DoorDash disruption or rather disruption in the food delivery industry has been fuelled by the Covid-19 pandemic.
Disruptive innovation is the cause for new products, markets, and values that disrupt existing ones. Examples of disruptive innovation are Uber (travel), Waze (financial), Airbnb (Hotels), Netflix (entertainment), and DoorDash (restaurant).
World over there’s undeniable attraction to convenience and better customer service. Millennials and Gen Z live in the moment with their gadgets, games, and social media expecting convenience and want everything to come to them.
Therefore it isn’t surprising that restaurants took the bait to digitally transform themselves to face disruption. It wasn’t until the 2000s that the influx of third-party food delivery apps transpired.
2004 saw the launch of GrubHub in the food delivery realm, its success brought about competitors such as PostMates (2011), DoorDash (2013), and UberEats (2014).
All of these food delivery companies had the same ideology: They identified a gap in the current scenario, and placed themselves in between established restaurants and their customer base.
Suddenly, these companies had troves of customers downloading their mobile apps and ordering food on it as it promised quick delivery to their doorstep.
Introduction: DoorDash Disruption
56% of DoorDash customers claimed that they had ordered delivery twice or more during April 2022. About 79% of DoorDash customers mentioned that they had ordered pickup at least twice in April 2022.
DoorDash began offering this new service, ‘Package Pickup’ very recently. In this service, patrons can request a Dasher to pick up their packages, with or without a QR code and/or packaged with a shipping label. This would then be dropped off by the Dasher either to a FedEx, UPS, or USPS office for a flat fee.
DoorDash was valued at $28 billion in 2020. DoorDash business model’s main objective is that both users and restaurants benefit from its service.
DoorDash enables individuals to order food and beverages from various restaurants on one single platform. In the process, it helps businesses to extend their customer base.
The Innovative DoorDash Disruption
DoorDash has recently partnered with Sam’s Club for delivery of medications, Walgreens and CVS for groceries, and BevMo for alcohol delivery. In order to become the “All in one platform” they aspire to be, they designed a new business model called “DoorDash Drive”. With this facility any merchant can login to the platform and use DoorDash’s logistics fleet.
This expansion is based on Amazon’s playbook, by which they anticipate to become specialised in one line business. Just like, Amazon first began as a book distributor and then it expanded into adjacent markets.
DoorDash invests heavily in its analytical potential to run a data-driven startup and to become the best at food delivery. DoorDash has two to three times more data roles than its competitors’ full-stack teams. This indicates DoorDash’s self-explanatory competitive edge.
In this blog, we shall explain their disruptive business model that made DoorDash a household name. You can understand the key elements of innovation and see how it can be applied to your own business.
Disruptive Innovation
It basically means reinventing a technology, or business model, or simply inventing something new altogether. This type of innovation acutely changes and/or improves a product or service in ways that the market never foresees.
Disruptive innovation is achieved through a blend of uncovering new classes of consumers, lowering costs and increasing quality in the existing market.
This is implemented by using new technologies and business models, and/or exploiting old technologies in new ways. Disruptive innovation is about finding areas that haven’t been fully explored earlier.
DoorDash Disruption
DoorDash employs a 3-sided marketplace which includes three stakeholders, namely: Merchants, customers, and Dashers. The company’s team is continuously focused on improving each stakeholder’s experience. Moreover, DoorDash is actively handling their problems with immense dedication.
DoorDash raised a $500,000 fund to help groups across the country dedicated to youth development, economic empowerment, and community organisation. This began after the Black Lives Matter protests.
Furthermore, during the Covid-19 outbreak, the company opened ghost kitchens in selected cities, where chefs prepared food without overhead costs involved in running a traditional restaurant.
How DoorDash Takes On Innovation?
DoorDash makes every decision based on its platform’s analytics. This has help raise their conversion rate from search to checkout by 25% through the restaurant recommendation system. Now therefore, every consumer cannot see every store during a search.
The company uses machine learning to forecast demand. It takes into account traffic, availability, routes, weather, and supply of Dashers to boost Dasher utilisation. It also helps merchants with price optimisation, forecasting demand, and labour utilisation.
This customer experience and digital capacity are strengthened with a foundational operational strategy.
DoorDash believes in the motto “get 1% better every day”. In order to implement this motto, the company created an ”operational playbook” to launch, run and scale its local markets.
The company also has a team of “Launchers”. They work with all entities to introduce new markets and launch marketing campaigns to obtain new customers, recruit these restaurants, and onboard Dashers.
Key Elements Of Innovation
- DoorDash is focused on making delivery quicker and contactless. In order to achieve this, they are investing in drone delivery and autonomous technologies to create a fleet of connected vehicles.
- The company is becoming a near-instant delivery system for mom-and-pop stores that provides anything from coffee to gasoline.
- DoorDash experiments through its platform with ad images, menu presentation, and pick-up time for Dashers by market. This is carried out to a single minute based on weekday and time of the day to design the best experience possible.
- The company makes use of machine learning to prioritise the restaurants they select to partner with. This can be done by tapping into consumer trends and favourites.
DoorDash successfully stands on top in the food delivery industry and is now focusing on capturing all the localised logistics market. In order to accomplish that, the company took the true value of data to its heart.
Leveraged it to create a gratifying experience. It was relevant for all the stakeholders in its ecosystem.
DoorDash has added six safety features for its couriers which are: –
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SafeDash
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Check-In
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Real-time safety alerts
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SafeChat
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Safety reporting
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Porch light reminders for customers
DoorDash Core Strength
Their core strength is solving difficult logistical problems through technology. Because of this they have more consumers and orders, across more markets. Which further translates to better data to power their machine-learning algorithms. Hence, much of the DoorDash marketplace is now driven by data.
DoorDash is also becoming specialised in dark stores. This is at a time when retailers, from grocers to c-stores and non-food retailers, are beginning to feel this need.
Customers are also tired of surprise out-of-stocks because stores can’t integrate inventory with their platforms. Dark stores don’t face that issue, as they are made to fill online orders and service only that one demand stream. DoorDash disruption has brought a change in this industry.
Retailers should also be all set to provide new online shopping services centred around speed and selection. Young customers have grown up playing on their smartphones will gain noteworthy spending power in the years to come.
Many will yearn for speedy service and a digital storefront that gels well with the app format.
DoorDash has recently announced its speeding into ultrafast delivery. It will bring about a savvy experience to customers and significant scale to a space that’s become imperative.
Thus DoorDash has the power to become a major player in the developing industry. The company’s contradictory approach to grocery e-commerce underlines just how wide and ever-changing the digital food space is these days.
New channels are emerging that reconsider the traditional approach between grocery and convenience. Companies are trying to strike the right balance between speed and price across a variety of customer needs.
Conclusion: DoorDash Disruption
Entrepreneurs looking for an innovative and unique on-demand delivery mobile app solutions, which are technologically superior and commercially viable, can explore our latest food delivery software solution and convince themselves that they are on the right track.
Consider the DoorDash disruption brought about in the food delivery industry. This trend is here to stay. Even after the pandemic subsided, people have gotten used to this convenience and will continue ordering food online. Entrepreneurs should make use of this opportunity and launch a food delivery solution or existing restaurants can take too delivering themselves.
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After an Engineering degree and a Diploma in Management I devoted 16+ years working in the automotive industry. My innate skill and extreme passion in writing, encouraged me to adopt it up as a profession. I have been writing for more than 10+ years in the software industry. The 400+ blogs I published are informative, exhaustive and interesting to a professional and causal reader.
