In today’s world, customers are ordering online and eating off-premise more than ever before. Approximately, 60% of consumers order food online at least once a week and the market is expected to grow 10-20% globally over the next decade, from $35B to $365B annually. It’s important to not only decide if online ordering is right for your restaurant but weigh all the services that are available to determine if they are a good fit for your business.
As technology is built into the core of most restaurants, alternative revenue channels, and accessibility to food have changed the landscape of the industry. Food Apps came in and swept the market of a lot of small businesses, Uber Eats, Grubhub, Postmates, Doordash and more food apps came to the rescue of the sales of restaurants and to help them to save money.
Restaurant owners have the desire to grow, be more competitive and generate more revenue, and food delivery apps seem like a great option to achieve those goals but restaurant owners are usually unaware of the costs of utilizing such platforms and the impact that those commissions will mean to family-owned and medium-sized restaurants.
Unfortunately, for restaurant owners: nothing is ever actually free. And in the case of food apps, the promised benefits come with a very bad catch: the outrageously steep commissions they charge restaurants. Read more about it
Since Grubhub services thousands of restaurants in each city you will have to pay higher commission fees to advertise on the platform so that guests can find you. Grubhub, along with other third-party services, doesn’t share guest information with the restaurant, which means that restaurants cannot market directly to their customer base to drive loyalty and incentives.
Cost: Grubhub is a commission-based model of up to 30% per order.
DoorDash has a crowded marketplace that can prevent guests from seeing your listing and choosing you. Restaurants pay more per order to advertise on the platform and increase exposure.
Cost: Doordash is a commission-based model of up to 30% per order.
here are a lot of restaurants on the platform and include national franchises which can overshadow your restaurant since high commission fees and partnership costs are manageable in their larger budgets.
Cost: Uber Eats is a commission-based model of up to 30% per order.
Photo: 2640 Media Example Website
Your Brand and Reputation
This issue wouldn’t be so bad if the cost of admission to these food apps was offset by the high amount of new customers that, supposedly, discover and order from your restaurant. However, by handing control over your transactions to the apps, restaurants are losing more than cash—the Apps also rob them of their customers.
First, the restaurant’s competitors are also on the same online food apps, competing to reach the same audience. And a competitor may choose to pay more to appear higher in their search to outrank their competition.
Second, restaurants are also forfeiting their ownership over valuable data such as customers’ email addresses and demographics. For example, GrubHub’s collects and maintains this data, and is free to do whatever they want with it—including soliciting new businesses.
A better way to keep control of your orders, client information and brand is to transition your restaurant to online ordering, all those high fees that you are paying to food delivery apps will go directly to your restaurant.
According to the Off-Premise Insights’ 2018 Takeout, Delivery and Catering study, 82 percent of customers blame the restaurant and not the driver or the ordering app.
Not only do restaurants have to field the complaints, but they also get backlash on social media, too. Research has shown that reviews including the word delivery are worth less than two stars on average. For small, local restaurants, a handful of negative reviews can be enough to have a measurable impact on their bottom line. And it can take months of positive four- and five-star reviews before they recover their reputation.
Create Your Own Online Ordering on your website
In the long-run, it is less expensive for restaurants to invest in their own website online ordering than continue to get hit with 30+ percent in transaction fees.
But that’s not the only benefit of taking your menu online, you can also:
Make taking orders easier than ever. There’s no jumping between tablets or emails, all of your orders come through one platform in a standard format. It also reduces the need for staff to handle customer orders by phone.
Increase customer loyalty. Because you can track which customers order what, you can accurately reward customer loyalty and encourage customers to order again and again.
Improve your marketing. When customers order through your website, you get their details meaning you have the opportunity to re-market to them in the future.
Improve the customer experience. You’re in charge of everything meaning you can accurately set expectations, show the customer how much you care, and ensure they are happy.
Reduce the risk of error, there’s no confusion and little risk of getting the order wrong.
Check if your website is working? Simply put, are your customers able to place an order on your restaurant website from mobile and laptop easily. If not, they will use food apps.