How we eat has changed dramatically in the past few years. Fueled in part by Covid, the food delivery market has more than tripled since 2017. In 2020, the European food delivery market was with $13.8 billion – and that number is predicted to grow to nearly $21 billion by 2026. Much of this growth has been fueled by the myriad food delivery apps that have sprung up and simplified the order and delivery process. While this has been seen as great news for businesses and consumers, there has been a curious and not always welcome side effect: smaller, non-franchised restaurants, such as pizzerias or your locally-owned favorite Italian, are connecting themselves to one or more of the delivery companies and in the process, they’re not only losing control over their orders and brands, they are also losing money.
Digitalizing the Food Industry With IoT
“The delivery platforms are very expensive for individual restaurants,” explains Daniel Lindau. “They take around 30% of the revenue of every order and this costs the restaurants a lot of money. With Lumit, they can still be on the big delivery platforms, but they can also wrest back control of their brand while moving customers back towards interacting with them directly.”
Why is this important? If you look at the numbers, the delivery companies take around 30% of both the cost of the order and the delivery fee. In real terms this means that if you order a pizza for 100 SEK (roughly €9.50) and the delivery fee is 50 SEK for a grand total of 150 SEK, the delivery platform will take around 80 SEK of that total. This can kill the restaurant’s profit margin, particularly if they’re a small player.
“I think, though, that the big delivery companies have done a great job and I don’t fault them,” says Daniel Lindau. “In fact, they’re the best thing that could have happened to us, because they trained our restaurants and informed them that they needed to be digital, so it made things easier for us when we entered the market. Some of the big delivery platforms are trying to replicate what we’re doing, but they haven’t really been successful yet, so we know we’re on the right track.”
Lumit has been in operation for less than two years and is already in 90 cities around Sweden. Their growth has been swift – so swift, in fact that they are doubling their revenue every eight months.
How Lumit works with IoT
Lumit is not about the delivery service itself, it’s about digitalization. The company wants to be 100% digital – they don’t see the food, they don’t touch the food – they simply create a digital service that supports their restaurants and allows them to take back their power and brand.
“We’re really good at digitalizing those companies that are ‘un-digitalizable’,” says Daniel Lindau. “We have a lot of customers where we said to them, ‘Oh, you don’t seem to have a website’ and they responded, ‘But I do have a website’. But when they googled their website to show us, the box that pops up on the right side of google is what they call their website. So, they don’t always have a high level of knowledge about digitalization, so we help them with that. We get in there and make sure they digitalize and market themselves online – this is our niche and it’s what we’re good at.”
Without IoT, Lumit wouldn’t be able to function. The Lumit Terminal is provided to all of their customers. Inside, there is a Tele2 IoT connection and SIM, which is pre-installed. When the restaurants receive the terminal, they simply press ‘power on’ and it connects to Tele2 IoT connectivity, installs everything, and starts working, no matter where they are.
Via the terminal, restaurants get a notification when there is a new order and if they accept that order they get a sort of receipt – we call it a ‘bong’ – which tells them what food has been ordered and where to deliver it. They can also get reports and accounting information emailed to themselves using the Lumit device, such as how many deliveries, how much revenue, etc. which can all be forwarded to their accountants, making that process very streamlined.
“We have also automated the money flow,” explains Daniel Lindau. “We have our own connection with the banks, so every week the money being paid out to the restaurants is automated, which means there are no manual errors, and we are able to do this at scale, with not a lot of manpower.”
When it comes to managing their SIMs, Lumit uses 2CONTROL (Cisco IoT Control Center) to monitor the SIMs and track all data being used, as well as to get average data usage. If a terminal deviates from the norm, Lumit gets an alarm that there might be a problem and are able to quickly investigate.
“We also had some customers who took the SIM card and put it in another device in order to have fun on their tablet,” laughs Daniel Lindau. “The Tele2 IoT team helped us create an alarm so that we can see if this is happening and deactivate the SIM card if it does. These kinds of things are great for us because we rarely visit the restaurants, so to be able to remotely turn off and turn on or lower or raise things remotely – it supports our digitalization model really well. It’s amazing – we went from a retail focused provider to IoT – the support, the uptime with no downtime at all, creating settings – it’s been really positive and great for what we’re trying to do.”
Lumit uses Tele2 IoT for the connection and then sends data to their network inside AWS. When it comes to GDPR and data protection, they use data only for the defined purpose before removing it. Data is secured and encrypted and sent via secure channels and tunnels. The restaurants do need some data, like an address and the food order in order to function, but that data remove it as soon as is necessary.
Lumit is still scaling so the focus is on their core business. They want to get it right, especially because they’re experiencing such explosive growth.
“We are taking everything step-by-step,” explains Daniel Lindau. “One of the reasons we chose Tele2 IoT is that we know we can expand with the company, and it will support future efforts in that area. Currently, we’re talking to Tele2 IoT about switching to national roaming, which would be amazing since some of our customers are more remotely located, and this will ensure they always have the best possible connection. And when we’re ready to move outside of Sweden, Tele2 IoT’s roaming will be crucial to our plans.