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The Behavioural Secret at the Heart of Food Delivery Services

 

by Ashwin Rajan

Wolt has bolted to darlinghood in the Nordic startup circles for their elegantly designed service. And rightfully so.

There's a simple behavioural reason for the rapid adoption of these services, and its one that many other products can be inspired by. You might think its food that Wolt delivers. Not really. That is still delivered by the restaurant. Wolt is in the business of delivering time.

In markets where abundance is the norm, the new scarce resource is time. Ilf we fully comprehend the sheer size of this shift, we'll realise that Wolt (and others) can build around the behaviours that their service actually enables, and devise product adaptations or extensions accordingly.

Customers whose scarcest resource is time are a special, and prosperous, category. They have special needs, preferences and expectations. There's Wolt core market. Such people are also the most likely to become long-term paying customers.

With their basic behaviour dynamic established, Wolt can for now race to scale it, and I'm pretty sure its what the majority of their new funding will go towards.

But with muscular competition looming, the question is how Wolt can entrench themselves into customer's lives. I'm fairly certain the answers lie at the intersection of location & proximity, mapped to consumption data patterns. Customer preferences will have to be used to contain churn.

A small but significant detail, on the merchant end, is the 'flat fee' model - a stroke of genius which I am not certain if anyone realizes. This has multiple positive effects - it could help the company more accurately forecast revenues based on projected volumes. It could give the merchant added value by earning more on larger orders (the flat fee incentive would drive merchants to try attracting larger orders by offering packages and so on. This in turn could increase customer loyalty and retention.)

Update September 2016: Shipt, which raised $20.1M Series A financing from Greycroft Partners nails the value proposition I have been discussing above on their home page,

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