“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 show that, in the U.S., online sales for restaurants and hotels increased by almost 60% by the end of November 2020. The staggering figure was alarming to restaurateurs with business models that depend upon dine-in guests as it proves there is a viable alternative for keeping sales up despite the ups and downs of the pandemic. Implementing a commission-free delivery system is their best bet 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 the popular third-party delivery apps. It is nearly impossible for small- and medium-sized brands to generate profits when using these due to already-tight margins. It is now possible for a restaurant of any size to move to direct online ordering, allowing them to retain customer data and generate higher profits from each order.
Lunchbox, a digital savior for restaurants and the creator of NotGrubHub, states, “Most restaurants actually LOSE money to third-party apps. Ordering directly from the restaurants you love is the number one way to actually help save them.” Click here to view our delivery commissions calculator to see how much restaurants pay over the course of a year when using third-party delivery marketplaces.
Adopting new technology is a challenge for any business, so let’s break it down into practical, actionable steps. Starting with online pickup orders, we will talk through choosing the right online menu solution, menu optimization, and social media marketing.
Alex Canter, chief executive at Ordermark, offers valuable insight when he says, “Oftentimes, the restaurants weren’t set up for delivery — they don’t really have menus that are designed for takeout or delivery.”
By implementing a commission-free delivery solution for restaurants, every restaurant can curate their online menu to enable streamlined ordering for customers while also highlighting top-selling or high-margin 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 change their menu options whenever they desire. Also, this system provides the opportunity to manage in-house delivery and pickup without having to pay the hefty commissions to third-party food delivery platforms.
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.”
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Jen from @harvestbrooklin comments, “Ninety-five percent 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 adopting new technology. Start by choosing a web-based ordering solution designed for restaurants and made for mobile. We mention a few options in the next section.
Let your staff know that this will eliminate – or at least reduce – the time and attention required for manually entering phone orders into the POS. They will have insight into setting up your menu as they will have an idea of the most popular pickup orders and the nuances of entering special requests or discounts. There is a better use of their time than spending three minutes on the phone when a guest would prefer to order from their phone using an online menu.
Post your menu on social media and let your guests know they have the option of ordering directly from your restaurant over the web. It is vital to start promoting this direct ordering option as part of the move to in-house commission-free delivery. Explain how this supports you directly.
If you typically use an answering service during peak periods, consider adding an automated message to inform guests that they can more quickly order via your restaurant online ordering system before transferring the call to the answering service. Eventually, you will be able to get rid of the answering service entirely.
To encourage adoption, 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.
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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 seven minutes, the average delivery time.
Every restaurant needs to ensure its dishes travel well.
Grubhub revealed their most-ordered menu items from January to June 2020, and surprisingly, there is no mention of the delivery of hot beverages despite tea and soup being common appetizers that customers order when they dine-in. They go on to share these factors to consider while drafting a delivery menu:
Commission-free delivery and pickup restaurants should optimize their online menu by promoting top picks and specials. Or, as Scott Landers, co-founder of Figure 8 Logistics suggests, “Offer an experience [guests] can’t get anywhere else.” This also has the effect of moving customers off third-party delivery apps to direct orders.
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Restaurants often consider the default option of hiring in-house delivery drivers. Most restaurants will find taking on logistics difficult, although many restaurants have successfully converted serving staff to delivery staff.
While planning the logistics part of an in-house delivery system, restaurateurs should be aware of “last-mile” delivery solutions that are completely compatible with direct online ordering systems.
Drive Yello is one of the key players offering last-mile delivery solutions in Australia; it connects businesses to drivers. With the help of platforms like Yello, Lyve, and Relay that use advanced technologies for same-day deliveries, venues are able to pass the cost of delivery to the consumer and the
“problem” of logistics to a company that perhaps does it better. This allows the restaurant to retain control of the ordering, payment, and feedback process while outsourcing the actual logistics aspect.
Third-party delivery apps might be an easy, convenient solution for outsourcing, but they’re also a race to the bottom, forcing restaurants to compete with other local restaurants in a time of shrinking margins.
Direct ordering with in-house commission-free delivery systems allows your restaurant to grow its brand and have direct control over products and customers while not giving away their customer data to a delivery marketplace.
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Hotels, restaurants, eateries, and the like all use social media to promote their brands. The best way to grow a social media following is to have your guests do it for you!
Ensure that you are using a restaurant online ordering system that integrates with social media. This should provide the option for guests to share your menu as well as take orders directly via social media with limited clicks.
The easiest place to begin is to add the Start Order button on Facebook and a link to your menu (e.g., link in bio on Instagram). Additionally, your direct online ordering solution should provide the flexibility to allow guests to immediately place an order and process their payment.
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.
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An interview with a chef-turned-eatery-owner published on Restaurant Confessionals explains how demotivating it is to read unjustified criticism of a venue. To quote him directly, he says, “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 dated review from a few years ago and expect that exact same meal.”
Google reviews and Yelp have public reviews of direct delivery restaurants from around the globe, but not all reviews are based on unbiased experiences. Some result from preconceived notions based on other reviews that guests read before they ordered from the restaurant. Little do people realize that one bad review literally destroys the image that the business built over so many years.
To remedy this, a restaurant online ordering system should provide a closed loop for feedback: Comments go directly from the guest to the restaurant manager. This gives the opportunity for the restaurant to deal with the issue directly and the customer feels as if they said their piece without publishing it in a public manner. Restaurants may still opt to post their best reviews on social media.
Include options such as a feedback button or emails asking “How can we improve?” Remember to respond to every feedback positively to keep that feedback loop effectively closed.
Sending a tactfully crafted email requesting feedback after every online delivery can convert a detractor into a promoter. The guest feels important, and their probability of ordering again increases.
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Scott Landers, 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.”
Partnering with a third-party delivery app seems feasible for big players who generate enough profit; however, for small-scale and medium-sized eateries, combining a commission-free delivery platform such as Orderlina and lunchbox with last-mile delivery solutions is a lower-cost, reliable choice. So, you are taking the right step by planning a move 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.”
