Deliveroo is to make it harder for app users to find merchants that add big mark-ups to products sold on the platform versus their physical stores, and those that are considered poor value by customers.
The implementation of the initiative over the coming months will divert users towards better-value restaurants, with the app making it “very clear when someone’s not as good on pricing” Deliveroo UK chief business officer Carlo Mocci told The Grocer.
Initially the programme will be rolled out to takeaway restaurants, with its application to supermarkets and convenience stores being considered.
“We have a lot of partners who apply absolutely no mark-up, negative mark-up or a tiny positive mark-up,” said Mocci. “Essentially they provide the same food at the same price as their stores. We designed a programme that’s going to accelerate visibility for those partners. They will be given more relevance on the platform.
“We’ll be pushing that more and more. We think it’s the right way to build long-term trust for customers and a sustainable ecosystem that provides value for all the constituents.”
Merchants will be assessed based on checks comparing on-app prices and store prices, and customer supplied scores of their perceived value. Mocci urged the value ranking – which has been in development at Deliveroo for the past nine months – was “grounded in statistics and science” and “you can’t buy your way into it”.
The move is the latest effort by Deliveroo to improving its value perception among consumers, which has slipped over the past two years, according to YouGov’s BrandIndex platform.
June research by Which? found a typical basket of groceries ordered via delivery apps can cost up to a third more than a supermarket’s own website. Previous Which? research found ordering takeaways via apps can cost up to a fifth more than ordering directly from restaurants.
Deliveroo’s own research has found found 78% of consumers are value-led when making purchasing decisions, and nearly one in three said they didn’t proceed with a delivery order after spotting a price mark-up on a restaurant’s menu.
This summer Deliveroo invested £20m in a summer savings campaign, and the company has been working with supermarkets to price match app listed products against in-store prices. It has also rolled out more promotional mechanics for restaurants and stores to use on the platform.
Of the new initiative, Deliveroo CEO Will Shu told The Grocer that “we think this is the policy which aligns the restaurants’ interests with our interests and the consumer’s interest, and the consumer’s interest is foremost.
“We’re not editors, this is based on data,” Shu added. “There are those examples, not common, but egregious examples and those we definitely believe shouldn’t be as visible.”
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