As a restaurant operator in 2019, you’re probably being bombarded with the latest and greatest online ordering and delivery platforms. While they make promises of increasing your business, they’re also wanting 25%+ commissions. You might be thinking “25%? That’s my whole profit margin..no, thank you!” OR you may find yourself so in love with the idea that you’re not just on one delivery platform, but all of them.
So, what’s the ‘right’ answer here? Should you give up 20+ percent of your margin to get your business on these platforms? If so, which should you choose? What about pickup? Sounds like you could use some clarity.
The ubiquity of smartphones and plethora of apps has created a seismic shift in how consumers discover restaurants and order food. We are ever changing into a convenience economy. Services like DoorDash, UberEats & GrubHub are exploding in response to how consumers want to dine. The bad news is that the invitations to get left behind are multiplying everyday. The good news is, so are the opportunities to reinvent a few things in your own operations so you don’t get left behind.
The fact is, online delivery services are growing.
13.5% in year by year growth of online ordering
Online delivery is expected to account for 30% of the total restaurant industry growth by 2022
79% of millennials (ages 18-34) have ordered food delivery via an app
Millennials are 3x more likely to order food for consumption at home than their parents are
So you may be wondering, will app ordering reduce my dine-in business?
The answer? People, especially millennials, aren’t eating out less, they are cooking less. Because of this, restaurants that have an online ordering experience actually have the chance to capture an even bigger market share. Just 11% of restaurants currently utilizing online ordering apps felt that it impacted their dine-in business in a recent survey. While 67% of customers who have placed an order online will visit the restaurant more frequently than those who have not.
Ok, so you’ve decided you’d like to see how online ordering & delivery services can grow your revenue. Here are the next steps we recommend:
1. Make sure you have your own online ordering platform.
Most POS companies today have an online ordering option as part of their service or as an add-on; you typically just need to pay credit card processing fees instead of commissions. Start by contacting your POS company to see what options are available. Be sure to embed online ordering into your website and add links on social profiles, Google my Business profile, and online review/directory sites Yelp & TripAdvisor. By doing this, customers who already know they want to order from your restaurant will be able to order directly and will save you 20+ percent on commissions. If your POS company doesn’t provide online ordering options, check with third party integration platforms like 411Eat.
2. Sign up for the delivery services available in your market.
We recommend signing up for as many of the local delivery services as possible. While Door Dash, Grub Hub, Postmates, and Uber Eats collectively own 92% of the food delivery market, you may have local companies to put on your radar as well. By being on all of the available delivery platforms in your market, you will have the ability to gain the largest number of orders as a varied percentage of consumers/demographics may use each of the services available. While you will be on a variety of delivery services, we recommend that you do not actually promote their services. Simply let them bring new customers to you. If you’re wondering how to select and promote your delivery partner, keep reading.
3. Pick your delivery partner to link on your website and online profiles.
We recommend selecting the delivery partner that offers the lowest commission rate on orders originating from your website. Once you have made your selection, be sure to use the link they provide on your website and online profiles. Remember, not all online orders are delivery, don’t forget about takeout! We recommend adding an order online/ order pickup/delivery button to your site. Once that is clicked, we recommend prompting your customer to select takeout or delivery. If they select takeout, route them to your internal online ordering system (from step 1), if they select delivery, link them to your delivery partner (example on the next page). By doing this, you’ll be able to offer online ordering and delivery at the lowest possible cost to you.
ProTip: Aggregator services like Chowly and Ordermark will consolidate all orders from delivery services so you only have to manage one source of incoming orders (these services also integrate with a number of POS platforms).
4. Update to-go packaging and marketing materials.
Whether your customers order takeout or delivery, their impression of your restaurant is shaped by the packaging and presentation of your food. Are you still using styrofoam boxes? May be time to consider alternative options. We recommend branded packaging wherever possible. Additionally, offering an advertisement or card with each order that goes out the door promoting your internal online ordering system with a discount for their next takeout order.
EXAMPLE OF AN EFFECTIVE ONLINE ORDERING LINK & PROCESS:
1. Add an ‘Order Online’ button displayed prominently on your website.
2. When Clicked, prompt the customer to select pickup or delivery.
3. Route ‘Pickup’ to your internal/ POS-provided online ordering portal. Route ‘Delivery’ to the 3rd party delivery platform that gives you the lowest commission rate.
RESULTS FROM A RESTAURANT WHO HAS IMPLEMENTED THE STEPS ABOVE. AFTER ONE YEAR:
50% increase in takeout/delivery sales
40% of online orders come through the restaurant website vs. third party sites
Overall $250,000 increase in total sales across 3 locations
We hope this has been a useful guide in how to maximize your profits with takeout and delivery. If you have questions or would like to discuss further, please contact the Restaurant Logic sales team by emailing hello@restaurantlogic.com or by calling 866.846.9353
