Like it or not, food delivery services like Grubhub and UberEats are here to stay. The rising consumer demand for off-premises dining has forced even higher-end restaurants to dip their toes into delivery. These third-party delivery services are no longer ‘new entrants’ into our world, but have instead become a mainstream part of the restaurant business. Different restaurants can be seen grappling with these services in different ways. Some places negotiate their way into exclusive deals, while others forgo third-party deliveries entirely in favor of building their own in-house delivery system. While there’s no ‘right’ way to handle the idea of delivery, there is definitely some need-to-know info to make it profitable. And today, that’s what we’re bringing you -- everything you need to know to leverage food delivery and turn it into profit.
Before we get into that, some of you may be wondering ‘why bother?’ How much untapped business could there really be in these delivery food services? Well, according to one study, 20% of US customers order delivery at least once a week. And from now until 2023, that number is only expected to increase. In fact, that number is expected to grow at over three times the rate of on-premises sales. Basically -- the train is leaving the station, folks.
Picking a Service
If you’re thinking about going into the delivery game, one of the first decisions to make is what service to use. There are over a dozen different options now, including Grubhub, UberEats, Postmates, Doordash, and a whole lot more. So, how do you pick? Well, a good place to start is with the fees. Yep -- this may come as a surprise, but delivery services are not free to the restaurant. Oof. Many services do offer an introductory ‘freemium’ stage, where all fees are waived temporarily. But after that, you could be looking at a 30% per-order or more fee on each delivery transaction. We suggest looking at the services which are available to you locally. Then, do some investigating on their respective fee structures. Despite the fees associated with these delivery services, they still provide restaurants a fantastic way to expand profits and grow brand awareness.
Plan, Plan, Plan Some More
Our second suggestion for optimizing your delivery options is to carefully consider your plan of action. Your delivery program should be well-planned and well-executed -- not just an afterthought. It’s very possible that diners will either be first introduced to your restaurant through delivery. With this in mind, it’s critical to put your best foot forward via your delivery program. We suggest a ground-up integration of your delivery options, starting with your POS system. If you want to offer delivery, you’ll need a POS system and restaurant infrastructure that can handle delivery options, online ordering, customer information, and operation control.
Food packaging is an often-overlooked aspect of leveraging food delivery to drive profits. It’s easy to opt for the same brown folding to-go boxes that everyone uses (you know the ones), but we suggest giving it a little more thought. Proper delivery packaging is going to greatly enrich the overall customer experience and cement your brand identity. When you’re leaving so much up to the delivery service, it’s critical to do everything in your power to create a great customer experience. We suggest investing in packaging that is sturdy, insulated, and ventilated (#NoMoreSoggyFries). For bonus points, consider getting this packaging monogrammed with your restaurant’s name.
Outside of your most popular food items, food delivery services can offer other ways to widen your revenue stream. If your restaurant or bar has t-shirts or other merchandise available to dine-in customers, why not make those available via delivery as well? In addition to this idea, many food delivery services don’t allow the delivery of alcoholic drinks. But, to enrich the customer’s experience, restaurants often mix their cocktails without the alcohol, and sell those for a DIY cocktail kit. These types of creative workaround and revenue-building really enrich the customer experience, while allowing you to ‘hack’ the delivery services to maximize profit. What’s not to love?
What About In-House?
One question that comes up during the food delivery conversation is “Why even use a third-party? Why not just handle delivery in-house?” That’s a perfectly fair question, and in-house delivery is something that many fast-casual restaurants are beginning to offer. Even with third-party delivery services becoming ingrained into the Food and Beverage business, some restaurant operators have grown frustrated with the high fees charged by the services, and have begun looking at developing in-house delivery systems. There are pros and cons to this approach.
While saving on delivery fees is a huge pro, considerable investment needs to be made to save that money. Restaurant operators will need to bring in company cars and delivery drivers -- not to mention all of the logistical pieces that need to be put in place. Tacking on delivery to an already-existing restaurant program can be a daunting feat, to say the very least.
On the other hand, in-house delivery allows you to have full control of the customer’s experience. And, in time, the money saved by not paying third-party fees could finance infrastructure and staffing needs required to execute an in-house delivery service.
As with most things in the food and beverage world, there’s no ‘right’ answer -- each establishment is going to have different needs and different solutions.
At the end of the day, delivery services are a big part of the business now. They aren’t always as adored by the restaurant operators as they are by consumers, but if you can harness and capitalize on the opportunity properly, profits certainly await. Be sure to carefully plan and consider before dipping your toes into the waters of delivery services.
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