Pizza is one of the most popular foods worldwide, readily available in many restaurants and even for delivery. A new study on pizza delivery services has revealed that there is much to be learned from the process of ordering and delivering pizza, offering insights for all consumer-facing businesses.
In a study conducted jointly by Purdue University in the United States and other research institutions, researchers analyzed approximately 98,000 pizza delivery orders from 6,800 customers placed at 51 independently operated pizza shops in a major city in northern Italy between 2010 and 2011.
The research indicates that consumers’ impatience significantly influences their decision-making process, sometimes overshadowing factors such as the location of the shop, prices, and quality.
It was found that consumers’ lack of patience, or their desire for quick delivery, reduces the likelihood of comparison shopping, decreases the substitutability and price competition among sellers, and allows lower-quality suppliers to survive.
These findings challenge the traditional belief that faster delivery expands consumers’ choices and intensifies competition. On the contrary, consumers’ impatience leads to market fragmentation, protecting low-quality suppliers that rely on geographical proximity advantages while limiting the market coverage for high-quality suppliers.
The study highlights that consumers are highly sensitive to waiting times. For consumers in the middle range, reducing delivery time by 50% is valued even more than a 20% reduction in the order price. This impatience significantly restricts market competition, often leading orders towards shops that can deliver the fastest, with the quicker delivery speed often offsetting the advantage of lower prices from competitors.
However, researchers note that when technology significantly shortens delivery times, the market dynamics change—market share shifts towards high-quality pizza shops, eliminating many lower-quality businesses. Thus, while delivery time and consumer impatience shape the market, higher-quality competitors tend to perform better and eventually push lower-quality businesses out of the market.
Federico Rossi, associate professor of marketing at Purdue University, mentioned, “When delivery times are shortened by more than 75%, the situation reverses—market share concentrates on high-quality pizza shops, while many lower and medium-quality businesses are eliminated because geographical proximity is no longer an advantage for those lower-quality businesses.”
The researchers also found that platforms consumers use for decision-making and ordering can capitalize on consumers’ impatience to increase revenue. For instance, a platform offering an advanced delivery service 10% faster and charging an extra fee equivalent to 10% of the base menu price can increase the platform’s profit by 18.7%.
Sara Valentini, marketing professor at Bocconi University in Italy, who was part of the study, emphasized the importance for platforms and marketing decision-makers to understand the dual role of delivery speed.
While the study focuses on pizza delivery, the mechanisms revealed are applicable to any online product sales and businesses relying on delivery channels.
The research findings were published in the journal “Marketing Science” by the Institute for Operations Research and the Management Sciences (INFORMS) in the United States.
When it comes to pizza, receiving a delivery can make you eager to start enjoying it. But do you know the proper etiquette for eating pizza?
Renowned British etiquette expert and bestselling author William Hanson previously mentioned that the traditional way to eat pizza is by hand, hence the crust. “You don’t need to use utensils, just pick it up and fold it inwards,” he said.