As Delivery Meal Kit Services Pull Back On Promotions And Attempt To Tighten The Bottom Line, Sampling Of Multiple Services Has Slowed, But Are Customers Becoming More Loyal Or Are They Leaving The Delivery Meal Kit Ecosystem Altogether?
The delivery meal kit industry retains customers like a colander
For delivery meal kit services, like any subscription business, customer retention is the name of the game in order to make customer acquisition costs worthwhile.
The major players, HelloFresh and Blue Apron, continue to spend heavily on promotions and advertising to fuel the influx of new customers keeping the industry alive: during Black Friday this year, HelloFresh and Blue Apron offered $90 and $80 respectively off the first four boxes with free shipping.
M Science research estimates however that the delivery meal kit industry as a whole could be losing customers about as quickly as it acquires them. Increasingly, data suggests customers may be quitting meal kits altogether rather than taking advantage of aggressive promotions to sample another service.
Before 2019, the share of active meal kit customers who had sampled at least two services had been growing at a steady clip according to M Science research. As growing churn seems to be taking a bite out of the industry as a whole however, the trend of customers sampling multiple meal kits appears to have reversed.
If customers are losing their appetite for delivery meal kits in general, it begs the question of what companies or industries are earning their food budget in replacement? Significant growth in delivery aggregators, grocery delivery, and recently, prepared meal delivery indicates that convenience has likely been the largest food trend of the past decade.
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