WARNING Delivery Apps can be damaging to your wealth

I went to a local restaurant’s website to order a delivery and was informed I could only order delivery through Deliveroo. Having downloaded the app, I entered the restaurant name and was presented with two competitors instead. Left with those or a lengthy walk to collect, I opted for a competitor – my local was paying for that !

The pandemic accelerated an existing trend with online and mobile ordering and payment systems giving customers a fast, personalized and convenient food experience through delivery and/or takeaway.

Platforms like: Uber Eats, Just Eat or Deliveroo can bring you new customers, but as the real life example above shows, they can also take them away.

The question is how do you ensure you use order, payment and service apps to improve customer experiences and revenue without finding you have been asset stripped of your brand reputation and customer?

Attracting new customers

Uber Eats, Just Eat or Deliveroo can bring you new customers, as each of these platforms comes with its own loyal customer base, many of whom, you may not be able to reach without them. This is especially useful for small businesses, start-ups and those off the beaten track. By working with several, you can massively expand your customer base.

A white label order and pay app,  doesn’t generally come with these benefits, but that is not always the case – some white label systems provide a branded, SEO optimised, on-line presence along with local marketing support to help your business feature up the top of the listings for local search.

Customer experience

With these platforms, you invariably lose some control over the customer experience. You have no control over delivery staff training, the speed or the way your food will arrive with your customer. 8 out of 10 customers blame the restaurant, not the delivery service if anything goes wrong.

By direct service you have total control over how (and how quickly) your food and drinks arrives and is presented to their table – in your venue or their home.

There are additional impacts on your customers – nothing can annoy takeaway customers and those waiting for a table than a delivery driver skipping the queue or walking to their dedicated  servery ahead of them. It just doesn’t feel fair!

43% of restaurant professionals said they believe third-party apps—many of which withhold useful information –  hamper the direct relationship between a restaurant/bar/pub and its customers.

Retaining existing customers

The more ways customers can choose between how they can order and enjoy your food and drink, the more loyal they will become.

Research[1] shows that customers who place an online order with a restaurant will visit that restaurant 67% more frequently than those who don’t.

Whether you use an own brand or an ordering platform, providing greater availability and personalisation will improve customer loyalty and hopefully profits.

Unfortunately, just as platforms bring you customers, they can also encourage your customers to try out your competitors. The big three food apps have become extremely adept at building loyalty to their platform rather than you.

With many white label apps, you can add tools to start engaging with customers both when they are with you, as they pass your door or when you haven’t seen them for a while. You can also reward customers for recommending you, providing reviews, for trying something new or just to say thanks for their loyalty.

Profitability

These platforms can provide experience, resources and expertise that you don’t have, saving your business investment and costly mistakes. Online ordering and delivery apps can help you avoid investments on software, drivers, packaging, tracking, on-line payment and much more. 

Against this, they can charge some large commission (some as high as 40%) as well as charging extra to your customers. In the USA 78% of deliveries and collections are direct – that is a lot of delivery revenue and commission to off-set the costs of employing a driver.

 Takeaway and delivery can create a valuable extra revenue stream if it is in addition to your current business. If it is as a replacement then you will be operating on a reduced margin through lower opportunity of selling extras and drinks alongside the platform commissions. 

There is increasing evidence that third party platforms can cannibalise a high proportion of your: eat in and direct takeaway business. 

White label platforms can also provide best of breed technology and payment systems without incurring set-up costs and increase sales per customer by average of 30%. Why not consider joining with other like-minded businesses to create your own local delivery network? 

Summary

It’s tough out there so the promise of regular, high value, incremental business is going to be tempting. Before you sign, consider the alternatives. There is great technology and alternative delivery systems (assuming you even offer delivery) out there that can potentially help you grow your customer loyalty and profits.

Incorrect use of the big three platforms can seriously damage your wealth

[1] https://www.pmq.com/the-2016-pizza-power-report-a-state-of-the-industry-analysis