New Service Fee

Problem statement (generic)

Delivery fee is considered a critical aspect on the competition with 3rd party players. The evolution during the last years has brought the industry to structure the delivery cost in a more granular way to optimize efficiency and enhance competitiveness.

This includes dissecting the delivery process to identify specific costs such as the drivers and their allocations, implementing advanced route optimization algorithms, and considering a different number of factors that are impacting the delivery itself.

As a result, RBI can minimize expenses and ultimately offer more competitive delivery fees connected with a better transparency.

Fees definition

Delivery Fee: The basic cost to provide a delivery service. It has several possibilities and factors that can impact the calculation.

Service Fee (or Managment Fee): It includes several variables can be included in this macro fee. Examples are: payment method, tier loyalty, company priorities, etc.

Problem statement (Iberia)

Looking at the /wiki/spaces/IN/pages/3863838850 document, there are a few concerns:

a) Basket size

In the actual formula, the basket size has a progressive discount mechanism.

In the Iberia markets, where the Average Check is BK ES 12.10€, BK PT 10.18€, PLK ES 14.83€, the high delivery fee (4.99€) for the purchase <10€ and the lack of a specific cost section for small basket size brings to show an extremely expensive delivery fee without providing the right information.

Considering the small basket size a variable and not a discount will help to explain better the cost structure of the fee

b) Free delivery fee

Connected to the previous point, there is the fact that splitting the cost of the delivery fee and basket size can facilitate the marketing strategy of offering free delivery fee - a key competitive advantage. Considering the Average Check and the fact that the free delivery fee is a strategic marketing action (campaigns, partnerships), having a lower base delivery fee (ex: 1.99€) and having the basket size cost splitted, could allow the company to push for a “free delivery fee” strategy without impacting the financial part of the company.

c) Connecting PLUs

Today is missing a relationship with a PLU that will facilitate the analysis and the job of the accountants on the new delivery fee structure (see example below). Generating a specific PLU for both fees (delivery and management) could be a good approach.

d) Other fees to be considered (IMPROVEMENTS)

Today the delivery cost calculation is not taking into account other critical aspects of the delivery and management process that are impacting negatively the logistic and financial part of the delivery.

More informations here: https://www.figma.com/file/Bp8vIQlnoJMLyONqVQ4ACG/2023---Q4---%5BIBFEC-1137%5D---Dynamic-delivery-fees?type=whiteboard&node-id=0%3A1&t=rku4BIAcK07yt1pF-1

Success Metrics

1. Average check increase (primary KPI)

2. Conversion from cart > payment

3. Conversion from cart > purchase

Acceptance Criteria

The new Service Fee will operate for Home delivery in app, web, call center and aggregators (with differentiated costs)

• Web/App:

  • The two rates applied to each order will be shown in the order checkout and order details.

  • The checkout will show a breakdown of the management fee applied to each order.

  • It will be shown at checkout how much the customer is saving on handling and shipping fees when:

  • The creation of promotions will be allowed for all customers or from promotional codes at one or both rates, without losing the price information configured by default.

    • applied promotions at a general level (informing the application of the promo)

    • applied promotional code promotions (informing the application of the promo)

  • Ticket POS: print the two fees added to the order

  • The order total is greater than the first range defined at the shipping rate, when there are no promotions

  • The order total is greater than the first range defined at the management rate, when there are no promotions

  • The recommendations carousel will be added at checkout

• Web/App Config:

  • Editable by channel

  • Editable by price range

  • Editable by restaurant

  • Editable by time slot

  • Multiple versions per restaurant

• DMP and DOP: update all screens where the shipping rate information is already presented to also show the management rate

  • Ticket Home delivery: you must print the two rates added to the order

  • Home delivery report: update it to send the new management fee

Solution

There should be an additional fee to be shown, indipendently from the potential other ones existing.

• SERVICE FEE is a variable fee that is related to factors that can impact indirectly the delivery. Factors can be various; for the MVP we will include the small cart size, a factor that is variable depending on the basket size.

• It will be possible to show the Service Fee for each type of service, not only delivery, and it should be possible to customize by restaurant. There should be also the possibility to have different Service Fee per restaurant.

• To configurate the fees the solution should be indipendent from the tech team and need to be managed by the Iberia market. Today there are potential solutions for that:

a) LaunchDarkly

b) Sanity

b) Ops Portal

• Food Aggregators will use specific fees

• The Service Fee will be shown in the WL and Call Center

• The Service Fee will be shared with the Food Aggregators as well as per the image

Design

Front End - link here

Configuration - link here

DMP - link here

Call Center - link here