An Intro to Food Delivery
Food delivery has become more popular than ever this year. COVID-19 made it the safest option for many restaurants to offer socially distant delivery and takeout. Unfortunately, many owners found that the commission fees were too high to pay on traditional third-party apps like Grubhub and Uber Eats. When new apps launch, they need to find creative ways to stand out from the crowd. Offering good deals for merchants and customers is a start, but third parties are branching out. Snackpass, a new takeout service, combines food delivery with social media.
As you can imagine, their target demographic focuses on college students. Millennials and Gen Z are the biggest users of social media according to the Pew Research Center. They also contribute to a significant portion of online orders since it’s so convenient to buy meals from their phones. It makes sense that an app which claims to be the intersection of food delivery and social media would appeal to younger generations who spend ample free time on both.
Photo by Jarritos Mexican Soda on Unsplash
What Is Snackpass?
Despite offering both delivery and takeout, Snackpass primarily focuses on pickup orders. In fact, that’s how 90% of their business takes place. This ultimately saves on overhead and paying (or managing) a fleet of drivers. Founded in 2017 by Kevin Tan and Jamie Marshall, Snackpass now has 500K users, spans 13 college towns and boasts a valuation of over $400M.
Food delivery is still a lucrative business. Even as restrictions loosen, people don’t want to give up the convenience of getting their favorite foods delivered. Therefore, apps like this will mostly likely stick around long-term. The pandemic forever changed the food service industry, setting it on a new trajectory. Since delivery is critical to so many restaurants’ success, a lot of new companies are popping up to meet that need.
Still, many small platforms struggle to get noticed amongst giants like Postmates and DoorDash. If they want in on the action, they need to find some way to stand out—something they offer that nobody else can. Maybe that means discount codes, experiential virtual concepts, bulk orders or another feature that draws restaurants to you over other platforms.
What Makes Snackpass Unique?
On average, Snackpass reports its customers ordering 4.5 times per month from their app, so they must be doing something right. They invest concerted effort into building a loyalty program so that customers want to come back and order through them. For example, their referral program encourages users to invite their friends, which garners discounts for both parties. That’s a good incentive to at least try out the app, at which point it’s easier to convert first-time users into repeat sales.
Snackpass doubles as a social media platform to encourage just that. So what’s so “social” about this food pickup app?
Friends can give each other discounts to make ordering out more affordable.
Send gifts to people through the app to connect with loved ones, even if you can’t buy them lunch face-to-face.
Collect points that add up to free purchases and other little deals at local restaurants. These rewards keep building loyalty after that initial download.
A social activity feed keeps guests in the loop of where their friends have been spending.
All this plus lower commissions for restaurants has enticed their target demographic—college towns—to accept them already. If it keeps catching on, this may be the intersection of interests needed to get the younger generations on board.
Photo by Ryan Plomp on Unsplash
The Growth of Food Delivery
If you’re a restaurant, you may still be wishing that you could open your own takeout streams and save the commission fees altogether. Fortunately, third parties aren’t the only resource capable of giving you what you need so that you can deliver to your best customers. With orderOS, we’ll create a personalized merchant app and features that will help you hit the ground running.
