“The Superbowl commercials from the third-party delivery providers were infuriating. They do NOT support local restaurants. They are continuing to perpetuate this false narrative. The reality is they are predatory vultures – and it goes beyond the fees.”- Kyle Inserra, Restaurant Growth Strategist and Hospitality Thought Leader
Statistics from UBS Evidence Lab denote that, in the USA, online sales for restaurants and hotels increased by almost 60% by the end of Nov’2020. The staggering figure alarmed restaurateurs who sustain in this industry via “dine-in” only. Commission-free delivery is definitely their best resort in terms of affordability, management, and productivity.
There is a huge groundswell in the hospitality industry that is bucking against the high commissions charged by third-party delivery market places, it is nearly impossible for small & medium-sized brands to generate profit due to working from low margins. It is now possible for a restaurant of any size to move to direct orders, keep their customer data, as well as generate more profit from each order.
Lunchbox, a digital savior for restaurants and the creator of NotGrubHub, quotes, “… most restaurants actually LOSE money to third-party apps? Ordering directly from the restaurants you love is the no.1 way to actually help save them.”
Click here to view our free Delivery Commissions calculator to see how much restaurants pay over a year when using third-party delivery market places.
Adopting new technology is a challenge for any business so let’s break it down into practical, actionable steps. Starting with online pick-up orders we will talk through choosing the right online menu solution, menu optimization, and social media marketing.
Jen from @harvestbrooklin comments, “95% of all our guests have adapted to online ordering for dine-in and takeaway.”
Moving curbside orders from over the phone to online is the easiest place to start for any brand worried about guests and staff alike adopting new technology. Hence, start by choosing a web-based ordering solution designed for restaurants and made for mobile. We mention a few in the next section.
Let your staff know this will reduce the admin required to manually enter phone orders into your POS. They will also have insight into setting up your menu as they will have an idea of the most popular pickup orders. There is a better use of their time than spending 3 minutes on the phone when a guest would prefer to order from their mobile using an online menu.
Post your menu on social media and let your guests know they have the option of your own ordering app. Also, it is highly vital to start promoting direct orders to promote in-house commission-free delivery. Explain how this supports you directly. If you are using an answering service during high volume orders then inform guests how they can hang up and start their order via your menu app. Offer a discount or special menu option for direct orders.
Gradually, when the regulars start to use the online system for orders, the restaurant can permanently remove the phone order option.
⊕ Pros
⊗ Cons
Following the valuable insights from Alex Canter, the chief executive of Ordermark who mentions, “Oftentimes, the restaurants weren’t set up for delivery — they don’t really have menus that are designed for takeout or delivery,” it is well-understood that by implementing a commission-free delivery solution for restaurants, every restaurant can use its dynamic ordering application to curate their online menu that highlights their top-selling items.
Dynamic ordering applications such as Orderlina, lunchbox, Square POS, and chownow provide seamless order customization to restaurateurs and hotel owners. Moreover, by partnering with these digital applications, direct delivery restaurants have the flexibility to not only change their menu options whenever they want to. Also, they get the opportunity to manage in-house delivery and pick-up without having to pay the hefty commissions to third-party food delivery platforms.
An exception, and challenging the third party delivery model, is LoCo Co-ops. Such platforms start at less than half the commission of third-party solutions and the co-op distributes the net income back to the restaurants on the platform, which reduces the effective commission even further.
In the words of Jon Sewell, President & Founder at LoCo Co-ops, “The best delivery solution for independent restaurants, one that provides the most cost-efficient, highest customer service product while also protecting their customers’ data, is for the restaurants to develop their own delivery co-operatives.”
⊕ Pros
⊗ Cons
Will Shu, CEO of Deliveroo has a famous scene in the Netflix Series, Million Pound Menu, where he tests a restaurant’s meals to see if they are delivery-ready. He pops the meal in a heat bag and rides it around on his bike for 7 minutes, the average delivery time. Start by ensuring your meals travel well.
Grubhub revealed their most ordered menu items from Jan to June’2020, Surprisingly, there is no mention of the delivery of hot beverages, when tea, soup, are common appetizers that customers order when they dine-in. The giant food delivery app throws light on the below factors while drafting a delivery menu.
Commission-Free delivery and pick-up restaurants should optimize their online menu by promoting top picks and specials. Or, as Scott Landers, Co-Founder of Figure 8 Logistics quotes, “offer an experience they (guests) can’t get anywhere else.” This also has the effect of moving customers off third-party delivery apps to direct orders.
⊕ Pros
⊗ Cons
Restaurants have the choice of in-house drivers. While many restaurants have converted serving staff to become delivery staff, most restaurants will find taking on logistics difficult.
While planning the logistics part of the in-house commission-free delivery and pick-up system, restaurateurs may not be aware of “Last-Mile Delivery Solutions.”
Drive Yello, one of the key players offering Last-Mile Delivery Solution in Australia. It connects businesses to drivers. Hence, with the help of such platforms like Yello, Lyve, and Relay that use advanced technologies for same-day deliveries, venues are able to outsource logistics passing the cost onto the consumer.
Third-party delivery apps are an easy, convenient solution but a race to the bottom forcing the restaurant to work from impossible margins. Moreover, direct orders or in-house commission-free delivery allow the restaurant to grow its brand and have direct control over its product and customers. They are not giving away their customer data to a delivery market-place.
⊕ Pros
⊗ Cons
Hotels. Restaurants, eateries, and stalls all use social media to promote their brands. The best way to grow a social media following is to have your guests do it!
Ensure you are using an online menu solution that has integration with social media. This should provide the option for guests to share your menu, take orders directly from social media with limited clicks. The easiest place to start is to add the Start Order button on Facebook and a link to your menu, a.k.a link in bio on Instagram. Additionally, the online ordering solution should provide the flexibility to allow guests to immediately order. They can do so while linking to your website or other ordering solutions. See how we’ve used our menu on our Instagram. Also, check out our complete guide on connecting your QR Menu to your social media.
⊕ Pros
⊗ Cons
A review of a chef turned eatery owner, published on Restaurant Confessionals, explains how demotivating it has to read unjustified comments of a marketplace that they own. To quote him directly, he mentions, “Our restaurant has received plenty of good press but, at this point, it’s been a little while since we’ve been reviewed. So, some Yelpers are responding to a dating review from a few years ago and expect that exact same meal.”
Google reviews and Yelp has public reviews of multiple direct delivery restaurants from around the globe. And not all reviews come from personal experiences. Some result from preconceived notions and other bad reviews that guests read before they order from a restaurant.
Little do people realize that ‘one bad review literally ‘destroys the image that the business built over so many years.
QR Menu and online ordering solutions should provide a closed-loop for feedback. Feedback is direct from the guest and straight to the restaurant manager. Hence, this gives the opportunity for the restaurant to deal with the issue directly. They can even post their best reviews on social media.
To further avoid the chances of being judged on Google reviews or Yelp, include options such as ‘Feedback,’ ‘How can we improve,’ etc. And remember to respond to every feedback positively, coz only then will the loop be closed efficiently.
Sending a tactfully crafted email for feedback after every online delivery also converts a detractor into a promoter. That way, the guest feels important, and their probability of ordering again increases.
⊕ Pros
⊗ Cons
Scott Landers, the Co-Founder of Figure Eight Logistics, a consulting group for food delivery, gave the best insight in an article published in QSR Magazine. To quote him, he said, “If a restaurant does not currently have a branded online ordering channel, now is the time to build one.”
He went further to say that if brick and mortar restaurants do not cut in on their dine-in space rent, the probability of them surviving becomes quite skim, even if they’re a direct delivery restaurant.
Partnering with a commission-free delivery platform seems feasible for big players who generate enough profit; however, for small scale, and medium-sized eatery houses, combining dynamic ordering applications such as Orderlina, and lunchbox, and last-mile delivery solutions are reliable choices depending on where you are located. So, you are taking the right step by planning on moving your dine-in to in-house commission-free delivery and takeaway.
In the words of Kyle Inserra, “If you really want to” save restaurants” – next time you order food – call the restaurant directly or check their website and see if they have their own delivery.”
