Just Eat trials dynamic pricing

1st August 2019

Just Eat, the market place for takeaway food delivery, been trialling dynamic pricing in three UK cities.

Speaking after the company reported its half-year results, Peter Duffy, interim chief executive, said: “Dynamic pricing means we can change the delivery fee based on what we call lived-demand signals, these are the volumes of orders made by our customers, the weather, events, delivery distances and so forth. Over the past few weeks we have been trialling this in Denmark, where we have rolled out to 400 restaurants nationally and in the UK, where we have rolled out to 40 restaurants across three cities. The system allows us to understand the relationship between delivery fee pricing and order volume at a hyper-local level. The objective is for us to be able to flex delivery fees in real time based on live-demand signals, so we not only optimise the delivery revenue but also optimise overall order volume as well. The platform is being developed so we can offer it to our market place restaurants as well as a managed service, which in turn will be able to help them optimise their own delivery economics. This sort of thinking can be extended into other areas, such as dynamic minimum order values, time-based vouchering and flexible delivery zones. It’s very exciting.”

Over the past six months, Duffy said the company had also increased its delivery area from 94 to 166 cities, which is now in line with its two main delivery competitors in the UK.

He said: “We have also grown our ‘Skip’ delivery service from three cities in the UK at the start of the year to 64 by the end of the second quarter. We now have 5,200 delivery restaurants on the platform, which we are aiming to grow to more than 8,000 by the end of this year. We have double the amount of KFC, Subway and Burger King restaurants on the platform since the start of the year. With market place this takes us to more than 34,000 restaurants, way ahead of any other competitor.”

In the past three months, Just Eat has also launched its CRM toolkit, which means it is able to deliver personalised messages and campaigns “both in and outside its app into multiple markets at very limited cost”. Duffy said: “We are rolling out the capability of very seamless customer journeys, so you will be able to target a customer with a voucher, they are going to be able to click on that voucher, go through in on the app to that restaurant, making that one journey all the way through. Although that isn’t radical for a number of industries, that was something Just Eat wasn’t doing previously. So personalised one-to-one communication has been rolled out across all our markets from the start of May. We are optimistic about the results we are starting to see.”

The company also said that its search for a new chief executive had been put on hold due to its circa £9bn proposed merger with Takeaway.com.

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