⏮️ Context
Optimizing Revenue with Dynamic Delivery Fees
Our current delivery fee model allows the fee to change based on the total value of the Order but it does not consider other influencing factors. As a result, markets miss out on opportunities to optimize their revenue. There is a need to investigate this opportunity in more depth and understand the viability of a possible solution to this new pricing strategy. This document proposes some initial hypotheses to be validated, where fees are adjusted based on specific conditions like weather, payment method, customer loyalty tier, etc. This change aims to create a more adaptive and efficient pricing strategy.
❔ Hypothesis
These are some of the hypotheses to be validated in Discovery:
Revenue Growth
Modifiers can have a positive impact on revenue
RBE has revenue growth goals that will benefit from value modifiers to delivery fees.
Additional delivery costs will not impact current revenue streams.
Reach
All restaurants from the Iberia region will benefit from this new pricing model
Fees modifiers setup
Allows creation of delivery fee modifiers that adjust the fee value based on the modifier configuration.
The market should be able to define its own modifiers and how they impact the fee value.
The Modifier value can be nominal or percentual.
The Modifier Value can increase or decrease the fee value.
All restaurants in a given market will have the same available modifier options.
Any changes done to modifiers must be reflected immediately in the Guest App.
Modifiers examples: Bad Weather, Reduced Restaurant Capacity, High Demand Period, Reduced Delivery Capacity, Guest Loyalty Tier, Payment Method, and Seasonal Period.
Fee Modifiers Management
Markets should have a dashboard to monitor and configure dynamic delivery fees.
Must allow modifiers to be activated/deactivated to one or many restaurants.
Must allow modifiers to be enabled or disabled indefinitely.
Must allow scheduling to automatically enable and disable a modifier.
While a modifier is enabled all Orders created during that period will contain the active modifiers.
Modifiers can still be applied to specific Orders even if the modifiers is not currently active for a given restaurant.
Managers should be able to respond to changing conditions in real-time.
Delivery Fee Transparency
Show current modifiers added to the Delivery Fee on the Cart.
Increase clarity and transparency for guests.
Users want to know the details of the fees they are paying.
RBI wants to be transparent with guests regarding detailed costs.
Detailing costs has a positive impact on guests' perception.
Analytics Tracking of Fee Modifiers on Orders
Must be able to track and analyze Orders created with fee modifiers to gain insights into their adoption and effectiveness.
Analytics must contain all modifiers added to the fee, their configured value, and the value added to the Order Total.
Audit Trail for Fee Modifiers changes
Must have a log of modifier changes for auditing purposes.
Must be clear if the change was manual or automatic (scheduled)
Changes include:
Modifier created
Modifier removed
Modifier value configuration updated
Modifier activated or deactivated for a given restaurant (manual or automatic changes).
Show Fee Modifiers on the Support Tool
Support Operators need all detailed information on Guests Orders
Fee modifiers applied on Orders must be shown in the Support Tool.
❓ Open Questions
Are these new fees going to affect how the Service and Delivery Fee Services currently work (nowadays different tiers are established depending on the cart's value)?
Are these new fees going to be considered as an extra fee (Eg.: We are going to display individually Service Fee, Delivery Fee, High Demand Fee) or are they all these new fees part of the Delivery Fee?
What type of fees are there?
Are each fee going to have its own tiers as Service and Delivery fees do (be dynamic) or are they always a fixed fee?
What price corresponds to each fee?
When should the system activate them?
Do the rates have legal correspondence?
Who requests these fees?
If the user is a loyalty user, does he/she also have these rates?
Do these fees also exist in the aggregators? The user could compare.
Do we want to inform about the fees one by one individually or can it be in a group?
Are we informing the fees only in the cart?
Are there conflicts between them? If one is active, does activating another deactivate the first one?
Should we think about the limit of fees we are charging at once? Imagine that we have bad weather, an event occurring in that city, it's Saturday and the customer it's far away (+Delivery Fee + Service Fee). Are we going to charge all of them? Because it will considerably increase the cart total and may discourage the user to continue with the purchase.
Is there a way to avoid this rate? Example: if I buy more products, can I avoid being charged? (I must inform the user)
Are we sure we want the user to know every detail (fee tiers and types of tiers that exist) of how the dynamic fees work? Doesn't this have a huge impact on the users that we should measure before?
Can each restaurant define the price of each fee? Ej: Fee for friday, there is an invertalo between 1o€ and 20€, each restaurant can define how much they want to charge
When we are talking about “Fees modifiers setup", are you referring that this setup is going to be done through Sanity?
When we are talking about “Fees modifiers management", are you referring that the management is going to be done through DOP?
NOTES
About the Dynamic Delivery Fee
The key requirements are:
Service Fee for Cash Payments (To be defined)
An additional fee would be charged for delivery orders paid in cash due to the associated costs and effort. Paula is not sure if thats legal to charge.
Late Night Fee
An extra fee would apply during late-night hours, for example, starting at midnight, due to the higher operational costs during these times.
Delivery Fee - Weather Conditions
An additional fee would be charged during adverse weather conditions affecting certain regions, as operational costs increase in such situations.
Delivery Fee - Distance
An extra fee would be added based on the distance between the user and the restaurant. Customers farther from the restaurant would pay more than those closer.
Priority Fee / Fast-Track Order
An additional fee for prioritizing the order’s preparation and delivery.
BK Prime (Future Feature)
A separate feature, not being explored now, where users would pay a monthly subscription fee to receive greater discounts on delivery fees.
Leadership and Collaboration
Jose Lesama will lead and collaborate on the Dynamic Fee and Order Priority initiatives.
Specific alignment meetings will need to be scheduled with him.
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