A half-baked idea
Founder Alex Shu, aghast at the lack of restaurants providing takeaway options, naturally saw a niche in the market. The three pioneers behind the Deliveroo project - Alex Shu (founder), Greg Orlowski (Software developer) and Frank (the algorithm) were running a loss-making model for years. Losing profits on every single order that they made.
Until Covid-19 came.
A menu change
Staving off bankruptcy along the way, Deliveroo struggled on. Building a name for itself above making a profit.
It’s not that the business plan didn’t work - but rather that consumers were not providing sufficient demand for the project. When each delivery driver had only a single order, then the company was bleeding money.
As of March 2020, Deliveroo took a different path.
The side order of success
The moment the UK lockdown began in March 2020, Deliveroo launched into the grocery store eCommerce sector. Not content with delivering only takeaways, the company now provided food shopping deliveries all across the UK from major supermarkets across the board.
This was Deliveroo’s time to shine. Through their foresight, they adapted on time to the upcoming trend.
It took two decades for eCommerce orders to take up 7% of all UK grocery shopping, within 8 weeks of the pandemic it jumped to 13%. The UK is not alone in this trend, as 81% of all US consumers had never ordered groceries online in 2019. Just one year later, 79% of consumers were ordering online.
How much do you spend on an average takeaway order? £10? £20?
Now consider how much you spend on your average weekly food shop. The difference is staggering, right?
This transformed Deliveroo’s loss-making business model into one of the most successful eCommerce stories in recent times. Their foresight and adaptability allowed them to remain ahead of the curve and seize the business advantage that they had been waiting for.
While their rivals struggled to keep up, Deliveroo were already expanding their fleets with their newfound profits.
Not content with their pandemic success story, Deliveroo are now rolling out a new concept called Deliveroo Editions. Creating ‘dark kitchens’ across the UK.
These ‘Editions’ will focus on data collected by the app about consumers’ ordering habits, and creating delivery-only restaurants for a home-dining experience like never before.
Will it become another success story? Perhaps. They have already rolled out across London and are set to expand to the entirety of the UK before long. It’s something new. Something daring.
And with the right ingenuity - it could just become the new normal.
Being proactive brings profitability. Adapting to eCommerce trends is the new way to succeed in today’s markets, whichever sector of business you may be in. So make sure you have the right accountants on your side.
At Accountancy Cloud we offer solutions to all SMEs. With automated software that optimises workflow and accuracy, you can stay up-to-date on all your comings and goings from a live financial dashboard accessible anywhere at any time.
With support for everything including R&D Tax Credits and helpful tools for CFOs, you can worry less about your finances, and make vital business decisions to scale up your business into something incredible.
Who knows? Maybe you’ll become our next success story.
Get in contact with us today, and see what’s on offer. Then go out and change the world with your business!
You focus on what you do best. We’ll handle the rest.
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