Delivery Club is a user-friendly technology platform. It will allow food delivery businesses to borrow and lend drivers from one another at short notice. In addition, GPS tracking will provide full visibility of all orders.
One member generates revenue from otherwise redundant resource while the other is able to keep their customer satisfied.
Food delivery businesses can't always predict when there will be a surge in the number of orders received and as such struggle to meet customer expectations with timely deliveries.
One of the key contributors to this is the limited access to delivery drivers. Further, the majority don't have access to an affordable solution to track their drivers which then makes the dispatch process inefficient.
The Delivery Club technology platform is being designed to tackle both of these challenges, providing a holistic solution.
With the comfort that they can access drivers when needed, we believe these businesses would be more inclined to increase their marketing spend and grow their businesses. Further, they would have the ability to earn money towards the cost of their delivery drivers when they would otherwise be idle. The GPS tracking would allow them to run a more efficient dispatch process and increase customer satisfaction levels.
Overall, food delivery businesses should run more efficiently, ultimately improving their profitability.
Delivery Club intends to disrupt the food delivery market.
Substantial accomplishments to date
Market research has been conducted as part of the feasibility study, capturing responses from over 200 UK food delivery businesses. A staggering 46% of London-based respondents were interested in the service. We feel that these market research results strongly support the proposition and a launch in London.
Legal advice has been sought to agree the legal framework needed to support this business as a venue model.
A database of the target customers in London has been compiled.
Telephone sales calls are in progress to pre-register members onto the platform. .
The full specification for the technology platform has been written and is now in development.
Delivery Club plans to generate revenue from sign up and monthly membership fees. These would be set at a reasonable level allowing Delivery Club to maintain a high take-up and retention rate.
Each time a driver is borrowed, Delivery Club will facilitate the payment for the driver between the two parties involved and deduct the cost of the transaction. During periods of high demand Delivery Club would surge the price of borrowing a driver.
Launch is planned for London in 2015. There is a plan to expand the service to three other regions of the UK by the end of 2016.
There are numerous growth opportunities for Delivery Club, these include, but are not limited to, the following:
1) Global expansion
2) Expansion into non-food industries e.g. parcel couriers
Use of proceeds
The money raised will be used across the business for the launch and to provide the capital needed to support the business until it is self-sufficient.
Three key areas where the money will be spent are:
1) Development and maintenance of the technology platform.
It is fundamental that the technology platform developed is user-friendly, fast and reliable.
2) Salaries including the telephone sales and administration staff
Experienced telephone sales professionals will be appointed to achieve the membership sign up targets. Administration staff will support members setting up and maintaining the service.
Delivery Club will be marketed through various digital mediums to build the brand and support the sales strategy. This includes a membership referral scheme.
The target market is made up of a range of food delivery businesses. There are approximately 50,000 in the UK of which roughly 8,000 are located in London.
These can be split further into three groups:
1) An independent business offering a home delivery service to customers from a single location.
2) A mini-chain of less than 10 branches, each offering a home delivery service from a different location.
3) A large food delivery chain with branches across the UK.
All these groups face the challenge of a shortage of delivery drivers in the UK and the majority also lack visibility of their delivery drivers. The largest UK chain, Domino's Pizza, recently reported a shortage of drivers and had to limit marketing spend as a result.
Customer satisfaction is a high priority to these businesses because they heavily rely on repeat ordering. They are also reliant on the delivery drivers to be well-trained, reliable and polite because they are the face of their businesses.
Characteristics of target market
Two of the three co-founders of Delivery Club have direct experience launching and growing a business in this industry. From their experience they have a firm grasp of the challenges that are present. They managed the deliveries for over 40 restaurants in London with a single fleet of drivers.
(MyDeliveryCab.co.uk was successfully sold to Dinein.co.uk in November 2014).
Overall, there is an increasing volume of consumers ordering home delivery and wanting convenience. There are weekly and seasonal patterns to ordering behaviour as well as weather correlations.
The majority of UK food delivery businesses don't currently GPS track their drivers, including some of the largest national chains. This leads to them relying on estimation for the dispatching and allocation of orders to drivers.
We have found that the demand for delivery drivers is outstripping supply. We have seen businesses finding themselves short-staffed and having to limit their marketing spend because they simply cannot fulfil the consumer demand.
The majority of members would be registered to the platform through telephone sales calls. In some cases, face to face meetings would be arranged, particularly for the chains.
A database of target customers has been built and the use of telephone sales calls for membership registration has been tested during December 2014. This has proven to be effective, confirming that there would not be a need for a large field sales force.
In addition, a membership referral scheme would be adopted to support the sales strategy.
Other ways that the target market would be reached include: social media marketing, on-line advertising, PR and through the Delivery Club website.
The concept of a platform to facilitate the sharing of delivery drivers is new to our knowledge and as such we do not consider there to be any direct competitors.
Indirect competitors include companies that provide GPS tracking solutions for restaurants. Delivery Club aims to provide a holistic solution at a more competitive price.
To succeed against future competitors the most important aspect will be to leverage from the first entrant advantage. The strong growth strategy coupled with a closely monitored member retention policy will help in this regard. Of course, if and when a competitor does enter the market, the threat will be assessed and the management team will react accordingly.
A question that the management is frequently asked is "Do you foresee Uber entering this market?"
"Uber has and continues to build their business facing consumers. I don't expect that in the short term that they will shift from this strategy and move into the business to business arena", ~Krupa Patel, CEO.