04 Feb 2020 | Business & Innovation | by Robin Nierynck

Happy customers, smarter working: how 20 min delivery can redefine the on-demand experience

Imagine this: you’re at home, winding down from a long day at work. You’re hungry, but your fridge is empty, and you remember that you’ve forgotten to buy a present for a friend’s birthday tomorrow. On top of that, you need fresh groceries for tomorrow night, as you are having some friends over for dinner and you won’t have time to go food shopping.

Delivery Hero rider

In order to provide an amazing delivery experience for the customer, we’re looking at delivering in 20 mins or less

You unlock your phone. With a few taps, all is settled. 20 minutes later, you’re about to dig into that Thai curry you like from the local restaurant, a bouquet of flowers is waiting in a vase for tomorrow’s birthday, and you’ve saved yourself a trip to the supermarket; the delivered groceries are already packed away in the fridge for tomorrow.

Only a few years ago, this would have been wishful thinking. Today, it’s on our doorstep.

Why fast delivery matters

When we first started out in the food delivery sector, receiving a pizza 60 minutes or more after ordering was not out of the ordinary for the customer. But as we streamlined processes, introduced new technology and expanded our own-delivery capabilities, we drastically improved service levels and little by little our customers got accustomed to receiving orders in under half an hour.

Delivery times are only going down, and customer expectations are going up, according to Timo Chambers, Vice President, Logistics & Restaurants, who is responsible for overseeing the logistics of the entire delivery process. “Today, in order to provide an amazing delivery experience you’re looking at delivering in 20 mins or less,” Timo says. And customers are ordering far more than just food – in many of our markets a large chunk of deliveries consists of other items such as flowers, groceries, pharmaceuticals and more.

“The importance of delivery times is simple: We see a clear linear correlation between delivery time and reorder rates, or customer retention,” Timo says. “In other words, whether customers order again and how many times they reorder. The faster we deliver, the faster the customer orders again within 30 days.”

What are the challenges?

Timo Chambers

“If we improve efficiency across all steps, it increases utilization levels and decreases delivery times.” – Timo Chambers, Vice President Logistics & Restaurants

Delivery times can vary widely per country and region, influenced by infrastructure, efficiency levels, density of restaurants in the area and many other local factors.

You need to work on efficiency across all stages of food delivery to decrease delivery times. That means cooking time, reaction time, driving to vendor, time at vendor, driving to customer, and delivering the order.

“Crucially, increasing the number of orders per hour does not equal decreasing service levels,” Timo notes. “It’s actually the opposite – if we improve efficiency across all steps, it increases utilization levels and decreases delivery times.” Rather than big steps, it’s all about improving our processes and eliminating little inefficiencies. It’s a continuous effort, a step by step journey towards being the best we could be.

How do we get there?

Well, we’re already here. We deliver in under 20 mins in many of our markets. The question is: how do we make this a consistent and reliable offering to our customers?

Optimizing delivery is a combination of our central logistics and tech infrastructure and our operations on the ground – which is why the work our brands across the world are doing is invaluable. Our local teams, in collaboration with our central teams in Berlin, cover topics such as staffing, vendor compliance, rider compliance, manual interaction with the customer and so on. And of course we need to consider the varying infrastructure across different cities and countries.

In order to make a product out of fast delivery, we need to consider where it makes sense to deliver within 20 minutes, taking into consideration distance, dish level preparation time and fleet utilization,” Timo says. “Far worse than not delivering fast, is promising something and then failing to deliver it.”

The importance of delivery times is simple: We see a clear linear correlation between delivery time and reorder rates

Timo Chambers, Vice President Logistics & Restaurants

In this way, our algorithm can prioritize certain orders. For example, if a certain restaurant takes 40 mins to prepare a dish, a rider would have more than enough time to complete a 20 min delivery while they are waiting for the other restaurant.

The key is finding the right balance. We cannot offer 20 min delivery to all of our customers at the same time – yet. We need to consider peak times, the density of the restaurants that are open, the number of riders available and so on.

What we want to achieve is to offer our customers the most and best choice possible, and this comes in many shapes and forms. Customers could choose to have a faster delivery, with a smaller

What goes into increasing the percentage of 20 min deliveries, from a local and global perspective

What goes into increasing the percentage of 20 min deliveries, from a local and global perspective

radius of restaurants available, or opt for more choice and a little longer wait. We can offer faster deliveries to frequent customers, or explore subscription services. We’re still exploring the many options, but the key takeaway really is that we don’t want to limit our offering to a one-size-fits-all.

Why we care (and so should you)

20 min delivery has the potential to optimize the delivery model (whether that’s food, flowers, groceries,…) from start to finish, and every step in between. On the vendor side, it provides restaurants and merchants with more orders and revenue, within realistic timeframes as calculated by our algorithms. Food quality improves for the customer, as meals are delivered quicker and over shorter distances.

For riders, optimizing processes and promoting orders within close distances creates more reliable employment opportunities and a smoother working experience. For example: by optimizing the way addresses are stored in our systems, riders can save a lot of time trying to find a location, resulting in a smoother experience, the opportunity to complete more deliveries, and as such a higher pay. A common misunderstanding is that 20 min deliveries would negatively impact riders by requiring them to be faster, but for this system to work we never require riders to move any quicker. Rather, we improve our own systems to facilitate their job.

For this system to work we never require riders to move any quicker. Rather, we improve our own systems to facilitate their job

And of course there is a significant benefit for the customers, who not only enjoy a better food selection but also a faster delivery.

One area to watch when it comes to bringing delivery to the next level is our dark stores, which are storage facilities (think supermarkets that only do delivery) in key locations across the city. By carefully selecting the location, offering and delivery radius, these stores are already enabling us to deliver food and convenience articles in 15 minutes and less, and that’s just the beginning.

We won’t stop at 20 mins, but will keep improving our services to offer a truly amazing customer experience and revolutionize the face of on-demand delivery. Watch this space!