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When do we eat? Food ordering platform strategies

When do we eat? Food ordering platform strategies Food ordering apps have registered phenomenal growth during the pandemic and will continue to register high growth in the years to come. This paper has three objectives: first, to differentiate between the sales funnel of traditional vs platform businesses; second, to understand the sales funnel optimization strategies of a leading food ordering app in India; and third, to draw lessons from these strategies to enable food ordering apps in particular, and platform businesses in general to achieve the goals of customer acquisition and retention in a highly competitive market.Design/methodology/approachThe study is based on interviews conducted with company officials of two leading food delivery platforms in India, and a rich qualitative analysis of secondary data sources including news reports, government policies, reports and statistics from global consultancy firms. The interviews were analyzed to understand various stages of the sales funnel for the food ordering apps and the strategies implemented by the companies based on their understanding of the customer journey.FindingsThe findings of the study reveal that the sales funnel of a food ordering platform can be divided into three stages – top of the funnel (ToFu), middle of the funnel (MoFu) and bottom of the funnel. In the ToFu stage, the goal of the food ordering app is to create awareness about their brand and induce app download, which results in customer acquisition. In the MoFu stage, the food ordering app initiates personalized promotion strategies to trigger maximum orders via the app. The customer is then targeted for retention and referrals. Customer app navigation and order data are the most crucial inputs for navigating the sales funnel effectively.Research limitations/implicationsFirst, app-based service firms, especially food ordering platforms, can understand how the digital sales funnel can be optimized to generate an appropriate customer mix. Second, they need to understand various interventions at different stages of the sales funnel to move the customer from the app download to loyalty. Third, the food ordering platforms and app-based service firms need to understand how to use customer data to design customer relationship management strategies that can convert retention into referral strategies to expand the funnel.Practical implicationsIncumbents in the intensely competitive food ordering industry need to understand the process of customer acquisition and retention. An understanding of the digital sales funnel can enable them to achieve the right mix of customers in their fold. Other companies that offer app-based services can also understand various stages of the digital sales funnel, and how customers can be moved from one stage to the next one by planning appropriate interventions using app data.Originality/valueThe research contributes by offering clear insights on how food delivery platforms in India acquire and retain customers through an understanding of the digital sales funnel. The paper also offers insights on the interventions that are adopted by such firms to move customers from one stage of the sales funnel to the next one. The paper clearly brings out the value of the 3Rs for a food ordering platform – revenue, retention and referral. http://www.deepdyve.com/assets/images/DeepDyve-Logo-lg.png Journal of Business Strategy Emerald Publishing

When do we eat? Food ordering platform strategies

N., Meenakshi
Journal of Business Strategy , Volume 44 (3): 9 – Apr 14, 2023
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References (8)

Publisher
Emerald Publishing
Copyright
© Emerald Publishing Limited
ISSN
0275-6668
eISSN
0275-6668
DOI
10.1108/jbs-11-2021-0187
Publisher site
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Abstract

Food ordering apps have registered phenomenal growth during the pandemic and will continue to register high growth in the years to come. This paper has three objectives: first, to differentiate between the sales funnel of traditional vs platform businesses; second, to understand the sales funnel optimization strategies of a leading food ordering app in India; and third, to draw lessons from these strategies to enable food ordering apps in particular, and platform businesses in general to achieve the goals of customer acquisition and retention in a highly competitive market.Design/methodology/approachThe study is based on interviews conducted with company officials of two leading food delivery platforms in India, and a rich qualitative analysis of secondary data sources including news reports, government policies, reports and statistics from global consultancy firms. The interviews were analyzed to understand various stages of the sales funnel for the food ordering apps and the strategies implemented by the companies based on their understanding of the customer journey.FindingsThe findings of the study reveal that the sales funnel of a food ordering platform can be divided into three stages – top of the funnel (ToFu), middle of the funnel (MoFu) and bottom of the funnel. In the ToFu stage, the goal of the food ordering app is to create awareness about their brand and induce app download, which results in customer acquisition. In the MoFu stage, the food ordering app initiates personalized promotion strategies to trigger maximum orders via the app. The customer is then targeted for retention and referrals. Customer app navigation and order data are the most crucial inputs for navigating the sales funnel effectively.Research limitations/implicationsFirst, app-based service firms, especially food ordering platforms, can understand how the digital sales funnel can be optimized to generate an appropriate customer mix. Second, they need to understand various interventions at different stages of the sales funnel to move the customer from the app download to loyalty. Third, the food ordering platforms and app-based service firms need to understand how to use customer data to design customer relationship management strategies that can convert retention into referral strategies to expand the funnel.Practical implicationsIncumbents in the intensely competitive food ordering industry need to understand the process of customer acquisition and retention. An understanding of the digital sales funnel can enable them to achieve the right mix of customers in their fold. Other companies that offer app-based services can also understand various stages of the digital sales funnel, and how customers can be moved from one stage to the next one by planning appropriate interventions using app data.Originality/valueThe research contributes by offering clear insights on how food delivery platforms in India acquire and retain customers through an understanding of the digital sales funnel. The paper also offers insights on the interventions that are adopted by such firms to move customers from one stage of the sales funnel to the next one. The paper clearly brings out the value of the 3Rs for a food ordering platform – revenue, retention and referral.

Journal

Journal of Business Strategy – Emerald Publishing

Published: Apr 14, 2023

Keywords: Digital platform; Digital business; App-based service; Food delivering platform; Food ordering app; Platform business; Sales funnel; Swiggy; Uber Eats; Zomato

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