Now a days, convenience has become an important aspect for the consumers of the food market. Due to change in the lifestyle trends, more and more people now prefer to order for home delivery rather than going personally to the food joints. Technology, be it Internet or mobile communications, has only aided this trend or lifestyle change. In India alone, the food market is estimated to run into thousands of crores of rupees. Due to this huge potential, fast food chains can no longer avoid tapping the sizeable chunk of the customers who prefer the option of home delivery. I’ll now be narrating the story of McDonald’s India to understand as to how the company realised the importance of offering home delivery and subsequently how it invested in home delivery channel of service.
McDonald’s, one of the world’s leading fast food service companies, was launched in India way back in 1996. However, it launched its home delivery services called McDelivery in India only on March 15, 2004, almost after 8 long years of being in operation in India. Probably, it either realised the potential of home delivery services late or may be it didn’t want to incur investments in home delivery services in the initial years of its operation in India. Sensing the growing potential of home delivery, in the year 2007, McDonald’s planned to invest Rs. 3 crore to strengthen its home delivery services and launched a single home delivery number 6600666 in order to penetrate into the market deeper. At that point of time, McDelivery accounted for almost 5% of the overall sales and investment in McDelivery services was aimed at taking this share to 7.5% by 2008.
McDonald’s did not place any restriction on the minimum order value from the very beginning, rather it charged a flat fee of Rs. 10 per order irrespective of the order value initially. Today, this fee stands at Rs. 20 per order after more than 6 years of the introduction of this offering. It has deployed an Interactive Voice Response (IVR) system which has options for placing the order, tracking the order status, lodging the complaints and knowing the promotional offers. However, to take the order from the customer and subsequently forward it to the nearest outlet, McDonald’s has to run a call centre which comes with a cost. Moreover, during the peak hours, customers may have to wait a little longer to get their orders registered with the call center executives. The best thing however is that once a customer registers for McDelivery, whenever he makes a call again to place an order, he is greeted by the customer care executive with his name and he is not required to tell his address for the delivery of the required food items.
In order to reduce the call centre costs and to give customers an option where they will no longer be required to wait for placing their orders through phone even during peak hours, McDonald’s introduced the order registration through web also from this year onwards in India. If this model becomes succesful, it will be a win-win situation for both the customers as well as the company. The company expects web delivery mode to contribute 5% towards sales. In all, home delivery share (combining both phone as well as web modes) is expected to be at least double-digit percentage of sales.
Probably, McDonald’s started its home delivery only after looking at the success of the other players in the fast food market. But, today home delivery has become an important part of the McDonald’s supply chain. After all, managing home delivery also involves delivering right food items at the right time in right quantity and right quality at the right address. Almost all popular fast food chains in India do have home delivery model in their business system. Some food chains earn more from home delivery than in-person visits of the customers. That is why, probably, home delivery has become a necessity for a fast food chain to penetrate in a market!
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