The changing landscape of online food delivery
The change from traditional television and dining out to streaming films and home delivery of food shows how drastically consumer behavior is changing. On-demand food delivery offering instant gratification to the new-age consumer hunger pangs has transformed the way the food industry operates. Smart technology and virtual food ordering assistants have made on-demand food deliveries easier and efficient.
More and more restaurants have tied up with third-party aggregators to offer timely food deliveries and gain market share in this competitive market. There is simply no need to step out of their homes for consumers, and they can continue to enjoy their weekends in the comfort of their homes. No wonder the average consumer spend on ordering food online has grown exponentially.
But how can restaurants mitigate the challenges associated with third-party food delivery aggregators? Restaurants need to balance the volatility in the delivery experience and ensure that customers remain loyal to their brand.
Are you asking these important food delivery app questions?
Some important questions that restaurants need to keep asking to check on third party aggregators are:
- How is the third-party food delivery app performing?
- Is using a third-party food delivery app causing business cannibalization?
- What kind of risks and opportunities does it unfold?
- What new strategy can be used to tackle food delivery woes?
Did you know?
Let us also go through some startling facts associated with third-party food delivery:
- Accuracy is the biggest problem with third-party food delivery.
- Consumers are likely to choose a third-party app that delivers from their favorite restaurant.
- Consumers use more than one third party food delivery app to order.
- Third-party delivery continues to disrupt the restaurant industry inching towards steady growth.
- Consumers are increasingly using third-party apps that are faster and convenient.
- The frequency of third party orders is consistently on the rise, triggered by millennials.
These trends and demand insights offer an excellent room for restaurants to tighten up their delivery offering. It makes absolute sense for restaurants to invest in creating their own delivery app to avoid business cannibalization from third-party delivery vendors.
Almost every consumer in any part of the world is using or has used a third-party app to order food. New providers continue to enter this space. To ensure that their brand loyalty remains unaffected, restaurants must think of propagating their own delivery platform in addition to tying up with third-party aggregators, which gives them better control over their brand offering and business.
7 reasons why restaurants need their own food delivery service, in addition to third party delivery:
1) Brand loyalty
What if your brand is not listed with a popular third-party delivery vendor? Chances are your customer loyalty will take a hit. However, if you have your own delivery channel in place, which is strong and reliable, your loyal customers will get to stick with you.
2) Signature menu
Many times, what a brand can offer on a third party delivery channel is a limited menu. Having your own delivery platform ensures that you can provide a variety of options to your customers within your normal menu. This expands the flexibility to entice customers with new dishes and delivery specials.
3) Heavy commissions
Every food delivery orchestrated by the third-party vendor comes at a cost. Reportedly, third party delivery costs almost 30% of every delivery order, which is not all cheaper as volumes scale. To really survive in the marketplace, having your own food delivery channel allows you to be in control of the pricing and cost.
4) Convenience and comfort
As a food brand, you need to make food delivery a hassle-free experience for your customers. More and more customers are switching to home deliveries than dining out. This relates the importance of having online food delivery as an option in your restaurant. So even if your third party vendor has closed for delivery, your customers still have the option to reach out to you directly and get their choice of food delivered. Integrate your platform with smart technology making it easier for your customers to place orders even from their smartphones.
5) Delivery efficiency
Accuracy of food delivery is a growing concern with third-party delivery vendors. Either the food is not collected on time, either the driver is rude, the food is not fresh, or absence of multiple payment options, etc. Ensuring an accurate and safe delivery is becoming a challenge. Restaurants have a great chance to follow best practices and offer a better delivery experience than their third-party counterparts, who are servicing multiple customers from multiple restaurants at a given time.
6) Delivery experience
We just discussed the many challenges associated with third-party delivery. This can have a significant impact on your brand experience. Because even if you have packed the food well, if the delivery person has not followed the right protocol, the final delivery experience takes a big hit. Having your own delivery personnel gives you a chance to train them well and create a foolproof delivery schedule to maximize the delivery experience.
7) Seamless communication
Food delivery is a delicate space to operate in. People expect the ordered food to come in fast and fresh. But many times, the delivery agent is unable to reach on time due to various issues. This is the time when communication with the customer needs to be spot on. Many third-party apps fail to provide this critical customer engagement or simply don’t train their agents well on this note. But this is an important step in the food delivery chain and restaurants must ensure their own delivery channel puts great importance on this feature. A dissatisfied customer is sure never to return, resulting in loss of business.
What’s best for your food brand?
Reports estimate that by 2023, revenue per customer will climb about $12 who have their own delivery service, compared to an $8 per customer increase for those who depend on outsourced delivery platforms. With third party delivery channels cutting into the margins, restaurants need to rethink their food delivery strategy. This involves conducting in-depth research to understand how customers are actually perceiving the brand and rating it on third party channels.
The gaps can provide a great opportunity for restaurants and virtual cloud kitchens to step in and create their own delivery platforms. That would allow them to offer more crafted menus as well as a better service experience. Even something as simple as changing the packaging could elevate the freshness of your food.
There is really no silver bullet to getting it right in the food delivery space. The best strategy is to have a delivery platform that puts customers at the core. With third-party delivery, this aspect is often marginalized. For restaurants, having your own branded food delivery app puts you in better control to offer a diversified menu, better pricing, and an overall enhanced food delivery experience.
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