Food Delivery Services Anticipate A Major Decline: Will They Sustain Customers Post-Pandemic?

With safety restrictions loosening and vaccine rates rising, many are looking forward to a return to normalcy. As we regain access to industries that many strayed from in the past year, we may also begin to see a shift in consumer behavior that reflects this newfound sense of freedom.

This is most evident in industries like travel and dining, with customers flocking back to restaurants and planning summer vacations after a year indoors. Many are highlighting the concept of revenge spending as the root cause of this economic surge, noting that it is reactively fulfilling months of pent-up demand. However, with so much discussion of industries rebounding, what about sectors that experienced a COVID-19 boom?  Will this sudden growth diminish once customers return to their normal routines?

Some early signs indicate that these increases will likely slow down — especially in the food delivery space. 

New research implies that food delivery services like Uber Eats and Doordash, which grew rapidly during the height of the pandemic, are anticipating a substantial hit upon cities reopening. 

This is not surprising, as the pandemic-incited growth was never expected to last forever, but it does represent the evolution of habits we may have once considered our ‘new normal’. The study states that the majority of the 122% growth the industry experienced last year was due to artificial demand. After safety precautions forced many individuals to stay home indefinitely, it pushed delivery services to the forefront framed as the safest option.

Will Customers Stay?

Now that vaccine rates are increasing and individuals feel more comfortable dining out, this artificial demand is unlikely to last. In a recent profile, the New York Post noted that prior to the pandemic delivery apps were widely fixed in a stagnant position, facing a saturated market and limited demand. Therefore, removing stay-at-home orders and safety restrictions could leave delivery apps in a similar position if they do not work to actively satisfy their current customers.

In a sense, delivery apps almost acted as a monopoly throughout the pandemic. Many felt they had no other option, so they paid the high delivery fees and upcharges out of necessity. But now that customers have access to restaurants and feel more comfortable picking up their own food, these services almost feel like a luxury. 

Once the necessity factor wore off, many also began to look a little closer at frequent fees. And while many who enjoy the convenience factor will undoubtedly continue paying the fees to save them a trip, others have become a bit wearier of the delivery services charges. Also, with restaurants increasing their prices on the third-party apps, there is much less incentive to continue using them.

It will be an interesting transition, and it puts forth the question of whether customers will continue supporting companies or industries they relied on during the pandemic once they no longer necessarily need them, or will they simply move on? Additionally, we will also be able to more clearly identify which companies successfully supported their customers throughout this period and effectively ‘won over’ these new influxes of followers.

If companies can capture some of this new customer base, it will be a testament to their exceptional customer service strategy. In 2021, customers are no longer willing to accept poor service or slow wait times they put up with during the pandemic. Therefore, industries that relied on artificial demand will likely need to bolster their products with effective and meaningful support during this next transitional phase. Additionally, brands that heightened their fees and increased their prices within this period may see some backlash as customers regain flexibility in their purchasing routines. 

How Can Surging Industries Remain Relevant?

Ultimately, this concept is not limited to any one sector, as we continue to see customer behavior evolve, there needs to be a consistent emphasis on a quality customer experience to remain competitive in this new environment. Any company that rested on industry success or necessity during the pandemic will need to reassess their priorities and now work to exceed customer expectations in their space.

In the delivery space, besides lowering prices or offering discounts to compete, customers may be seeking a more personalized and innovative digital experience. Many restaurants offer online exclusive product categories and Chipotle even recently introduced their quesadilla as an app-only item. Curating menu items that only exist on a delivery platform may instill a new sense of excitement around ordering in.

Additionally, Uber recently announced a new ‘Pickup and Go’ feature allowing users to grab their food or groceries during their ride. The new service will bundle its traditional ride-sharing platform with its uber-eats platform to optimize labor and increase individual spending. Uber is continually innovating its platform to keep customers engaged and it consistently provides discounts to capture a more loyal following. 

It’s these new elements that may help keep customers interested in delivery services. But as we’ve seen, customers are consistently adopting new preferences and engaging with brands in unique ways — so continued innovation and awareness is key in keeping customers consistently satisfied.