Key Takeaway
Deliveroo remains ahead of the competition by investing in resources that give it a competitive edge. However, the crux of the company’s success lies in its quick responses to customer concerns and demands, thanks to its data-driven decision-making processes.
Online food delivery business Deliveroo has been one of Britain’s most successful startups since its launch in 2013. The firm has raised $200 million (£132 million) in the last year and is thought to be valued at around $600 million (£397m). Deliveroo has revolutionised the way people order food by enabling customers to indulge in home delivery from their favourite restaurants that wouldn’t otherwise deliver. Customers can now get quick and reliable delivery from over 750 premium London restaurants thanks to a network of 300 freelance Deliveroo drivers.
The efficiency of Deliveroo is based purely on big data and machine learning. The company’s VP of engineering Dan Webb says, “Ever since Deliveroo was founded, the use of data has been absolutely critical to ensuring that our customers, our riders and restaurants have the best possible experience on our platform.”
Deliveroo uses data in three key ways.
The first is to support team decisions. Constant experimentation helps the team to understand product changes made. Webb explains, “Graphs help our operations team understand and react to trends, and agents all across the business are running queries on our dataset 24 hours a day.”
Second, data is used to support decisions and recommendations, as machine-learning models need to be constantly re-trained to ensure that they are running on the most up-to-date and relevant information.
Third, data is used to provide ‘real-time operational monitoring’. Since its operations are based in busy cities, connecting customers to riders and restaurants, the work environment is often quite unpredictable. Deliveroo makes use of real time data, both to see and react quickly to problems that may arise, and predict and avoid these if possible.
Their dispatch engine, ‘Frank’, is continually calculating and matching the best combination of riders with respective customer orders. These calculations and predictions are based on a machine learning algorithms trained on historical data to predict rider time, food preparation time, etc.
How data drives decisions at Deliveroo
Tapping into Snowflake’s cloud data warehouse
To become more efficient, Deliveroo announced that it would incorporate Snowflake’sdata warehouse to access data quicker and tie-up with newer restaurants in areas of higher consumer demand.
Snowflake is a data warehouse built for the cloud. The fundamental purpose of the data warehouse is to make it easy for companies like Deliveroo to amass all their data, enable rapid analytics, and make quick insights from available data.
Henry Crawford, Head of Business Intelligence at Deliveroo said: “At Deliveroo, data is baked into every aspect of the organisation, supporting over 1,500 employees. With data coming from a variety of verticals including traffic, transactions and customer behaviour, having a cloud-based data warehouse to make sense of all this data and centralise this in an agile manner has been incredibly important.
“Having instant access to this data has allowed us to see which areas are experiencing a shortage of restaurants and particular cuisines, and create these hubs right at the doorstep of consumers through our Deliveroo Editions offering. The shift to Snowflake’s data warehouse has enabled us to make good on our promise that got Deliveroo started: to connect consumers with great food from great restaurants, wherever you are, and whatever it takes.”
Constantly adopting new technology
In 2017 Deliveroo adopted a new technology called the Deliveroo Toolkit, created by US food company Maple. The new technology will be rolled out to 160 Deliveroo edition kitchens in the UK and made available to 25,000 restaurants on the app. When brought into service, the technology will help restaurants optimise their service by speeding up food preparation, preventing bottlenecks in kitchen operations and speeding up orders for customers.
How Deliveroo Toolkit works:
Food preparation
It provides chefs with information on estimated preparation time of food, to optimise preparation and cooking speed, ensuring shorter lead times from kitchen to customer
Kitchen bottlenecks
It provides chefs and restaurant managers with a real-time kitchen overview dashboard, identifying potential bottlenecks
Buying efficiency
It provides restaurants with information so they can effectively manage their purchasing operations by predicting weekly order quantities and ingredient requirements
In an economic climate where costs are skyrocketing, the Deliveroo Toolkit enables restaurants to increase efficiency and revenue, hoping to help increase efficiency not only at the delivery end, but also at the production end.
Rohan Pradhan, Vice President of Editions, Deliveroo, said: “’This new technology is a game changer for the food delivery industry, helping restaurants to grow whilst speeding up service for customers.”
Deliveroo brings life to its data-driven approach to strategic decision-making. They are indeed at the forefront of innovation and constantly introducing cutting edge technology to power efficiency and to stay ahead of competition.
Deliveroo has also invested unprecedented financial resources to give itself a competitive advantage in the food delivery market, via the introduction of Deliveroo editions. These are kitchen hubs of hand-picked restaurants in various locations in London, all specifically designed for delivery. Although initially designed to assist popular restaurants with overflow delivery orders, they also now provide customers with food delivery options of quality food in their local neighbourhoods with limited options. Rohan Pradhan, VP overseeing the effort says “ The goal is to help restaurants expand in areas they wouldn’t otherwise consider going,”
Currently hosting 105 of these kitchen spaces across dozen cities in the UK, Deliveroo hopes to expand these operations in cities such as Manchester and Cambridge. These innovations and plans of expansion are all part of a bigger plan to expand internationally to countries such as India, as the company faces tough competition from Amazon, Delivery Hero, and Uber Eats and more.
