How Direct-Channel And Third-Party Food Delivery Can Drive Your Business
It is hard to deny the major impact that third-party delivery is having on the restaurant industry. What some call the “off-premise revolution”, is officially here to stay. Off-premise orders are beginning to account for a larger share of restaurants’ sales. So, what is your restaurant waiting for?
Direct Channel vs Third-Party Food Delivery
There are benefits to having in-house delivery options, however, if that is your only ordering channel, you are missing out on potential customers. According to the market research team at Zion & Zion, 63% of young adults are using third-party delivery platforms to find restaurants and order food. Millennials continue to lead the charge as the most frequent users of third-party delivery; Gen-Z being a close second.
Manny Picciola, Managing Director at L.E.K. Consulting and co-author of Meals on Wheels: The Digital Ordering and Delivery Restaurant Revolution, explains that, “millennials are a driving force behind the growth of digital ordering and delivery. We expect them to account for a full 70% of the at-home delivery business by 2020.” This group averages 10% more restaurant visits each year compared to those who are not using third-party ordering. Rather than replacing the dining experience entirely, third-party marketplaces have introduced a new dining experience to those who frequent their platforms.
Third-Party Food Delivery Market Leaders
The average consumer has two delivery apps on their mobile device and use them on average three times per month. Technomic describes how consumers have different spending profiles depending on which third-party platform they typically order on. The high-end of the average spending range is just over $42 per basket. If you’re wondering which third-party apps are the most popular, it’s to no surprise that they are the big 5.
These are a great place to start your search. Whenever you decide to add-on a new service, it’s a good idea to research the best fit for your restaurant. There are a few factors to consider when deciding which platforms to implement. Start by surveying your area. Find out which platforms are being used the most by your typical consumer and which platforms your competitors use. Last, look at which third-party online ordering services you see yourself using the most! After going through these steps, narrow down your list of top contenders to determine which one’s hold the largest market in your area. Now you’re ready to put your delivery strategy into effect!
How to Make Delivery Count
Have you wondered how third-party delivery can make an impact beyond online sales? There are ways that restaurants can use third-party online ordering insights to increase overall profitability and improve the customer experience.
Dig Into The Data
The word data can be intimidating. It can drive individuals away from analyzing readily accessible metrics. Restaurant operators have access to delivery platforms insights that are beneficial for a variety of reasons. Operators can evaluate customer spending habits to give them an inside look at customer behaviors. They can use that data to target new customers. Restaurants then can create advertisements and generate marketing initiatives to appeal to that audience.
Data also gives restaurant operators an inside view of metrics surrounding menu items. They can determine which items are most popular, what are their busiest times, and what is the order lead time once received. This allows businesses to keep up with demand while preventing excess inventory from going to waste; ultimately improving the restaurant’s bottom line. These simple data trends can ultimately improve operations and increase profitability.
Increase Brand Awareness & Visibility
Picture this: a person is sitting on their couch, hungry, and desperately needing food. So, what do they do? They grab their cell phone sitting nearby and start aimlessly scrolling through their third-party app of choice. They come across a few places that look decent, but still are waiting for something to spark their interest. Since only 54% of consumers open third-party delivery apps with a specific restaurant in mind, they take their time and continue to scroll. They notice a restaurant on the list that they haven’t had before. Soon after, they place an order.
Now, as a restaurant operator, you want to be the restaurant that a customer will choose. Being on a third-party ordering app leverages an opportunity to stand out amongst new and old customers alike. These platforms provide your restaurant increased visibility, leading to heightened brand awareness. Today’s marketplace is extremely competitive and the last thing a restaurant operator wants is to give their competition the upper hand. If your competitors are accessible on third-party ordering services, they are reaching potential customers that your restaurant might miss out on. By signing up on third-party marketplaces, restaurants expand their customer base, and give them the opportunity to experience what your restaurant has to offer.
We hope you learned how online ordering can drive your business. After kick-starting your delivery channels, the next step is to streamline the process with Chowly’s integration. We make it easy by integrating online orders directly from the third-party platform to your POS system, going straight to the kitchen. This eliminates manual order entry, saving you time and costly labor. Your delivery strategy isn’t complete until you have an efficient process in place.
For more information, visit www.chowlyinc.com