Hungry for the Holidays: Third-Party Restaurant Delivery Services in the Age of the Pandemic

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Hungry for the Holidays: Third-Party Restaurant Delivery Services in the Age of the Pandemic

Whether you’re offering fast food or grande cuisine, there is a food delivery service waiting to take your fare to the masses.  And this pandemic holiday season, perhaps more than any other, are likely to see food delivery orders skyrocket. Is your restaurant ready to capitalize on the windfall?

Where once delivery was a service largely reserved for fast casual restaurants to provide themselves, now there are multiple third-party options that allow restaurants to forego the expense of delivery drivers, vehicles, insurance, licenses, training, etc. These services — led by Uber Eats, GrubHub and Doordash — are happy to deliver yogurt, coffee, or donuts as well — from franchise or one-off — whatever’s on the menu. Which means that as a customer, you can uber your grub right to your door from virtually any restaurant that wants to set up the service. So — as a restaurateur — should you jump on board this trend  Here are some of the advantages to consider.

The first one is convenience — to the customer, that is. Your customers have access to their delivery apps right on their phone. And they’re all set up to pay, which means the ordering process is just selecting items on your menu, then a tap to approve. You want as few barriers between the customer’s desire to dine and payment approval, and that’s what delivery service apps provide.

Another benefit of the phone app is familiarity. We are creatures of habit, and when we like an app, we tend to use it frequently. Third-party delivery service apps tend to do a good job of reminding the customer where they’ve recently dined, and prompting them to consider buying again from a provider they know. Voila — instant repeat business.

In addition, third-party delivery apps can also broaden your customer base significantly — to diners who wouldn’t have traveled to your location, who might not have considered your menu’s theme, or who just had not come across your restaurant on the channels that you typically use to promote.  Certainly, they’re great for new concepts just coming online — but they offer an established, built-in new business marketing tool for any restaurant.

As difficult as 2020 has been for the restaurant industry, one thing it has done is push consumers to find ways to continue enjoying their favorite restaurants. The necessity of curbside pickup or delivery for much of the year in many places nationwide has facilitated an increased comfort with the use of delivery apps that will likely persist, even after the pandemic subsides.

To be sure, the pound of flesh imposed by these services can be difficult to stomach — sometimes 30% or more of each check.  Some charge less, but have a monthly fee — $79, in the case of Chowly. Either way, delivery is here to stay — especially after the pandemic year. So let’s look more closely at the numbers.

The year-over-year growth of the third-party delivery category is remarkable — more than 20% in 2019.  And while three quarters of all deliveries are still carried out by restaurants themselves, the addition of a third-party delivery service is estimated at increasing profits 10-20% for restaurants, on average.  And with 30% of Americans ordering for delivery every single week — it makes sense that delivery can help the bottom line for many restaurants.(1)

However, if the over/under on third-party delivery services does not seem right for your concept, what can you do? One solution is to set up an online ordering system on your own website, to forego part of the cost of third-party services. This way you capture the order yourself, and have only the delivery portion to facilitate.  Certainly you may use a third-party service as well to set up online ordering on your own site — albeit for a savings over Uber Eats and the like.  Or hire a web developer to create one for you.  Another solution, however, is to use a cutting edge POS, like Alpha POS Services, which offers online ordering as part of its package of solutions. Alpha’s online ordering integration is seamless, affordable and comes from a provider you may already know and trust. The cost savings of your own online ordering system can then be recouped by your restaurant directly.

However you go about online ordering and delivery, what is certain is that your customers are sitting at home for the holidays with less to do than in typical years. If you are not capturing business from the audience of diners who want the convenience of online ordering and maybe also the uber convenience of delivery to their door — you are missing out on a portion of your potential profits.

NOTES:

1. “2020 Food Delivery Service Statistics You Need to Know,” Town Square, 10/5/20, https://beambox.com/townsquare/food-delivery-service-statistics.

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