The lure of a $35 billion online food delivery market, projected by Swiss investment bank UBS to grow by 10 times to hit a massive $365 billion by 2030, has whet the appetite of more companies for a bigger slice of the market. Meal kits and takeout apps are fighting each other. They are also battling against the threat posed by Amazon, which acquired Whole Foods last year as part of its digital grocery strategy, and Uber Eats, which recently beefed up its menu with a deal with Starbucks to deliver coffee and take-out.
The battle rages strongest in the mobile app market, where just a handful of companies dominate. Latest data from app market intelligence provider Priori Data shows Uber Eats app download rates in both North America and Europe are gaining critical mass, putting it on the path to becoming the “most downloaded food app in the market.” Uber may have deep pockets to help it acquire customers at a faster pace than most of its competitors, but it takes more than cash to keep orders coming. In a market where most apps lose their customer base in a matter of months, it’s the ability to drive deep customer engagement (and high app retention) that distinguishes a market leader from the also-rans.
It’s a challenge that Berlin-based Delivery Hero, an online and app food delivery business valued at $7.25 billion, is determined to win by aligning marketing and messaging with the needs, characteristics, and cultures of its customers. To date, Delivery Hero, which likes to call itself the “United Nations of food delivery,” spans 28 brands in over 40 countries and partnerships with more than 250,000 restaurants across five continents. While it has retrenched from some loss-making markets, including Germany, where online food delivery isn’t yet part of popular culture, Delivery Hero is aggressively pursuing ambitions to scale up operations in more lucrative markets, including Latin America and APAC.
“We’re growing fast as a company,” Mats Diedrichsen, Delivery Hero CMO, told me in an interview. “But winning in this market isn’t about taking customers from other food delivery companies; there are lots of customers out there.” The “Big Picture” goal, he says, is to turn “brand interest into brand love” with an approach that goes “beyond audience segmentation to drive deep emotional connection.”
Adapting campaigns to cultures
Acknowledging that acquiring a new customer can be 5x the cost of retaining an existing customer, Delivery Hero is building capabilities to “become the brand that resonates with customers, and therefore keeps them coming back,” Diedrichsen says. “Consumers sense when they are getting a message that feels like it’s been templated,” he explains. To make each customer feel “special” the company works with Braze, a customer engagement platform, to personalize and deliver engaging messaging experiences across push, email and other channels, at scale. The end goal: balance automation and personalization to “connect with customers in a culturally relevant way” based on an analysis of more than 200 data points (with the help of machine learning algorithms) and an understanding of customer context.
This was the blueprint Delivery Hero followed in late 2015 when it tailored messaging to bring customers who had abandoned their cart back to complete their order. According to Igor Lubawinski, VP of Customer Relationship Management at Delivery Hero, the well-timed and well-targeted push notifications able to communicate to each customer in a way that was “highly personal and highly relevant” resulted in a “20x uplift in revenue for a single campaign.” Understanding and aligning culture and cadence also allows Delivery Hero to drive engagement rates through the roof. In many western countries, he says, getting too personal with messaging is not appreciated and customers will opt out altogether if they receive too many notifications. In other countries like Singapore, it’s the opposite. “Delivering at least three messages daily is a must. Otherwise, customers will think your brand is dead and delete your app altogether.”
Delivery Hero also taps local teams and knowledge to match campaigns with the Zeitgeist of popular culture. A string of recent campaigns proves that being playful or having your finger on the pulse of what’s hot right now —and in the right context—is on the money. The trick, Lubawinski says, is to be “fast and fun.” This is the approach that has powered Delivery Hero’s winning campaigns from the start.
Back in 2016, sensing that buzz around ongoing divorce proceedings following the break-up of Angelina Jolie and Brad Pitt would soon eclipse everything else, Delivery Hero’s local team in Turkey quickly launched an emoji campaign to remind customers that burgers and fries, unlike the celebrity couple, should always be together. Response rates moved the needle with open rates that were nearly double the norm. A year later a similar campaign piggybacking on customers’ sudden urge to binge-watch Season 2 of Stranger Things also paid dividends. In the countries where the campaigns ran, which including Uruguay and Argentina, direct open rates were more than 2x the average, according to Lubawinski.
In Scandinavia, a smart approach to gamification took the fun factor to a new level. Aware that in some rural areas customers wait up to 60 minutes or more for food delivery to their doorstep, Delivery Hero launched a campaign to turn a pain point into a touchpoint. The main attraction was Kung Fu Pizza, a casual Super Mario Bros-type mobile game the company developed to help customers pass the time and qualify for perks. Time spent clearing obstacles to deliver pizza in the app game was less time spent watching the clock, and winners received vouchers, reinforcing the idea that ordering food online was worth the wait. Delivery Hero quickly adapted the lessons learned by the local team to other countries, including Finland, where the gamification concept was promptly tweaked and modified to local culture, allowing users to find hidden gems in in-app messages. The outcome: “phenomenal click-through rates of 8x the norm,” according to Lubawinski.
Learning from Coca-Cola
Diedrichsen attributes the success of Delivery Hero’s messaging and push campaigns to an agile platform that allows the company to “shift gears and ride the tide” of popular culture and consumer tastes that can change at break-neck speed. This approach gets high ranks from Myles Kleeger, President & Chief Customer Officer of Braze, who points out that food delivery is an industry where messaging strategy is in a constant state of refinement based on how customers choose to elevate their lives with food in various cultures across the globe. As a result, Kleeger says, “the messaging you send becomes an extension of the overall brand experience.” However, Diedrichsen pins the company’s longer-term success on its ability to learn from the best brands, including Coca-Cola, the best practices to communicate with customers in an authentic and engaging way. “It’s not about offering products,” he explains. “It’s about becoming a ‘love brand’ that resonates with customers, and therefore retains them.”
Following meetings with Rodolfo Echeverria, Global Vice President, Creative at The Coca-Cola Company, Diedrichsen is confident his company is on course to build customer engagement at an emotional level. Diedrichsen compares his encounters at Coca-Cola headquarters in Atlanta to a Jedi apprentice meeting with Yoda. In an email interview, Echeverria tells me he was likewise “impressed” by Diedrichsen’s “level of curiosity and desire to put the consumer at the center.”
Despite being a relatively young brand, Delivery Hero has an opportunity to be a love brand, according to Echeverria. “Reaching high levels of brand love is not reserved to any particular type of brands,” he notes. “Mobile app brands such as Delivery Hero play an integral role in people’s lives and many meaningful moments. The opportunity would be to blend the functional with the emotional: the utility of high-quality food that Delivery Hero provides with the emotional power of people connecting around a meal gathering.” In a crowded market like food delivery, he continues, “a brand will only win in the mid- and long-term through relevant differentiation, continuous innovation and building an emotional connection with their consumers.”
This dovetails with new research from Forrester Consulting and Braze that suggests demonstrating humanity through personal and authentic messaging that hits all the right emotional notes. Overall, 57% of consumers said they would be more loyal to a human brand (that is, one that shows empathy and interest). Moreover, the study concludes, “brands perceived as human enjoy a 20% advantage in how likely consumers are to recommend them, a 19% boost in the likelihood to be ‘loved,’ and a 17% advantage in the likelihood to purchase, compared to ‘non-human brands.’”
Thanks to the advance of ad-blocking technology and new features in smartphone operating systems, such as Apple’s iOS 12 (which completely changes the way consumers manage iPhone and iPad push notifications) customers can tune into brands they feel understand them and dismiss the rest. The stakes are high, and companies that build capabilities to deliver highly relevant and personalized messaging at scale will be successful.
This article first appeared on Forbes.