the wrong partners: Before anything, you need to select a delivery logistics provider who clearly states their coverage limit and is transparent about the volume or quality standards they maintain. It’s not just your business; all your customers will suffer if the logistics provider’s service isn’t up to the mark. 
  • Missing precautions and actions before launching: Rushing into launching the business leads to overlooking key factors such as going through local regulations, analyzing competitors’ strategies, pricing strategies, or understanding customer-specific demand for specific business zones. 
  • Failure to prioritize customer experience: The business is for the customers. But if the customers face issues like poor website and app usability, limited payment options, or lack of real-time support, then the challenges are only going to increase. 
  • Ignoring scalability and flexibility:  As your business grows, the demand and customers will too. If you do not plan for scalability and flexibility, you may end up facing difficulties with increasing demand. 
  • Lack of continuous improvement mindset: If you as a business owner can’t adopt a mindset of continuous improvement and innovation it’s quite obvious to face challenges in the long run. Remember Nokia? The once-upon-a-time global leader in the telecom industry. The only mistake they made was not to keep pace with the changing times and technology. The results? Their competitors went ahead because they adopted a growth mindset and didn’t just sit in their comfort zone.

So, to run a food delivery business and cut off challenges as much as you can, it is not an option to have a growth mindset but a necessity.

Food Delivery Business Challenges & Solutions for the Online Restaurant Industry

Now comes the most awaited part. If you’re someone like Alex, who’s already in the industry, you have an idea of how much hard it is to keep your head above water. And if you’re someone new, you might want to test the waters. In both cases, you must know what are the delivery business challenges and how to solve them. 

Below, I’m listing the common challenges and the solutions so you may take precautions for your food delivery service: 

Challenge 1: Technological Integration 

Problem: The first and foremost problem that online food delivery business owners face is using a technology that doesn’t ensure a seamless service. Choosing the right technology is where people face the most challenges. Mostly, the problem arises when the chosen technology lacks essential features such as a powerful admin panel, restaurant panel, fast user websites, efficient order processing, and analytics tools with real-time data. 

Solution: The one and only solution is to invest wisely in technology for your problems with delivery services. While purchasing technology or software, make sure to check:

  • The system is packed with powerful panels and apps
  • Provides a fast user website for a smooth customer experience
  • Efficiently handles order processing and delivery logistics
  • Enhances interaction using customer relationship management tools
  • Report and up-to-date data analytics for valuable insights and informed decision-making
  • Updates from time to time for evolving customer demands and market trends 
  • Streamlines operational workflows for efficiency  

You can find many ready and complete solutions for your online food delivery services on CodeCanyon. But the magic lies in finding the best one out there. To save you time and effort, I have already done the hard part and found the ultimate technology that addresses all the issues. For that, you will have to keep scrolling till the end 🙂

Challenge 2: Payment Issues 

Problem: The food delivery sector faces challenges due to the platform’s shortfall of transparency and security. These are some of the top concerns of customers. If your food delivery business platform lacks information security, third-party payment system integration, multi-channel payment options, and vendor support for payment concerns, then the problem will lead to increased customer turnover rates. 

Solution: To manage issues regarding payment processing, you can keep these in mind: 

  • Implementing secure and reliable payment processing systems in the platform
  • Choosing a solution that supports multiple payment gateways with the possibility of integrating more as needed
  • Ensuring your platform safeguards sensitive customer data
  • Offering diverse payment methods like cash on delivery, digital payment, and offline payment

Challenge 3: Evolving Consumer Preferences

Problem: As people lean more towards meal delivery service platforms, their demands and preferences are changing day by day. The changes are mostly noticeable in certain cuisines, dietary preferences, and delivery options. Businesses struggle to find the exact needs of their consumers and thus lose a lot in the long run. 

Solution: Handling this situation requires a pair of eyes who get into the details of the reports and data. All you have to do is- 

  • Analyze data from food, restaurant, and customer reports to find trends and preferences
  • Adjust your business strategies based on the insights found from the data analysis
  • Update menu offerings and partner with restaurants to align with changing consumer preferences 
  • Ensure your delivery options are widely accepted by your consumers

Challenge 4: Customer Retention

Problem: In this highly competitive multi-vendor food delivery industry, retaining customers is the hardest part. It’s not just about offering tasty food and giving a lot of restaurant options but also about engaging with customers, building loyalty, and offering incentives to be competitive. 

Solution: One of the best ways to keep customers coming back to your business is to offer deals, rewards, and support. Here’s what you can do- 

  • Offer bonuses and coupons as incentives for customer loyalty
  • Reward customers with a wallet option for earning & purchasing with convenience 
  • Save customers time by using the repeating order option from order history
  • Provide help and support through live chat 
  • Other ways to retain customers: multiple payment options, multi-language, variety of cuisine and addon options, flexible order placement and delivery options, promotions, etc

Challenge 5: Food Quality Control

Problem: When a business partners with multiple restaurants and brings all of them to one platform to do online delivery business – that’s where it becomes hard to maintain consistent food quality. The cooking & preparation methods, ingredients, kitchen practices, and chefs are different for each partner restaurant. It becomes hard to monitor each and everyone on a daily or routine basis. 

Solution: The solution is simple – set quality standards for restaurants registering with your delivery business. And to ensure that you can –

  • Provide restaurant &  customer support channels for addressing quality issues
  • Offer refunds or replacements for orders that do not meet quality standards
  • Verify the restaurant details while registering to your platform
  • Analyze customer ratings and reviews on specific food and restaurant

Challenge 6: Inefficient Delivery Routing

Problem: Delivering food orders timely is one of the biggest yet most common challenges that businesses face. It may happen due to not implementing advanced routing algorithms to find the best route possible to deliver order. It creates issues like increased fuel costs for deliverymen and customer dissatisfaction. 

Solution: Delivery routing issues can be solved by – 

  • Using cutting-edge routing algorithms to optimize delivery routes
  • Real-time tracking system to monitor progress 
  • Pre-determine delivery charges and other costs for specific zones by accurately setting up zone locations.

Challenge 7: Competition from Bigger Players 

Problem: It’s difficult to establish a brand-new and trusted food delivery business because the existing giants are already ruling the industry. They’re already dominating the search engine rankings and consumer mindset. To compete with the bigger players, you need to work really, really hard. 

Solution: The problem may seem bigger, but with the right solution, it can vanish, too. Here’s what measures you can take against this challenge: 

  • Build a strong online presence through SEO, social media, and reviews from real customers
  • Have a growth mindset to adapt to changing market needs and act according to customers’ preferences
  • Highlight the brand’s unique value proposition through online and offline channels
  • Deliver excellent service, responsive support, and exclusive offers for building trust
  • Spend on marketing and digital identity creation. Tell your brand’s story that connects customers at the heart of your brand.

How StackFood Can Change Your Online Food Delivery Business

When we face challenges in our everyday life we always tend to seek expert advice. Why? Because of their depth of knowledge and expertise which help us with the problem we are facing. 

The same goes for your food delivery business challenges. Remember earlier I mentioned a technology that has the key to solving all the challenges? – I was gatekeeping StackFood!  

As StackFood is a full-stack multi restaurant food ordering and delivery solution. It comes with all the answers to your concerns.

How? Well, let’s take a look at the table below-

Food Delivery Business Challenges Solutions Provided by StackFood
Technological IntegrationLatest Technologies: Laravel, Flutter, React Laravel Web Panels: Admin, RestaurantFlutter Apps: User, Restaurant, DeliverymanFlutter and React Web Application3rd Party API IntegrationReal-Time Notifications 
Payment IssuesMultiple payment gateways: Stripe, PayPal, Paytm etcPartial payment optionDifferent payment methods – cash on delivery, digital payment, offline payment 
Evolving Consumer PreferencesDetailed and separate reports for food, restaurant & customersFlexible delivery options for customers ( Home delivery, Takeaway, Scheduled delivery, Subscription order, Instant order) 
Customer RetentionCampaign, Coupon and Banners Live chat and real time order tracking Wallet & loyalty points 
Food Quality ControlChat option with restaurant & customers to address quality issues promptly Customers’ feedback mapping
Inefficient Delivery RoutingAdvanced routing algorithmZone-based business setupReal-time tracking Zone-wise restaurants and deliverymen 
Competition from Bigger PlayersPages & social media integration 3rd party & configuration of SMS, mail, map, recaptcha & social login Admin landing & React landing page with customization option Diverse cuisine, addon & food setup option

Table: Solutions provided by StackFood to reduce food delivery business challenges

That’s not just it! There’s more. StackFood is the reason many businesses are seeing the face of success despite the challenges that come with delivery businesses. The order confirmation model is worth mentioning among all the unique offerings. 

StackFood ensures no order is canceled and food is delivered quickly with different order confirmation models – 

  • Restaurant – first order confirmation model
  • Deliveryman first order confirmation model
  • Manually assigned by admin

If you are curious about the details of this food delivery business order confirmation model, you can read here.

Final Words

Although being at a demanding stage, the food delivery businesses face challenges every other day. But keeping in mind a few solutions would put a business forward than the competitors. For that, it’s necessary to choose the right platform for the online food delivery business to smooth the journey ahead. Because if you get off on the wrong foot, it will just get in the wrong direction in your business. 

So choose the platform wisely and verify it by yourself. Or, choose the one that is already loved and used by many in the industry, like StackFood. Even if you have any queries about this solution, you will find the support team available to clear up any confusion. 

Thank you for reading till the end. See you in the next blog!

FAQs

How can food delivery businesses optimize their online presence to stand out?

Search Engine Optimization and Social Media Marketing are two effective ways for food delivery businesses to optimize their online presence to stand out.

What are the challenges of the online food delivery businesses?

Online food delivery businesses face challenges like competing with industry-leading rivals, promoting business, maintaining food quality, delivering on time, meeting customer expectations, and handling complex payment processing.

How can online food delivery businesses minimize order errors and cancellations?

Using an effective and proven order confirmation model like StackFood, where either the restaurant or deliveryman accepts the order first, and if that doesn’t happen, Admin has the control to assign the order manually to remove any order errors.

How do food delivery businesses manage fluctuating demand and order volumes?

Food delivery businesses manage fluctuating demand by analyzing trends and adjusting resources accordingly. They may increase staffing during busy times, optimize delivery routes, offer incentives to drivers, and use scalable systems to monitor and manage increased order volumes efficiently.