For the last two years, delivery has morphed from an optional choice to a necessity for restaurants nationwide. Pre-pandemic, third-party delivery options made up just 7% of total restaurant sales in the US, but now cover almost 10% of sales. Despite this increase, the current delivery ecosystem is unsustainable for many restaurateurs. Third-party delivery providers charge restaurant fees as high as 30% per order, and these extra costs slash deeply into the already razor-thin margins. To meet both customer demand for delivery and make it a net positive, restaurants need to own the delivery process.
What do customers like about third-party apps anyway?
Despite the extra fees and negative viral experiences with delivery apps, the online food ordering industry is forecasted to reach a valuation of $365 billion by 2030. This 20% increase on its current valuation can be attributed to the fact that third-party delivery apps have perfected the art of ordering by providing transparency at every turn.
- When ordering through first-party apps, wait times can jump from 20 minutes to an hour with no explanation. These anxieties around food delivery can sour the customer experience and make them less likely to re-visit an app to place their order. These inconsistencies are also bad for the restaurant. Further, it's bad for business not knowing where your drivers are or when they'll deliver food to the customer.
- In addition, the lack of integration with a POS means restaurants can't maximize their customer data to identify areas where improvement can be made. This gatekeeping around customer data makes it more difficult to build an understanding of the customer base and deepen their relationship with the restaurant.
- Companies like UberEats and GrubHub provide up-to-the-minute updates on the location of the driver and status of the order, easing customer concerns. Additionally, the ease of contacting customer support reduces the customer's feeling of risk. What these apps provide – and what restaurants need to embrace when building their own ordering platforms – is transparency.
How can restaurants compete on transparency?
- Third-party apps have set the expectations for what customers want within an online food ordering experience. First-party solutions must match these levels of transparency to gain trust and keep the customers coming back. The three key provisions that customers expect with a food ordering system are:
- Delivery time estimates.
- Clear order delegation.
- Real-time tracking of drivers for customers and the restaurant
These three pillars are the foundation of an ordering experience that customers will love and return to time and time again. Building these platforms can take time, but there are a few strategies that can make establishing or expanding first-party delivery more feasible:
- Be open: the online ordering website or app should include all the nutritional information related to each menu item. A short description of the meal coupled with allergy and diet considerations should be included for each menu item.
- Share everything: customers crave and expect to be able to track their order from the kitchen to the doorstep. Real-time order tracking through Google Maps is a great way to provide this feature.
- Manage your drivers: hiring drivers as restaurant employees directly makes it easier to design a system where you can better process, track and manage orders. The faster they can deliver an order, the better it is for the customer and the restaurant. Incentivizing delivery for drivers with a pay-per-order or pay-per-mileage bonus scheme can be an easy way to promote efficiency.
As more restaurants embrace in-house online ordering and delivery systems, third-party apps will lose their stranglehold on the industry. An astounding 70% of customers say they would prefer to use a restaurant's own app or website to place their orders, so there is already a desire for more first-party options in the market. Executing this expectation means meeting customers where they already are by providing features they expect and services they can trust. Navigating the changing world of restaurants is no easy feat but keeping an excellent customer experience at the forefront is key to winning the game.