Although many customers are enjoying the convenience of food delivery apps with six in ten placing digital restaurant orders, individual apps are facing significant challenges in retaining users.
Just 25% of users finish the app sign-up process after they first launch the app, according to new research by CleverTap based on an analysis of three billion events on food delivery apps.
Estimated to reach $365 billion by 2030, the food delivery market is poised for some serious growth as consumers continue to reap the benefits and convenience of using their mobile devices.
The average consumer takes 22 minutes to register on a new app after first launch.
The report also noted that only 22% of new users continue to be active after the first week of installing a food delivery app.
Meanwhile, 86% of new users will stop using an app within just two weeks after first launch.
Another 54% of users will uninstall an app within the first month.
“The food delivery marketspace is booming thanks to the convenience it offers in today’s busy lifestyle. At the same time, however, the competition is getting more fierce. The food delivery app space has very low entry and exit barriers and hence churn and retention are constant challenges. The key to improve both, is to provide a differentiated experience at every stage of the user lifecycle.,” said Almitra Karnik, Global Head of Marketing at CleverTap.
“Showing enough value to get a user to sign up is only the first challenge. You also need to incentivize users to use the app and perform repeat transactions ‘in-the-moment.’ With this report, marketers will know more about how their apps are measuring up to the competition and understand how they can rise above the competition.”
The report reveals that food delivery apps will require seamless onboarding experiences to make it easier for customers to register when first using an app.
Useful engagement strategies include sending timely campaigns to re-engage users, but also differentiating between loyal users and those more likely to convert.